HELP! BY ANAT LEVY, ESQ. Your client says he wants to make a movie and asks for your help. All you can think My Client is: “Help!” In this article, I’ve boiled my 28 years of experience down to 1,500 Wants To words to get you started. First, ask “why?” Hollywood’s creative accounting aside, only about 20 percent of films actually turn a profit. As one industry adage goes: “How do you Make A net $5 million on a movie? Start with $10 million.” Multi-billion dollar companies are in the movie business because it’s ultimately a numbers game. They make enough successful films to cover their Movie! losses on the majority of losers and, ultimately, turn a profit. Having said that, if your client says he wants to make a film in order to feed his creative energy or to fulfill a lifelong dream, well that’s as good a reason as any.
8 Nevada Lawyer May 2015 Keep in mind that, as with most that kind of approval can easily kill protection in the event the treatment is other business ventures, clients should the project for a studio, writers or later misappropriated. ultimately work though a corporate directors, and severely hamper your Once the treatment is finished, a shield for protection from personal client’s ability to make the film he full script can be commissioned, or the liability. The form and timing of wants to make. project can be presented to financiers establishing this shield (typically Life-rights agreements should based on the treatment alone. On the an LLC) depends on your client’s be structured as an exclusive option, up side, having a full script helps particular circumstances. So make meaning that your client would pay financiers and talent better evaluate sure that all of the contracts into which a small fee for the exclusive “right the project and is a huge asset when he enters for the film are expressly to purchase the rights,” within a creating a budget. On the down side, it stated to be freely assignable by your year or 18 months, with an option costs more to have a scriptwriter pen client. Contracts entered into before to renew that right for another year the script — unless the writer agrees his company is formed will need to or 18 months. The contract would to defer compensation (check WGA be assigned to his company; contracts provide that your client can develop rules for your client’s type of project); entered into by his company will and shop the film for financing during it will also make your writer harder to ultimately need to be assigned to the the option period, so that he does not replace if a financier likes the project film’s financiers and distributors. have to pay the full purchase price, but prefers to work with a different Next, ask what the movie will which should also be pre-negotiated scriptwriter. This happened to one of be about, as this will determine what in the contract, before figuring out if my clients who had hired a scriptwriter rights, if any, to which your client he can even get the film financed. A for a television pilot, only to learn that is entitled. For example, I had a client once came to me after spending the studio liked the project but wanted client who wanted to make a film $100,000 to buy the film rights to to replace the writer. based on a real-life murder. While he a popular video could have based the film solely on game, only to learn publicly available information, such as that she couldn’t newspaper articles and trial transcripts, get a financier it was hugely more advantageous for interested in her him to also get exclusive life-story project before the rights from key people involved in the rights contractually murder (e.g., the murderer’s wife and reverted to the the victim’s family). Getting exclusive rights holder. Had life-story rights allows the filmmaker she instead simply to include non-publicly available purchased an option information in the film, giving it more for this period, she marketing “sizzle.” This makes it more would have saved attractive to financiers and distributors considerable sums. who want to maximize the draw for Next, your client potential viewers. should get the story Further, the rights agreement can written in some form. He should write, Next, a budget should be protect your client from claims of or hire a professional writer to write, developed to estimate how much defamation, invasion of privacy and a film treatment, which is a five- to money the client needs to raise for right of publicity claims, as well as 15-page summary of the storyline, key the project. While budgeting software expressly giving your client the right events and point of view of the film. If is available, your client should hire to fictionalize the story as needed. The your client or the writer is a Writer’s a professional, as the task can get contract can also require the releasor to Guild of America (WGA) member, complicated. Script breakdowns need help your client get information from then with few exceptions, the terms to be made; guild minimums accounted other sources, such as other family of the WGA’s collective bargaining for; shooting days estimated; costs of members, thereby increasing the scope agreement will apply. Regardless, stage rentals, music, pre- and post- of your client’s exclusive information. however, the final treatment should production costs estimated; and a The contract should not, however, be registered on the WGA website myriad of other elements must to be give any life-rights grantor the right and, ideally, be registered with the considered. to approve the script, the film, its U.S. Copyright Office as well, so that marketing or its distribution. Granting your client will have some level of continued on page 10
May 2015 Nevada Lawyer 9 continued from page 9
writer, actor or story rights to a bestselling novel, comic book or game.
Territorial pre-sales The producer typically hires a sales HELP! agent to pre-sell the rights to the film on a territory-by-territory (or group of territories) basis, and then My Client uses those distribution contracts to secure a bank loan sufficient to Wants To fund the film. Investor Make A financing The film is financed by one or more persons Movie! who buy shares of the company through Now comes “the chicken and which the film will the egg” conundrum of filmmaking: be produced and/or getting the film financed. It is hard to distributed. Beware get a film financed without at least one of state and federal key talent (a high-level actor, director securities laws or producer for example) verifiably that may kick in, committed to the project. Conversely, depending on the form it’s difficult to get key talent committed of the new entity and/ to, or even made aware of, the project or the number of without showing proof of funds to the investors involved. talent’s agent or manager. Agents and managers work on contingency, so they Crowdfunding try not to waste time on Hollywood This is the latest craze in small- wannabes, offering their clients great film financing. I had a client raise roles that don’t ultimately materialize. $50,000 using Kickstarter to fund effect, allocating $80 million in credits A potential client recently called me, the distribution of her documentary. to be issued to qualifying productions ecstatic, believing that her film was Spike Lee recently raised $1.4 million over a four-year period. This past getting made because a CAA agent, on Kickstarter to fund a $1.2 million September, the Legislature mostly “liked the script and will give it to [his film. Other sites include Indiegogo gutted that program by transferring A-list client], once I give him proof of and Gofundme. Obviously, review $70 million of that credit to Tesla. funds… what does that mean?” Bottom individual website rules carefully to The program still exists, however, line, any direct access that your client ensure compliance. and to the extent that funds are has to talent will facilitate getting talent available, productions can get a 15 to attachment and financing. Self-funding 19 percent tax credit in Nevada. Other states offering tax incentives include Here are the most common ways to Unless your client has significant California (20 percent to 30 percent), fund a film before production: disposable income that he doesn’t mind New York (30 percent to 40 percent), losing, avoid this at all cost. Louisiana (30 percent to 35 percent), Studio financing Your client should also try to Georgia (20 percent to 30 percent) and A studio agrees to pay for capitalize on film tax credits. Numerous New Mexico (25 percent to 35 percent). the costs of the film in exchange for states offer tax credits for productions After these first steps are taken, the right to distribute the film in all made, at least in part, in their state. your client can start thinking about the or some territories, and to all or some The earned tax credit can then be sold actual production, post-production and media outlets (e.g., theaters, television, to a third party, typically at a discount, distribution of the film, all subjects for Internet). It is difficult to get this to raise cash for the production future articles. type of backing without some proven or marketing of the film. In 2014, money-making element attached to the Nevada’s new film tax credit law took film, for example, a proven director,
10 Nevada Lawyer May 2015 Weide & Miller is pleased to announce F. Christopher Austin is a shareholder of the firm
ANAT LEVY is a 28-year entertainment lawyer and chair of the Entertainment Law Section of the Nevada bar. She is licensed in California and Nevada, and specializes in production, licensing and distribution of films, television programs, documentaries and other works. Levy started her own firm in 2000, representing studios, distributors, post-production F. Christopher Austin houses, producers and talent. She Mr. Austin has 20 years of litigation and trial experience. also worked at Paramount Pictures He is known for his expertise in intellectual property and MGM, and is an arbitrator with litigation, including securing emergency injunctions against the Independent Film & Television Alliance. Levy is a 1986 UCLA Law infringing products and litigating trademark, copyright, School graduate, having earned patent and trade secret matters. her bachelor’s degree from UC Berkeley in 1983. Weide & Miller, Ltd. Intellectual Property Protection & Litigation
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