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What Does a TV Development Contract with a Network Encompass?
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.
- f 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.
What Are Some Salient Contracts Provisions for Televising Live Events?
Wednesday, October 26, 2011 by Doron F. Eghbali
To live broadcast an event, producers or broadcasters must obtain permission from sponsors. The sponsors could be the ones owning or performing the event in one form or another. The event could be a play, ballet, concert or any other special event to be broadcast live. Producers could be the stadium or venue housing the event, a for-profit entity, a non-profit entity or any other entity or individual(s). It is incumbent upon participants and parties to ascertain the salient provisions of such contracts.
EDITION OF LIVE PERFORMANCE
The Producer and Sponsor, unsurprisingly, have conflicting interests in the editing process of a live performance. Producer often demands unrestricted dominion over editing. Producer longs to have the contractual flexibility to rearrange, change or supplement the live performance, as need arises. On the other hand, Sponsor longs to ensure the live performance broadcast authentically reflects the program. In fact, the Sponsor may want to, to the extent possible and practicable, limit the amount of outside material inserted into the live performance.
In addition, Producer may want to include the live performance into other programs and want to do that without providing due credit to Sponsor. Sponsor Counsel should negotiate such points and others.
COMPENSATION OF LIVE PERFORMANCE
Generally, there is no precise figure for Sponsor’s compensation of a live performance. There are several factors to contemplate including but not limited to:
- The Popularity of the Event
- The Popularity of the Performers at the Event
- The Size of the Event
- The Media Exploited at the Event
- The Assistance or Equipment Provided by Sponsors, or Lack Thereof
- The Costs to Producers in Organizing and Launching the Event
A. SOME SALIENT POINTS ON LIVE PERFORMANCE COMPENSATION
A question of which talent is paid or what talent is paid and who pays the cast and crew should certainly be negotiated. For instance, some of the salient points to be negotiated involve:
- Whether all talent involved in the program should be paid
- Whether all talent just videotaped should be paid
- Whether ONLY the talent used and videotaped in the live performance to be paid
In addition, parties are advised to negotiate and agree on who is responsible to pay to make up artists, designers, lighting crew, stagehands, electricians and personnel, among others.
PAY OR PLAY OF LIVE PERFORMANCE
The salience of this provision cannot be overemphasized. Producer cannot guaranty a live performance to be broadcast live while Sponsor wants to ensure Producer pays under the contract regardless of whether the broadcast is live or not. Accordingly, pay or play, arguably, protects both producer and sponsor.
OWNERSHIP OF LIVE PERFORMANCE
Ownership and control could sometimes be intractable issues. Even though it is possible for Sponsor to control the event, to some extent, it is the Producer who asserts control over ownership of the television program. It is uncommon for television coverage to be co-owned, but rarely the television coverage could be jointly owned and copyrighted.
Often, anything beyond the television coverage should be separately negotiated for ownership and copyrights, among others. Further, the performers might be entitled to more payments if any collective bargaining agreements require payments in addition to the live performance payments already paid for other exploitation of the live performance.
This article neither supplants nor supplements the breadth and depth of such esoteric subject matter. In fact, this article ONLY provides a rudimentary synopsis of such expansive esoteric subject matter.
Contact our Los Angeles TV Agreements Lawyers
What Does TV Production Encompass?
Friday, April 8, 2011 by Doron F. Eghbali
Film and TV production are rather largely dissimilar. Let us explore such esoteric variations in some detail.
SOME BACKGROUND ON TV PRODUCTION
Film production, arguably and relatively, embraces a larger number of independent producers compared with Network Television, often dominated with large studios and a limited number of large independent producers. Even, those few independent producers supplying programming to Network Television have production-financing deals with larger studios or larger independents. In fact, unfortunately, industry demands such symbiosis because of the costs involved in producing original/new programming. Such costs surpass first-run license fees and such producers MUST accomplish long runs spanning at least 22-episode seasons to provide enough programming to run in a 5-episode week and become profitable through foreign sales and reruns.
SOME ESOTERIC MECHANISMS IN TV PRODUCTIONS
Deficit financing is probably the most salient aspect of Network TV production since it determines if someone can or cannot produce. To understand deficit financing, it is useful to understand how prime-time series are financed and created.
The Federal Communications Commission (the “FCC”) has severely restricted the ability of TV Networks in the Network’s control of and financial interest in Network Programming, to foster a relatively more competitive environment. This FCC restriction has culminated in the fact that most prime-time series are not owned by TV Networks, but licensed from rather large independent producers.
Now, the way TV Networks pay for prime-time series to such independent producers is fascinating and daunting:
- TV Networks, to make their programs more attractive, require independent producers to budget each hour of a new series more than $1.1 to 1.3 million.
- TV Networks pay a starting license fee of around $800,000 to $900,000.
TV Networks payment arrangement, thus, creates anywhere between $300,000 to $500,000 or more budget deficit per episode for TV producers.
HOW COULD INDEPENDENT PRODUCERS RECOUP THE BUDGET DIFFERENCE, IF ANY?
Now, the question arises how could relatively large independent producers recoup their money if it costs them to produce each episode around $1.3 million and receive only $900,000? The answer is as elusive as the money since most producers could recoup by having a repository of at least 50 to 70 episodes (22 episodes per season for three to four years of syndication). Nonetheless such recoupment strategy is fraught with perils since:
- Possibly, TV Networks do not renew prime-time series beyond pilot let alone the second season.
- Possibly, even if successful on TV Networks, the series are not necessarily successful upon syndication.
- Possibly, even if successful on TV Network and syndication, it takes at least several years after the series were created for it to become profitable.
Hence, given this rather daunting TV Production economics already delineated, the following caveats are worth considering:
- It is incumbent on TV producers to be large, well heeled and diversified. Such TV producers must be able to front the whole money required for production in the hopes of recouping the deficit with some reasonable yields in foreseeable future.
- It is incumbent on TV producers to have a balanced portfolio of programming. In other words, such portfolio diversification should encompass one or more prime-time series. It is ideal, not always feasible or foreseeable, to have a mix of programs some in syndication yielding profits, others in renewals on Network TV, and some in development and pilot stages.
- It is incumbent on TV producers to take note of two evolving trends. First, the ever increasing number of new programming channels COMBINED with new media to broadcast and monetize TV programming, is revolutionizing TV production market and economics. Second, Reality TV (unscripted TV) often involves different economics as there are no reruns, but other evolving opportunities for its monetization.
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