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Business Considerations for DV Moviemaking

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This chapter is from the book

Show business is 10 percent show and 90 percent business.

There's plenty of room for creativity in business. Identifying opportunities requires some imagination, as does coming up with solutions for problems. And most of all, it takes a creative mind to put yourself in the other person's shoes.

Imagine you're an investor and a moviemaker approaches you for some cash. The moviemaker has no business card, no business plan, no script, and isn't even wearing a clean shirt. How can you take this person seriously?

As a producer, you're not just representing your project. You're representing yourself, your skills, your company, your future, and everyone working for you. You need to be professional. Professional doesn't just mean wearing a business suit and carrying a briefcase—although in some instances, that's exactly what you need to do. Professional is an attitude: You care about your potential partner's needs. You don't want to waste his or her time, so you've done your research, developed a business plan, consulted an attorney—in short, you've taken care of business.

Coming in prepared makes an excellent impression, one that says this investor, distributor, writer, or name actor can expect a fair, and potentially lucrative, business relationship with you.

There are a lot of business details that need to be taken care of in the development stage, such as forming a production company, drafting contracts, contacting possible buyers, and so on. It can be frustrating because you really just want to make a movie. But don't skip any of these details. You'll be happy you've taken care of them all in the midst of production.

You Have the Right to an Attorney

I've worked with the same entertainment attorney, Neil Sussman, since 1996. In addition to knowing his business and the entertainment industry, Neil's smart, ethical, and has a cache of very bad lawyer jokes. Every time I hang up the phone after speaking with him, not only do I understand the issues and options of a specific contract or agreement, I'm reminded to think ahead and be clear about what I want. I also have another horrible joke to tell at cocktail parties.

You need an entertainment attorney. Do not ask your Uncle George the litigator or your neighbor Louise who works in tax law. Get somebody who knows his or her way around the entertainment minefield.

An entertainment lawyer can play a key role in helping you attach private investors to your project. They often have contacts with groups of investors who want to invest in motion pictures for tax-related purposes.

Entertainment lawyers are also crucial in equipping you with the contracts, agreements, and releases you're going to need for your project. Get them now while in development to give yourself time to read and understand every clause and provision. It's incumbent upon the producer to have and understand the correct contracts.

Your lawyer will also help you negotiate options on literary properties, as well as offers you get from distributors or other buyers.

To find a good attorney in your area, ask other moviemakers. You can't underestimate the power of a recommendation. Many bar associations have lawyer referral services to help you find an attorney and you can always ask lawyers you know. Check the listings from your local city or state film commission.

I also recommend Mark Litwak's Dealmaking in the Film and Television Industry: From Negotiating to Final Contracts as a guide to the various legal instruments you're sure to run across. Litwak also has an excellent Web site at http://www.marklitwak.com. For more listings, see Resources. When you meet with an attorney, ask

  • How long have you been in practice?

  • When did you begin focusing on entertainment law?

  • Have you handled motion picture contracts before?

  • What professional organizations do you belong to?

  • What markets, festivals, and other industry events do you attend?

Check the local bar association and Better Business Bureau to see whether the attorney has had any complaints. To be doubly careful, check the county courthouse for any legal action taken against the lawyer or law firm. What you're looking for are the number of lawsuits and their outcomes, and what the attorney is alleged to have done.

The lawyer will undoubtedly ask you some questions about what your goals are and what your expectations are regarding hiring an attorney. Many have a one-page agreement explaining your obligations as a client that you may have to sign and another page describing what the attorney will try to do for you. You may have to give the attorney a retainer. Don't sign anything or hand over any money until you're sure this is the person you want to work with.

Personal chemistry and common ethical outlook play a part in this relationship. Pay attention to your gut—if you don't feel this is someone whose counsel you can trust, keep looking.

In the meantime, review the sample agreements in this book. Modify the forms as needed, and then take them to your lawyer to be vetted. Depending on your project and production company business structure, you may need other contracts, agreements, releases, and letters in addition to these:

Development

  • Partnership agreement—A written statement defining any partnership you form with anyone else for your project or company.

  • Option and option execution agreements—Agreements to remove a literary property from the market while you develop your project. After development is complete, you execute an option to fully and legally license the audiovisual rights of the property.

  • Shopping agreement—Similar to an option, but more informal, this agreement allows a producer to shop a literary property for a short period of time without defining compensation or any other terms.

  • Screenplay submission agreement—An agreement signed by someone who sends you an unsolicited screenplay or treatment that he or she won't file a claim should you produce a similar movie without the writer's participation.

  • Life story release—More extensive than the personal release, this release generally applies to people who are the subject of a nonfiction motion picture. Get this signed immediately.

  • Product placement agreement—This agreement grants you permission, and sometimes money, to use a product in your show. If you want a product placement agreement, get your script in shape and reviewed. Approach the manufacturers early. They'll want to review your script before agreeing to anything.

  • Trademark release—Go through your script one more time to see whether there are any props or items in set dressing for which you'll need a trademark release. Contact the trademark owner for a release. The owner may want to review the script ahead of time, so do this early.

  • Screenwriting agreement—A contract to hire a writer to write a screenplay.

  • Nondisclosure agreement—An agreement that goes to potential investors, subcontractors, and others, where they promise not to discuss the project with anyone except their advisers. Some writers will insist on a nondisclosure agreement before pitching to you. If so, walk the writer out to his or her car and wish him or her a pleasant drive home. Demanding this level of nondisclosure is a sign of the writer's inexperience and that may cause you problems later.

  • Attachment letter or letter of intent—An informal one-page note that states an actor, director, executive producer, or anyone else will consider working on your project with you. It binds the person to nothing, but it's proof to potential investors that you've at least been talking with these people.

Preproduction

  • Talent and crew contracts—After you've hired people, get their names on a contract defining compensation and other terms.

  • Personal release—If someone walks into a shot and is identifiable, you'll have that person sign this release allowing you to use his or her image, voice, and so on.

  • Location release—Permission to use private property or an exterior of a public building.

Postproduction

  • Master Recording License agreement—An agreement granting you access and permission to use a specific audio performance.

  • Sync Rights agreement—An agreement granting you the right to synchronize music to picture.

  • Soundtrack Licensing agreement—An agreement granting you the right to use a recording as part of a soundtrack album or collection.

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