Entertainment31 ST ANNUAL THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION Law Issue MAY 2015 / $4 EARN MCLE CREDIT PLUS Marriage of Indie Film Valli Financing page 25 page 32 New Media Publicity Rights page 10 California Tax Residency page 14 Lessons of Aereo Perk page 40 Points Los Angeles lawyer Jill L. Smith reviews the noncompensatory provisions in the entertainment contracts of actors page 18 When obstacles stand in your way, we help you overcome them. Divorce • Support • Premarital Agreements EXCLUSIVELY FAMILY LAW. walzermelcher.com May 2015 Issue Master.qxp 4/14/15 2:47 PM Page 3 Entertainment Law Issue FEATURES 18 Perk Points BY JILL L. SMITH While agreements between studios and actors are often similar, each deal is individually negotiated and must be carefully analyzed 25 Transmutation of Law BY WILLIAM S. RYDEN Family Code Section 852’s requirement of an express, unequivocal declaration of transmutation bars enforcement of a technically insufficient writing Plus: Earn MCLE credit. MCLE Test No. 246 appears on page 27. 32 Security and Independence BY JOHN W. CONES Attorneys advising independent filmmakers need to carefully analyze financing deals in order to avoid violations of securities rules Los Angeles Lawyer DEPARTMENTS the magazine of the Los Angeles County 8 On Direct 38 By the Book Bert Fields Clearance & Copyright Bar Association INTERVIEW BY DEBORAH KELLY REVIEWED BY PAUL S. MARKS May 2015 Volume 38, No. 3 9 Barristers Tips 40 Closing Argument Guidelines in bankruptcy procedure for Aereo shows what attorneys can do to COVER PHOTOGRAPH: nonbankruptcy litigators advise technology entrepreneurs TOM KELLER BY CHRISTOPHER O. RIVAS BY OWEN J. SLOANE 10 Practice Tips 39 CLE Preview Right of publicity issues in emerging media BY MATTHEW SAVARE AND JOHN WINTERMUTE LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly, 14 Tax Tips except for a combined issue in July/August, by the Los Angeles County Bar Association, 1055 West 7th Street, Suite 2700, Tax residency issues for filmmakers, Los Angeles, CA 90017 (213) 896-6503. Periodicals postage paid at Los Angeles, CA and additional mailing offices. Annual sub- actors, and musicians in California scription price of $14 included in the Association membership BY BRADFORD S. COHEN, WALTER R. CALVERT, AND dues. Nonmember subscriptions: $28 annually; single copy price: $4 plus handling. Address changes must be submitted MICHAEL A. BLOOM six weeks in advance of next issue date. POSTMASTER: Address Service Requested. Send address changes to Los Angeles Lawyer, P. O. Box 55020, Los Angeles CA 90055. 05.15 VISIT US ON THE INTERNET AT WWW.LACBA.ORG/LALAWYER E-MAIL CAN BE SENT TO [email protected] EDITORIAL BOARD Chair MARY E. KELLY Articles Coordinator DONNA FORD Assistant Articles Coordinator TED M. HANDEL Secretary JOHN C. KEITH Immediate Past Chair PAUL MARKS JERROLD ABELES (PAST CHAIR) K. LUCY ATWOOD CAROLINE BARBEE EMPLOYMENT LAW REFERRALS ETHEL W. BENNETT SCOTT BOYER Paying Highest Referral Fees (Per State Bar Rules) CHAD C. COOMBS (PAST CHAIR) HON. MICHELLE WILLIAMS COURT GORDON K. ENG Honored to receive regular employment referrals from STUART R. FRAENKEL over 100 of Californiaʼs fi nest attorneys MICHAEL A. GEIBELSON (PAST CHAIR) CHRISTINE D. GILLE SHARON GLANCZ Stephen Danz 877.789.9707 & Associates JEFFREY A. 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LANGSTON BAR ASSOCIATION KOREAN AMERICAN BAR ASSOCIATION OF SOUTHERN CALIFORNIA LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION SAN FERNANDO VALLEY BAR ASSOCIATION SANTA CLARITA VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES Los Angeles Lawyer May 2015 5 May 2015 Issue Master.qxp 4/14/15 3:57 PM Page 6 he job of the entertainment deal lawyer is different from that of many other types of transactional lawyers. T Entertainment projects are often complete businesses in and of themselves, requiring lawyers to negotiate numer- ous intricate deals that are all separate from but dependent on one another and that balance the interests of all the different stakeholders. Financiers, distributors, talent, advertisers, and exhibitors all have different needs and differ- ent financial models that need to be addressed and accounted for in order to pro- duce the project and monetize it successfully. This year’s special entertainment law issue offers a nearly complete course on the study of film and television production. In this special issue, we focus on the nonglamorous issues that entertainment lawyers face every day. For example, we cover film finance, actor deals, and clearing rights. How does the production lawyer structure the financial deals that will provide ade- quate financing to produce the project, minimize the client’s risk, and provide a way for the investors to earn a return on their investment? While the garden of visual con- tent is planted with the seeds of creative spark, those seeds will not germinate with- out sufficient financial backing. John Cones explains the nuts and bolts of financing films through equity investing through traditional means and crowdfunding. He out- lines the legal landscape and instructs readers on what points must be negotiated. Besides requiring money, producing visual content requires actors—whether in live action or giving voice to animated characters. The actor’s agent may have negotiated compensation, but the talent lawyer has numerous problems to solve that are not always exciting (approvals and indemnity and publicity, oh my!) but can make or break a deal. Jill L. Smith covers the contours of negotiating the nonfinancial terms of an actor employment agreement. Even if a project is well financed and has stellar talent committed, content still reigns. Does the client have a great idea to turn a famous brand into a movie franchise? Does he have an even better idea on how to market the franchise using celebrity endorse- ments? No entertainment property can be made (or marketed) without carefully nav- igating the troubled waters of rights clearance. We have articles that address this impor- tant topic. Matthew Savare and John Wintermute, for example, discuss the complexities of the ever-evolving right to publicity doctrine and provide advice and insights for videogame developers, advertisers, recording artists, and the companies who distribute their works. Our Closing Argument focuses on counseling tech companies—although producers and their lawyers would also be wise to heed Owen J. Sloane’s advice— on the importance of properly licensing content. Finally, we review a book—perhaps “the” book—that addresses the manifold rights issues that filmmakers, videographers, television producers, YouTubers, and anyone else who makes visual content needs to know about rights clearance from initial acquisition to distribution. We are proud to bring readers this special issue and hope it helps improve the qual- ity of their legal analysis, advice to clients, and work product. Entertainment deal makers may not be the focus of the attention on the red carpet, but they certainly are a critical component in ensuring that their clients arrive there.