Experienced Entertainment Lawyers
From Music Licensing to TV Agreements
Arranger Producer Agreements
SOME BACKGROUND ON CADRE OF FILM PRODUCERS
There are, in fact, disparate types of film producers. For instance, line producer, often is referred to as the hands-on manager of the production responsible for preparing budgets, securing location, negotiating leases and even supervising accounting personnel, among other duties.
On the other hand, as previously indicated, some individuals might have been bestowed upon their “Producer” since they serve as the personal manager to one of the film’s stars or even the film’s writer. Such credits are often referred to as “Vanity” credits. In addition, a “Producer” title might be bestowed upon an individual in an entourage of a mighty person involved with the film such as the film’s star or director, to name a few. In such instances, studious often do not demand duties of an actual producer from such producers.
Nonetheless, a “real” Film Producer is tasked with multitude of tasks during pre-production, production and post-production. Film Producer, during developing the film, is expected and even required to supervise screenwriters, suggest potential directors and cast members. During preproduction and principal photography, Film Producer might have to ensure the production is running smoothly and the cast and crew are getting along. During the post-production process, Film Producer helps ensure the dubbing, reshootings, looping and distribution are properly arranged and executed, to some extent.
In addition, it is incumbent upon Film Producer to ensure, especially independent Film Producers, all applicable necessary rights and agreements essential for production and distribution of the film.
SOME CRITICAL GUIDELINES FOR FILM PRODUCER DEALING WITH STUDIO CONTRACTS
Most studio contracts contain language to the effect that Film Producer must produce AND deliver the film in accordance with the approved budget and any changes to the approved budget must be approved in writing by the studio. Consequently, paying close attention to costs and expenses and staying within the approved budget is a critical task a Film Producer is stringently expected to oblige with.
Most studio contracts, also, contain language to the effect that the film must conform with the designated approved shooting script. This requirement is essential to ensure the final product really and substantially conforms with the APPROVED shooting script.
Most studio contracts, also, require the COMPLETED product must have a running time of “not less than 95 minutes and not more than 110 minutes”. It is essential for Film Producer to seek to achieve the studio desired running time, although the studio might be open to negotiation to expand such running time, in some specific instances.
Most studio contracts, again, demand a certain rating for a film depending on the desired audience and anticipated revenue. For instance, for most animated films for children, a rating of “G” might be required. Motion Picture Association of America (“MPAA”) is the final arbiter of rating movies. Nonetheless, Film Producer is contractually obligated, often, to use best efforts to secure the desired rating.
5. END CREDITS
Most studio contracts, also, require the end credits, the credits appearing at the end of the film, not to exceed 3 minutes.
6. DEVELOPMENT FEE
Development Fee is critical to Film Producers. In fact, if Film Producers could secure such fee, Development Fee could be the only money Film Producers receive since many projects are pitched but few are developed and properly distributed. Such development fee could be negotiated when Film Producer is “attached to” the project.
Customarily, the amount of Development Fee could vary anywhere from $10,000 – $60,000. Such fee is an advance against Film Producer’s negotiated producing fee. Development Fee is to compensate Film Producer for services rendered during development periods.
Development Fee is often payable in 2 installments:
- HALF When the Film Producer commences services under the contract; and
- THE OTHER HALF upon the earlier of either upon the project’s abandonment OR upon the studio proceeding to production of the film.
7. PRODUCING FEE
Producing Fee is separate from Development Fee. Development Fee is what Film Producer receives as an advance against Producing Fee. Nonetheless, Producing Fee is often a GUARANTEED FEE.
There is no set of rules for the amount of Producing Fee a Film Producer receives. Studios are free to pay whatever they would like subject to federal minimum wage requirements.
Such Producing Fee is determined or rather influenced by a confluence of disparate yet intertwined factors, among which are:
- Film Producer Previous Projects’ Box Office Success or Lack Thereof;
- Film Producer Current Attachments or Lack Thereof;
- Film Producer’s Critical Acclaim or Lack Thereof;
- Film Producer’s Services Expected to Render Under Current Contract; and
- The Budget of the Film
The Producing Fee (GUARANTEED FEE) LESS Development Fee is paid in accordance to the following schedule:
- 20% payable in weekly installments during the 8 weeks immediately preceding principal photography (i.e. during pre-production)
- 60% payable in equal weekly installments during the principal photography
- 10% payable upon completion of the last cut of the film
- 10% payable upon delivery to the studio of the ANSWER PRINT.
8. CONTINGENT COMPENSATION
Contingent compensation refers to the compensation, if any, granted to Film Producer,NOT co-producers and associate producers typically, from the gross or net receipts from the back end. Of course, studios are under no obligation to pay such contingent fees. Rather esoteric language is used in contractual agreements to ascertain when and if such contingent compensation is earned. For instance, most studio contracts use contingent compensation is a participation of “50 percent of 100 percent of the project net proceeds, reducible by all third-party participations to a floor of 25 percent”. In other words, if the studio grants net proceeds to third party individuals such as writer and director, the proceeds granted to such third parties will be deducted from Film Producer’s net proceeds to the extent the studio has granted 25% of the net profits to such individuals. At that time, no more money will be subtracted from Film Producer’s shares.
Nonetheless, this area like any other areas of entertainment law is fraught with perils as to definition of net or even proceeds. What constitutes net and what constitutes proceeds is often matter of intense deliberate and long negotiations.
This article NEITHER supplants NOR supplements the breadth and depth of such esoteric topic. In fact, this article ONLY provides a rather RUDIMENTARY synopsis of such rarefied subject matter.
Arranger Producer Agreements in Los Angeles, and Beverly Hills, CA
Nuts and Bolts of a Deal Memo Between a Music Artist and Recording Company
Friday, March 2, 2012 by Doron F. Eghbali
Deal Memos might precede an Exclusive Recording Artist Agreement. Deal Memos are primarily intended to eschew protracted, costly and often futile negotiations and instead establish contractual relationships between artist and recording company. Deal Memo might further the interests of both parties. If the recoding studio longs to take advantage of the artist, the Deal Memo would provide a vehicle. If the artist longs to ascertain if and when they will be paid, the Deal Memo might provide for such mechanism. This article seeks to explore, to some extent, SOME of the salient provisions of such Deal Memo.
Generally, the territory of recording agreements is the entire word. Nonetheless, artists with some appreciable stature could negotiate separate territories. In the latter scenario, the world is split into US and Canada, as one world, and the rest of the world. Undoubtedly, the artist should aspire to negotiate for “two worlds” as such split would entitle the artist to negotiate with two disparate recording companies, perhaps, each conversant in that particular territory AND for the artist to receive disparate advances from each recording company. The latter division would also mean the advance from one territory is not subject to royalty recoupment from another territory.
Generally, the term of the recording agreement is comprised of an initial period with multiple option periods. During the initial period, for 1 year or so, the artist is often obligated to deliver at least 1 album satisfactory or acceptable to the recording company. Then, if the recording company determines the first album was acceptable, then the recording company has about 4-6 option periods. Such option periods permit the recording company to prudently assess each album to ascertain whether committing to another option period would be advisable since the recording company by exercising each option period would often be obligated to pay an advance to the artist. Undoubtedly, the artist seeks to limit number of option periods to a minimum. The artist, if successful, by limiting the number of option periods, would be able to renegotiate the contract and hopefully secures more advantageous provisions. In addition, by renegotiating a new contract, the artist would be able to avoid cross-collateralization, i.e. the advances from the prior contract would not be subject to royalty payments of the new deal. Consequently, given the disadvantages from the recording company’s perspective, it is not surprising why a recording company seeks to secure the maximum of number of option periods and vigorously fights limiting it.
3. CONTROL OF CREATIVE RIGHTS
An artist is, often, rightly concerned about who will control the songs to be recorded and performed. Despite the fact most “new” artists would not have “creative control”, the recording company cannot and often won’t go to court to make an artist perform a song the artist has “legitimate” problems with. In fact, the recording company, often, understands litigating over performance of a song an artist reasonably finds offensive or self deprecating, would not only tarnish the recording company’s image, but also might ruin the artist and the recording company’s professional relationship.
4. ADVANCE OF RECORD COSTS
Generally, there are two mechanisms for the recording company to pay for recording costs of artist’s album. The recording company may opt to allocate a fixed budget or allocate an album or recording fund. Nonetheless, such advanced costs are subject to recoupment by the recording company from royalty records payable artist fro record sales.
A) FIXED BUDGET
Recording company often decides to control the costs advanced. To this end, recording company may allocate a designated budget. In such scenario, the recording company pays for such costs on an invoice basis. As importantly, the recording company may hold liable the artist for any costs exceeding the designated fixed budget. Such fixed-budget mechanism is often employed by small or mid-size recording companies with “finite” resources to reasonably limit their risk exposure, to the reasonable prudent extent possible.
B) “RECORDING FUND” OR “ALBUM FUND”
Recording company may opt to create a recording fund or album fund. This fund is an aggregate amount given to artist to spend on recording costs. Such expenditure might still be subject to recording company’s approval. The artist can pocket what is left of the fund. The latter serves as an incentive for the artist to reduce costs. Nonetheless, in such arrangement, the artist does not receive a personal advance, mainly because the money it can pocket.For this reason, the artist should vigorously and prudently negotiate the amount and latitude in such fund. As importantly, there is no guaranty the costs incurred would not exceed the fund created and negotiated by the parties involved.
C) SALIENT NOTES ON AMOUNT OF FUNDS
As with any other entertainment transaction, the amount of such funds depend upon largely on the stature of the artist, the size and prominence of the recording company, the genre of music and the facilities or equipment being used for recording. For instance, some genres by their nature warrant relatively more funds since there are often additional single mixes for the purpose of playing the record in different formats.
Major labels often consider for a new artist, recording costs in the range of $125,00 to $250,000 per album for pop, rock and rhythm and blues genres. Albums containing country music tend to be lower, in the range of $100,00 to $150,000 because the lower cost of living in country music hubs such as Nashville and Austin.
5. ADVANCE TO THE ARTIST
Undoubtedly, a new artist could negotiate a far lower advance for the first album than a relatively more “established” “successful” artist. Such advance could range from thousands of dollars to millions of dollars depending upon the stature of the artist and the confidence exuded by the recording company to monetize the artist’s records.
This article neither supplants nor supplements the breadth or depth of such esoteric topic. In fact, this article ONLY provides a rudimentary synopsis of such esoteric expansive subject matter.
What Does a TV Development Contract with a Network Encompass?
Monday, July 25, 2011 by Doron F. Eghbali
TV Development Contracts refer to TV Networks or other sources of funding election of Independent Producers to DEVELOP a costly or risky TV program for a focus group before committing their resources even to a pilot. Such development by independent producers transcends writing a treatment to computing budgets, selection of cast and locations and even testing the program before a focus group. Let us further explore the Development contract and its intricacies from both the Network and Independent Producer’s perspectives, to some extent.
1. SOME CONTRACTUAL CAVEATS ON SCOPE OF AGREEMENT, AS A WHOLE
It is incumbent on both Independent Producer and Network to jointly, among other things:
- Delineate any schedules to be completed by a particular date
- Delineate any audience to be targeted
- Delineate any marketable issues and its budgetary limitations
- Delineate any approval process over costs
- Delineate any practical mechanism to overcome budget overruns
- Delineate any corporate producer to have a fully valid and enforceable contract with the independent producer the network desires to work. This is important as Networks usually select a particular independent producer based on her applicable expertise and insight in a particular risky and costly project
- Delineate any delivery materials with specificity such as the number of pages of proposals, its content, the testing and its geographic, location, the length of such testing and number of individuals in a focus group, among other things.
2. SOME CONTRACTUAL CAVEATS ON INDEPENDENT PRODUCER’S FUTURE IN THE PROJECT
It is incumbent upon both Network and Independent Producer to intelligently decide, to the extent possible, on the future of Independent Producer, if the Development is successful and the Network decides to proceed with a TV series based on the Development material. There are, in fact, some conflicting interests as Network might desire to reduce costs by utilizing in-house personnel including TV Series producer and the Independent Producer vying for the ultimate bounty namely producing the Series. Here are SOME CAVEATS:
- To protect both Network and Independent Producer’s rights, often, the Development Contract should set out some reasonable intelligent terms for Independent Producer to completely satisfy. Upon complete satisfaction of such terms, then the independent producer has a LIMITED term to produce the TV Series based on the Development materials.
- Alternatively, in situations where the TV Network does not intend to make the Independent Producer the Executive Producer, it might want to add an Buy Out provision which enables the Network to pay a lump sum in exchange for Executive Producer role.
3. SOME CONTRACTUAL CAVEATS ON INDEPENDENT PRODUCER’S PAYMENT AND OWNERSHIP RIGHTS
Generally, there is no set payment amount designated for a particular Development. In fact, the amount of payment depends on myriad of factors including but not limited to the simplicity or complexity of a Development, to industry recognition or attachments to the Development. In most cases, Networks seek to only cover Independent Producer’s reasonable, and sometimes unreasonable, costs and defer payment of any profits if a Series is to be produced and whether such Series is profitable. Undoubtedly, the definition of “profitable’ is vague and elusive.
Here is another Caveat:
- Payment, regardless of its amount, is divided in two or more installments. Often, a simple $10,000 Development fee is paid in two installments while a $100,000 fee for a complex project with disparate scripts and budgets is paid in several installment concomitant with designated thresholds.
4. SOME CONTRACTUAL CAVEATS ON OWNERSHIP OF DEVELOPMENT WORK
Usually, the TV Network funding the Development work is the one owning it, but not all the time. In fact, in the following situations, Independent Producer might end up owning some of the ownership rights:
- If the TV Network pays the Independent Producer relatively a small payment relative to the complexity of the project, the Independent Producer might be in a position to negotiate for a portion of the rights.
- If the TV Network fails to produce the Series based on the Development within a certain period, then the Independent Producer may be able to purchase back the rights from the network.