A “Joint Venture Agreement” is just another way of referring to a partnership agreement usually formed just for one project. This agreement specifies the parties’ rights and obligations pertaining to the project. It is a sort of business relationship “pre-nuptial agreement” in which the parties understand what is expected of them and what happens if a problem should occur between or amongst the parties. (A Joint Venture Agreement can be between two parties or among three or more parties.) If the Joint Venture Agreement addresses key issues comprehensively, the parties often can sign it, place it in a drawer and only look at it when the need arises.

The joint venture often is a preliminary step prior to forming a production entity such as a limited liability company or a corporation once a project’s funding begins to fall into place. Its term can be for a few months or years with six months to two years serving as the norm. If one of the parties wrote or otherwise controls the right in a project’s script, that party’s contribution to the joint venture would include the “optioning” of the script by the venture with the venture having the right to acquire the script’s rights before the end of the venture’s term. If the venture’s term should end and the venture (or a subsequently formed production entity) has not acquired such rights, the option would be deemed to have lapsed and the script’s rights would remain with the party that wrote or otherwise controls the script’s rights without any encumbrances. However, if the venture or one of the parties to the venture spent any development or otherwise related monies concerning the script or the project, the party who owns the rights to the script would be free to work with other persons or entities to produce the project once the venture’s term has ended, subject to that party either repaying or having a third party repay the other joint venture party any of that party’s share of the Venture’s direct, verifiable “out-of-pocket” expenses. The joint venture parties sometimes will permit such expenses to be excused without any right to repayment to a party. This point is a matter of negotiation between or among the parties.

There should be a provision in the Joint Venture Agreement which states what is expected of the parties. A party’s contribution to a venture can include the project’s script (or any underlying rights to a script), funding, development, production, marketing or distribution resources or skills or the promise to use best efforts by each party to secure such financing, to locate such resources or to render such services.

One of the most important provisions in a Joint Venture Agreement is the one that addresses how the parties make decisions regarding the venture. The parties can separate the types of decisions made on behalf of a venture into purely creative and business (i.e., economic) decisions. Although creative and business decisions often overlap, creative decisions can be separated into two categories: those creative decisions which require the additional allocation and expenditure of funds and those creative decisions which do not affect (i.e., increase) a project’s budget.

If none of the parties is to be a project’s director, the selection of a director may require the parties’ unanimous approval (although this decision and other decisions may be subject to the approval of a project’s financier in certain cases). If one of the parties shall be designated as the project’s director or a third party is to be engaged as the director, the parties would attempt initially to reach some sort of consensus; however, there should be some mechanism to address those times when consensus cannot be reached by the parties. The parties have several options regardless of the nature of such decisions. First, the parties can agree that a decision must be unanimous or a decision is not made. This method of decision-making works well concerning such issues as the selection of cast, crew and director, but it can result in a deadlock by the parties if they are unable to agree. Second, the parties could agree to choose a third party approved by the parties whose decision would govern. This option can be avoided if there is an odd number of parties in a joint venture but issues may arise if the parties have difficulty deciding who should be designated as the third party “tie-breaker.” Third, a party or parties can agree to defer to a party whose decision shall govern since that party may have expertise in a certain area or that party has secured financing or distribution for a project and this type of decision-making may be a condition to forming the venture and to producing the project.

Regarding expenditures made on behalf of the venture, the agreement can state that expenditures which are at a certain monetary level or greater require the (usually written) approval of the venture’s parties. This provision can be problematic if one of the parties may be unavailable or inaccessible during the venture’s term or the production of the project. The parties can select a third party as an alternative signatory for the purpose of paying for expenditures of a certain amount or higher or the agreement can provide a grace period in which the unavailable party must get in contact with the venture’s other party or parties or his, her or their right to approve such expenses would be deemed waived. Still, if a party accesses monies to pay for an unauthorized expenditure, the agreement would acknowledge that such party would be personally responsible for repaying such expense. But in this age of e-mail, faxes and overnight delivery, this situation is becoming less and less of an issue.

In the area of compensation, the Joint Venture Agreement may state the specific figures reflecting how much money would be paid to a party for certain services, or the parties may agree to equal compensation, whether such compensation is upfront, deferred or contingent in nature (i.e., “on the backend”). One of the troublesome issues regarding compensation in which the parties have to address in a Joint Venture Agreement is how to address the scenario when one of the parties leaves the project whether voluntarily or otherwise. There should be a pro rating of a departing party’s compensation that is tied to when the party departs the project. If a party departs from the project at an early stage, that party should receive less compensation that if the party would leave at a later stage of the project. This point is a highly contested issue.

The parties address a similar issue concerning the allocation of the parties’ credits regarding the project. A party’s credit should be subject to that party’s substantial or full compliance of the Venture’s terms and the rendering of services as designated in the Joint Venture Agreement. This credit provision should state how the credits should read and appear on all positive copies of the project and in its promotional and advertising materials. The parties also can deal with this issue by stating in the Joint Venture Agreement that a party’s credit shall appear whenever another party’s or parties’ credit(s) shall appear. Once again, this can be a highly negotiated provision.

A joint venture can be terminated for reasons other than the expiration of its term (which usually can be extended by the parties’ unanimous consent) such as by operation of law which may occur when the venture has not complied with certain laws which may result in the venture’s dissolution or when the venture may be compelled to seek bankruptcy protection.

If a joint venture’s parties are from different locations, there should be a provision that acknowledges which country’s or state’s laws should govern disputes by the parties. Other common provisions in a Joint Venture Agreement address such issues as how monies should be allocated by the venture in terms of repaying any loans, repaying any investments made by the parties in the Venture or to third parties, that each party is free to pursue other business opportunities which are unrelated to the venture without having to ask if the other parties wish to participate in such new business opportunities and that a party’s offers assurances that the party has the rights (or, at least, the right to acquire) the rights in a project’s property which may include its underlying rights.

It is a part of human nature to avoid dealing with difficult issues regarding any relationship, whether the relationship is personal or business in nature. Still the Joint Venture Agreement serves as a means of clarifying many misunderstandings at an early stage and decreasing the chances of growing animosity among the parties later in the heat of developing, producing or distributing a project. The parties who wish to work together ultimately should realize that if they can weather the storm of dealing with the issues addressed in a Joint Venture Agreement, they probably have just as good as or a better chance of dealing effectively with the often difficult issues which arise when the parties are in the production and distribution trenches together.

A few years ago, in a David Letterman-inspired moment of whimsy, I compiled a “Top 10” List concerning the screenwriting business. Although it is not intended to be all inclusive in nature, this list does provide a solid starting point for writers to assess the need to consult with an attorney.

Therefore, with no commercial interruptions (but with some explanatory commentary), here is:

THE TOP TEN REASONS FOR WHEN YOU, AS A WRITER, NEED A LAWYER:

10. WHEN YOU FIND THAT BOOK, PLAY OR RECORD THAT WOULD BE A GOOD BASIS FOR A MOVIE AND YOU WANT TO START WRITING THE ADAPTATION–BEFORE YOU EVEN KNOW IF THE RIGHTS ARE AVAILABLE AND HOW MUCH IT WILL COST YOU.

If a writer decides that he or she wants to write a script which is based upon pre-existing source material (as opposed to writing an original script) such as a book or a play, the writer should contact the copyright owner or administrator for such underlying work. In the case of a book, a writer should contact a book’s publisher subsidiary rights department. A representative in that department would be able to provide such information as whether the motion picture and/or television rights are available and whom to contact if such rights are available. A book’s rights are generally controlled by the book’s author or the author’s agent or attorney. In some cases generally involving beginning book authors, the publisher negotiates such rights on behalf of the author and the publisher, and the author share in the monies derived from granting such rights.

A writer contacted me several years ago and wanted me to read his adaptation of one of the James Bond novels which the Ian Fleming estate had commissioned a writer named John Gardner to write. I read the adaptation and told the writer that it was quite good; however, the script would be used a good sample of how the writer could adapt existing materials into a script. In terms of his adaptation, I informed the writer that if he did not contact the Ian Fleming estate or the Albert Brocolli family which has produced the James Bond franchise for the over forty years and secured the appropriate rights (or, at least, secure an option to purchase such rights), he was out of luck and would not develop the script any further into a motion picture.

9. WHEN YOU WANT TO COLLABORATE ON A SCRIPT WITH YOUR SOON TO BE FORMER FRIEND.

A writing partnership is like a marriage and a collaboration agreement is the pre-nuptual agreement. The best time for a writing team to enter into a collaboration agreement is at the start of the relationship when hopes are high and the stakes are low. The longer a writing team waits to address issues concerning their collaboration, the greater the likelihood for misunderstandings and acrimony between the writers. The collaboration agreement would address such issues as who owns a script’s copyright, how are monies allocated and paid to the writers, how decisions are made whether to option or sell the rights to their script and how disagreements are resolved. In the best case scenario, once the writers sign the collaboration agreement, they can put it in a desk drawer and never have to look at it until an issue arises between the writers. The writers then can open the drawer and read the collaboration agreement as a guide and a reference concerning their contractual relationship.

8. WHEN A PRODUCER WANTS TO OPTION YOUR SCRIPT FOR THREE YEARS WITH A “NO MONEY” OPTION.

If a writer has already written a script and has found someone who is interested in further developing the script with a view towards producing a film or television program based on the script, that person who is taking on the producer role will want the motion picture and/or television rights in and to the script. Since most producers have no or very limited funds to develop their projects, those producers will want to option the rights to the script rather than purchasing the rights to the script outright. By optioning the rights to the script, the producer is taking the script “off the market” so that he or she shall have the exclusive right to further develop the script and to seek possible cast and funding for the project. The producer may offer the writer a “no money” option even if the agreement states the option price is one dollar or some nominal amount. In an ideal world or one where the rules of the Writers Guild of America (“WGA”) apply, the option price would be ten percent of the purchase price for the script’s rights for a period of time ranging from six months to a year and a half with the possibility of such term being extended with another payment to the writer.  In the non-studio world, a producer may option a script’s rights for some nominal amount for a year the right to extend such option by paying a nominal amount to the writer.

Producers generally need an initial one year option period with at least a possible renewal term of another year since it takes time for script rewrites and getting responses from possible cast representatives and funding sources. Why would a writer take his or her script out of the marketplace for no money for as long as three years? A writer has to judge whether a producer has the passion or belief in the property to work on it for what may be years to have a project produced and the experience and/or contacts to take the script to those sources that can finance the project.  At best, it is a judgment call for a writer to make and will serve as the basis of any negotiations between a producer and the writer.

7. YOU ARE NOT COVERED BY THE WRITERS GUILD OF AMERICA AND YOUR SCRIPT COULD BE THE BASIS FOR FURTHER FILMS OR A TV SERIES AND THE PRODUCER WANTS TO PAY YOU A FLAT RATE FOR “ALL RIGHTS, THROUGHOUT THE UNIVERSE, IN PERPETUITY AND IN ANY AND ALL MEDIA, WHETHER NOW KNOWN OR CREATED IN THE FUTURE.”

For the purposes of this article, let us assume that a writer is not a WGA member (or a “professional writer” as defined by the WGA) and that the producer is not a signatory to the WGA Basic Agreement. If the writer were a WGA member and the producer a WGA signatory, then such issues as compensation, credit, a writer’s right to rewrites and how a writer shall financially participate in a script’s ancillary rights would be covered by the WGA Basic Agreement. For the non-WGA member writer and the non-WGA signatory producer or a signatory producer negotiating with a non-WGA writer, almost all of the issues concerning the optioning and/or purchasing of a script’s rights are a matter of negotiation. A writer and his or her representative and a producer can use the WGA rules as a basis for their negotiations of such deal points as credit determination and compensation; however, absent the use of such WGA rules, neither party is bound to such rules and whatever a writer can receive in his or her agreement must be discussed and negotiated preferably by the writer’s agent or attorney with the producer.

One example of an issue which the parties should address is what happens if a producer cannot commence principal photography or complete production of a project after a certain period of time such as five or seven years after the producer acquired the script’s rights. If this issue is not addressed by the parties, the writer’s script could be left on the proverbial shelf to gather dust. Instead, the agreement could include a provision in which a writer could reacquire a script’s rights if the producer does not produce a project within a certain period of time. The writer may regain the rights automatically or subject to a lien in the sum of money which the producer paid the writer for the rights and possibly for the writer’s writing services. The producer generally does want the writer to set up the project elsewhere with the producer being out of pocket for his or development costs. How a writer deals with such a lien is a matter of negotiation between the parties. (The writer usually gets the producer or studio who wants to produce the project based on the writer’s script to repay such development expenses to the first producer who acquired such rights.)

6. WHEN A PRODUCER GETS THE FINANCING FOR THAT PROJECT WHICH USES YOUR SCRIPT BUT THE PRODUCER WANTS TO GIVE WILLIAM GOLDMAN (OR SOMEONE’S RELATIVE) “FIRST CRACK” AT THE REWRITE.

One of the points of contention between a producer and a writer is whether the writer will have the right to perform the first rewrites which a producer may request. A writer usually can negotiate for the right to perform the initial rewrite or two. However, if the producer and the writer have reached a creative impasse or a producer does not believe that the writer can take the development of the script to the next level, the producer may seek to hire a more experienced writer to expedite the development process as well as be able to inform potential funding sources that a writer with a “track record” is now working on the script. In other instances, a producer may hire a writer with whom he or she as a relationship so that the producer has a sense of certainty that the script will be developed as per the producer’s “suggestions.”

5. WHEN A PRODUCER WANTS THAT “ONE LAST REWRITE”–20 TIMES AND FOR NO FURTHER COMPENSATION.

In negotiating his or her continued involvement in a script’s development, a writer has to decide whether he or she is willing to work on one or two rewrites for no or very little money. If the writer requests compensation for each rewrite, a producer may decide to hire another writer who would be willing to rewrite “on spec” or for a very nominal amount. (In theory, this new writer should and/or would not be a WGA member since the WGA forbids no money or below WGA minimum compensation for their writer members’ services).

Without that WGA safety net, a writer may wind up writing multiple drafts for little or no money. A writer should balance the need to be flexible when working with independent producers by providing perhaps a rewrite and a polish for no or a nominal amount of money and then should be compensated for further writing services.

4. AFTER WORKING ON THAT SCRIPT FOR NUMEROUS DRAFTS AND MONTHS, YOU NEVER RECEIVED THE CONTRACT THE PRODUCER PROMISED YOU ONLY TO DISCOVER THE SCRIPT IS GOING IN A “DIFFERENT DIRECTION”  AND THE PRODUCER THANKS YOU FOR YOUR “HELP” AND THAT YOU WILL GET PAID ONCE THE FINANCING COMES THROUGH–ANY DAY NOW.

A writer can remove much of the vagaries and speculativeness of “spec writing” by negotiating and entering into an option agreement with a right for the producer to purchase the script’s rights or a writing services agreements and ensuring that the agreement is signed by the writer and the producer. This agreement is a form of protection not only for the writer but for the producer as well as since any funding source will insist that a producer provide a “chain of title” regarding the script and any additional script versions. Such “chain of title” is similar to a “chain of title” to a house that one decides to purchase. A producer can prove that he or she has the right either to acquire the script’s rights or has purchased and now owns such rights by providing the requisite signed agreements to a funding source. Otherwise, a producer will not be able to enter into an agreement with the funding source and the possibility of producing a project based on the script becomes increasingly dim.  At worst, the absence of such documentation between the producer and the writer (as well as any other writers) can result in the parties behaving as if they are in a bad remake of “The Treasure of the Sierra Madre” in which all parties fight over what each person should receive (similar to the scenes when the movie’s characters fight over who owns the gold), resulting not in a motion picture or a television project but an environment which is ripe for litigation and acrimony by the parties.

3. YOU ARE NOT A WGA MEMBER AND/OR THE PRODUCER IS NOT A WGA SIGNATORY AND THE PRODUCER WANTS TO GIVE THE PRODUCER’S “SIGNIFICANT OTHER” SOLE SCREENPLAY CREDIT.

As previously noted, if a writer is a WGA member (or is deemed a “professional writer” according to the WGA guidelines), then the rules and definitions pertaining to writing credits shall govern. However, a non-WGA screenwriter and a non-WGA signatory producer can agree by contract to be bound to the WGA credit rules. If neither of these scenarios apply, then the issue of credit becomes a matter of negotiation between the parties.  One of the reasons that the WGA has credit rules and arbitration procedures to determine writing credits for a script goes back to the early (and not so early days) of the motion picture business in which studios and producers were responsible for who received credits. A studio executive, the producer or the producer’s crony would receive a credit and the writer had to hope or insure by persuasion or a studio’s or a producer’s sense of integrity (or its or his desire to continue a relationship with that writer) that the writer received the appropriate credit or any credit at all.

I remind many writers that the issue of credit is more than one of vanity. A writer’s credits is what establishes the writer’s track record and helps set the writer’s quote  of how much a writer has been paid for writing in the past and expects to be paid by a studio or a producer. This is one of the rationales for including a provision in any writer’s contract that if there is dispute between the producer, and the writer and the parties cannot resolve such dispute, then the credit issue should be determined in accordance with WGA credit rules. Such rules determine the basis for a writer receiving a “written by” “screenplay by” or “teleplay” credit, a “story by” credit or any credit at all. By using the WGA credit rules, the initial writer generally will receive a sole “written by” credit or a shared “written by” credit unless a subsequent writer(s) significantly rewrites the script. If a script has been so extensively rewritten by a subsequent writer(s) that the subsequent writer(s) either shares the “written by” or receives a sole “screenplay by” credit, the initial writer may receive a “story by” credit. In a non –WGA situation, the producer and the writer can include a provision in their agreement that the initial writer would be entitled to receive no less than a certain credit regardless of whether the WGA credit rules would deny the initial writer such or any credit.

If a writer can receive a “written by” credit for an original script or share in the “screenplay by” or “teleplay by” credit with a subsequent writer(s), then the initial writer would be entitled to receive monies when such subsequent productions as prequels, sequels, remakes, television films or a television series are produced even if the initial writer does not render any services on such subsequent productions. These monies are called “passive payments.” The irony is that if a writer is hired to write a script for one of these subsequent productions, that writer would negotiate compensation for such writing services but would have to forfeit the passive payments for that subsequent production since the writer is obviously no longer passive for that subsequent production.

2. YOUR SCRIPT BECOMES A FILM AND YOU GO TO A SCREENING AND SEE SOMEONE ELSE’S NAME AFTER THE “WRITTEN BY” CREDIT.

One day political humorist and writer Art Buchwald attended a screening of *Coming to America* starring Eddie Murphy and noticed that many of the elements in that film’s script were quite similar to those contained in a treatment which Buchwald had written  and  submitted to Paramount Pictures—the studio which produced and distributed the Murphy movie. Buchwald was further surprised to see that he did not receive any writing credit in the movie. Buchwald eventually brought a lawsuit against Paramount Pictures and did win (although he received less than a $1 million rather than millions of dollars).

One of the reasons that Buchwald prevailed in his claim was that the claim was not for copyright infringement but for breach of an option agreement between Buchwald and Paramount Pictures, especially when the studio permitted the Buchwald option to expire before it produced *Coming to America.* Buchwald’s breach of contract claim against Paramount Pictures could be litigated in California state court rather than federal court which is the venue for copyright infringement suits, and such breach of contract claims are easier to prove than a copyright infringement claim which calls for a fact-specific finding of “substantial similarity” between a potentially infringing property and the property owned by the person who has brought the copyright infringement suit.

1. YOU NEVER GET THAT CONTRACT THAT THE PRODUCER SAID WOULD BE HERE ANY DAY NOW.

Many writers are often surprised by how much time passes during the negotiation, review and revision process for a writing agreement with multiple rounds between the writer and the producer, the studio or the network.

There are several reasons for this protracted process. Although the writer is concerning with his or her deal, the business affairs executive or attorney for the producer, studio and network considers the writer’s deal is one of many deals which are in different stages of negotiation and have different degrees of urgency and priority. In addition, the business affairs executive usually has to consult with the producer’s, studios or network’s legal department (which often sets contractual policy and precedent) that the business affairs executive must execute when negotiating with writers and their representatives. Therefore, as a rule of thumb, the more a writer and his or her representative want to propose terms which vary from the producer’s, studio’s or network’s contractual precedents and policies, the longer the writer and the representative will have to wait for such proposed revisions to wind their way through a company’s bureaucracy before the writer and the representative receive a response (favorable or not) to their proposed contract revisions.

Sometimes there is a delay in a writer receiving an initial draft and revisions to an option/ purchase or writing services agreement from a producer since that producer may be drafting or revising the agreement himself or herself rather than hire an attorney. The producer often is trying to cut down on costs related to the project or the producer believes that he or she can write or revise the contract since he or she has seen and negotiated many of these agreements. This approach by the producer is as “penny wise and pound foolish” as the writer who decides to negotiate his or her own agreement rather than incur legal expenses. Although some writers have agents who can negotiate a writer client’s agreement for a ten percent commission, it is in the writer’s best interest to have a lawyer at least review and comment upon the initial agreement and any revisions. An entertainment lawyer has the experience which comes from negotiating many agreements and is usually sensitive to certain details and nuances in agreement which may vary from the so-called “standard” contract.

A writer should realize that engaging and paying an entertainment lawyer is part of the cost of a writer doing business as a professional writer. An entertainment lawyer’s services can ensure that a writer receives not just immediate benefits (e.g., greater compensation and credit) but also long-term contractually guaranteed provisions , even when such provisions (such as a more favorable definition of profit participation, passive payments; the right to render additional writing services on a project as well as for the scripts for subsequent projects based on the writer’s script) only may become apparent and valuable to the writer several years after the agreement  has been signed by the parties.

© 2011 Robert L. Seigel All Rights Reserved.

Other acquisition bedfellows included Roadside Attractions which acquired U.S. theatrical, DVD and some digital platform rights with HBO which acquired the overall U.S. rights initially for James March’s chimpanzee as family member documentary “Project Nim.” Roadside Attractions also partnered with Lionsgate (which has a minority interest in Roadside Attractions) to acquire North American rights for a reported $1 to $2 million to J.C. Chandor’s Wall Street thriller “Margin Call” starring Kevin Spacey and Jeremy Irons. Lionsgate is equipped to handle DVD rights through its home entertainment division and pay television rights through the Epix pay channel formed by it, Paramount and MGM. Roadside Attractions also acquired on its own the North American rights to Miranda July’s follow up film “The Future” (with Lionsgate probably handling the DVD rights).

Other acquisition collaborations included Magnolia Pictures and the non-distributor, social-themed oriented production company Participant Pictures (“An Inconvenient Truth,” “Waiting for Superman,”  and “Good Night and Good Luck”) securing the U.S. rights to the documentary “Page One: A Year Inside The New York Times;” IFC and Sony Worldwide Acquisition (a separate company from Sony Pictures Classics) acquiring the North American rights for a reported $1.5 million to George Ratliff’s “Salvation Boulevard,” a darkly comic examination of religion with a “39 Steps”/”The Fugitive” twist, starring Pierce Brosnan and Jennifer Connelly. Such companies play to their respective distribution strengths and permit the sharing of “upside” risk when actors explore roles in non-studio films.

Some company acquired rights although they are not conventional distributors. Participant Pictures acquired rights to Sundance Audience Award winner “Circumstance,” which examined two young Iranian women as they explore western culture and their sexuality. Liddell Entertainment secured domestic rights and most international rights in the horror remake “Silent House” starring indie rising star Elizabeth Olsen for a reported $3 million. Liddell Entertainment not only has produced independent films and television series previously but it has strategically partnered with and provided the “P & A” monies to such distributors as Roadside Attractions for the U.S. release of “Biutiful” which stars Javier Bardem.  This scenario serves as another example of companies pooling and thereby maximizing their respective resources and limiting financial risk.

Several distributors acquired U.S., North American or occasionally worldwide rights to Sundance entries in the low seven figure range such as  Fox Searchlight which had a constant presence at the festival when it secured the rights to several film s including Gavin Wiesen’s “Homework” starring Freddie Highmore, indie staples Emma Roberts (“Twelve,” “It’s Kind of A Funny Story”) and Elizabeth Reaser for a reported $3 million-plus  advance (and a reported $2 million marketing and release commitment), and Sean Durkin’s “girl escapes a cult” film “Martha Marcy May Marlene” also starring Elizabeth Olsen for a reported $1.6 million for worldwide rights. Home entertainment company Anchor Bay paid a reported $2 million (and an undisclosed sum for a theatrical marketing commitment) for domestic rights to Ditto Montiel’s crime drama “The Son of No One” starring Channing Tatum and Katie Holmes with a featured role by Al Pacino although the film received less than enthusiastic word of mouth at its Sundance screenings. Although Millennium has First Look Pictures as a sister company to handle domestic rights, Millennium appears to have decided to seek a strong independent DVD distributor in the case of Anchor Bay.

Other Sundance deals included Focus Feature’s sole acquisition: of worldwide rights for a reported $800,000 to “Pariah,” Dee Rees’ study of an African American woman acknowledging that she is a lesbian to herself, her parents and the world. Focus Features seems to be investing in Rees’ talent as well as her film since the deal included Rees’ next project. IFC continues its volume exploration of relatively low budget films for niche audiences as well as maintaining its relationship with “mumblecore” leading figure director Joe Swanberg by its Sundance Selects’ acquisition of the domestic rights to his “Uncle Kent” flipcam feature. IFC also acquired the rights to Michael Tully’s Septien” which even its sales agent admitted is an unconventional and problematic film to market.

Such companies as HBO saw the future value of certain independent films beyond their own respective commercial and artistic value and strengths by deciding to acquire the remake rights to the Irish clan feud and bare-knuckle brawling documentary “Knuckle” and to develop it as a television series to be produced by David Gordon Green’s Rough House Pictures with Fox Searchlight doing the same when it secured worldwide remake rights to “The Bengal Detective” for an English language version

Newcomers such as The Motion Picture Group (which theatrically released Deborah Kampmeier’s Southern Gothic tale “Hounddog”) acquired the worldwide rights to first-time filmmaker Rashaad Ernesto Green’s coming of age in the Bronx feature “Gun Hill Road” for a reported low seven- figure advance, and veteran distribution player M.J. Peckos’ Dada Films secured U.S. theatrical rights for Bill Haney’s small town versus coal company documentary “The Last Mountain.”

It will be interesting to see whether the sales agents, distributors and licensees that attended this year’s Sundance, with their more flexible, strategic, (often collaborative, rights splitting) dealmaking approach to these festival films, can make the jump of taking the festival’s audiences’ reactions for these films and parlay them through equally innovative marketing to the arthouse and multiplex theatres this year in the U.S. and throughout the world.

Although general releases are often sufficient for a mediamaker when interviewing secondary or peripheral people in a biographical project, both fiction and non-fiction producers have begun to recognize the need for a project’s subject to sign a more detailed “Consent and Depiction Release” or a life story agreement.

These agreements serve several purposes. No matter how “newsworthy” a subject may become and how powerful a First Amendment argument may be, mediamakers have recognized that these project must be covered by “Errors & Omissions” (“E & O”) insurance. “E & O” insurance is a form of coverage which protects mediamakers against claims which third parties may bring concerning libel and/or slander (i.e., defamation), invasion of privacy, right of publicity and copyright and trademark infringement. These policies are required as a “deliverable element” when mediamakers enter into agreements with sales agents, distributors and other licensees that will demand to be named as “additional insured” parties under such policies.

Although mediamakers generally will secure such coverage which will ensure that appropriate clearance procedures were followed and releases obtained, life story agreements should include a key provision in which a subject waives his or her rights to bring such claims. Such waivers will assist mediamakers in securing such “E & O” coverage.

In addition, mediamakers who will devote often years on a biographical project should receive assurances from the subject that he or she will not do anything which might undermine the project’s progress or value in the marketplace. In these “Consent and Depiction Releases” or life story agreements, mediamakers should request that they receive exclusive non-fictional (and, in rare cases, fictional) rights to depict or utilize elements of a subject’s life in a media project, thereby taking the subject “off the market” regarding possibly competing projects. However, in the fiction arena, there have been several examples of directly competing projects such as the rival network television movies concerning Amy Fisher who was accused and convicted of shooting her lover’s wife. These competing projects demonstrate that even “exclusivity” provisions in life story rights agreements are not absolute since one network secured Fisher’s rights, a second network secured the rights to Joey and Mary Jo Buttafucco’s story (of how Fisher had an affair with Joey and shot Mary Jo) and a third network used news and magazine articles and court transcripts to tell its own version of the Fisher tabloid saga. Therefore, a mediamaker may be obligated to obtain the exclusive rights not only to a subject’s life story but also to the life stories of other figures such as a subject’s family members and friends.

These agreements should provide a “window” period of exclusivity that would be subject to a mediamaker achieving certain goals or “milestones;” otherwise, subjects would be precluded from having their story told even if a mediamaker abandons the project or puts it on the proverbial “back burner.” Typical “milestones” generally would require a mediamaker to secure some or all of the financing for a project or to commence or to conclude principal photography within a certain time period from the signing of the agreement by the parties. If a mediamaker does not achieve such “milestone” within a given time period, then he or she would lose “exclusivity” concerning the subject’s life story and the subject could work with other mediamakers on potentially directly competitive projects. Mediamakers should not agree to be obligated to complete production on or have a project exploited within a certain period of time since there are several factors, beyond a mediamaker’s control, which would affect the ability of a project to be distributed such as changing programming and audience interests. Mediamakers should also never have their rights to produce a project non-exclusively contingent upon such “milestones”; otherwise, the mediamaker’s years of hard work and expended funds will be destroyed.

Life story rights agreements also should contain a “covenant of cooperation” provision in which a subject agrees to provide the mediamaker with access to any information in the subject’s possession (e.g., newspaper and magazine articles, photographs, personal notes and writings and other memorabilia). Still mediamakers should recognize the existence of the rights of privacy of third parties who may have written, sent or been mentioned in such private papers. Another aspect of this cooperation covenant would require the subject to use reasonable or best efforts to work with the mediamaker to obtain releases from such third parties as a subject’s family members and/or friends. Although a subject generally cannot guarantee success in such efforts, a subject can assist a mediamaker in producing the project and lessening a mediamaker’s possible legal exposure.

The other key element in a cooperation covenant is a provision to limit or prevent a subject, for a certain period of time, from entering into an agreement with other mediamakers who may want to produce potentially competing fiction or non-fiction projects, thereby undermining the mediamaker’s efforts to place the project into an often narrow marketplace.

There should be a “grant of rights” provision in these agreements which would permit the mediamaker to market and exploit the project throughout the world (or even the universe, especially with the growth of direct broadcast satellite delivery), in perpetuity and in any medium, “whether now known or hereafter devised” such as by theatrical release (if applicable), home video (including DVD and other formats), television (including network, syndication, cable, satellite, etc.) and by interactive and/or on-line means.

Another feature of such a grant of rights is the right by the mediamaker to secure the rights to a subject’s life story so that a mediamaker can enter into a financing/distribution agreement with a distributor, sales agent or licensee, either before, during or after production of the project. Mediamakers also should have the right to use a subject’s name, voice, nickname or likeness not only in the project itself but also in the advertising and promotion of the project. These rights and the other provisions of the life story rights agreement should be assignable to a mediamaker’s successors and assigns such as a sales agent, distributor or licensee. These rights should be allowed to be exercised within a mediamaker’s sole discretion as much as possible; otherwise, a mediamaker may have difficulty securing a financing or a distribution agreement for the project.

One of the most important issues in the life story rights agreement concerns the extent to which a subject may have either consultation or approval rights concerning aspects of a project. This issue forces the mediamaker to balance the need to form a relationship built on trust with a subject with the mediamaker’s ability to produce a project with a minimum of interference by a subject. This concern also includes how a mediamaker shall address his or her interests with those of a subject’s family members and friends. Mediamakers, only in the rarest of cases, should grant any approval rights to a subject for the reasons addressed previously in this article; however, mediamakers can grant “meaningful consultation” rights (i.e., a subject’s right to review and comment on the project) either throughout the course of the project or just prior to when the final version of the project is available for screening. While some mediamakers will listen to a subject’s comments and alter or edit their project accordingly, other mediamakers will listen and decide not to include a subject’s comments or suggestions in a project.

Some mediamakers, such as Jennifer Fox (who produced and directed the commercially and critically successful “An American Love Story”), will take the potentially problematical and risky step of agreeing to remove any part of a project that may cause a subject significant concerns prior to the project’s distribution or release. These decisions are often based on the relationship between a mediamaker and a project’s subject.

A mediamaker’s agreement should also address the mediamaker’s right to produce and/or license others to produce such ancillary products as companion books, audio recordings and, in some cases, merchandising. These rights are often granted unconditionally to the mediamaker and, in other cases, subject to good faith negotiations by parties, especially if the parties cannot reach an agreement concerning this issue at the time of entering into the agreement.

There should be a clear understanding of whether a mediamaker has acquired solely non-fiction rights to a subject’s life story or fiction rights as well. Mediamakers should recognize that a subject may want to grant these rights to different parties, especially if one area is within a mediamaker’s expertise or experience. In addition, the agreement’s terms can vary under each scenario since the markets for fiction and non-fiction rights are different in nature and scope. Still non-fiction mediamakers may want to create “re-enactments” of certain parts of a subject’s life story. If a mediamaker wants the right to produce such re-enactments, then a provision concerning fictionalization should be included in the agreement.

One of the thorniest provisions in the life story rights agreement concerns whether and how a subject should be compensated for his or her rights as well as involvement in a mediamaker’s project. Some mediamakers will maintain that such payment or even potential payment often can compromise a project’s integrity by introducing a monetary motive, while other mediamakers would argue that compensating a subject for his or her time and participation is simply a pragmatic economic reality, especially given such factors as a subject’s time commitment during a project and the proliferation of outlets for such biographical projects on basic and pay cable as well as on home video.

Both mediamakers and subjects must recognize the economic realities concerning non-fiction projects: that for every Roger & Me or Hoop Dreams, there are many projects which lose money for the mediamaker or just break even since the revenue streams and markets for non-fiction are rather small and limited compared to those found with fiction projects.

While some subjects (and their advisors) often may request that their compensation should be at least a fee which is taken from a project’s budget, they do not recognize the fact that such projects are often funded in increments over a period of time, thereby reducing the likelihood that there will be upfront fees for subjects. Mediamakers and subjects, therefore, often enter into profit-sharing or deferment arrangements in which the subject would be paid either a fixed sum or a percentage of the monies derived from the project’s exploitation often after a project’s costs have been recouped or repaid. Since the likelihood that a project shall generate such “profits” is remote, the mediamaker’s offering of such potential profits is often a sign of good faith by the mediamaker to acknowledge the importance of a subject’s involvement in a project.

Although certain mediamakers and subjects are reluctant to enter into this type of agreement, this agreement is not only prudent from a business and legal standpoint but also can be one of the first steps for a mediamaker and a subject to establish a relationship based on openness, fairness and trust.

Taken to an extreme, the producer may offer “no money down” or $1 options for a period of 18 months, renewable at a producer’s discretion for an additional eighteen months for no or some nominal sum of money.  So why would a writer accept an option that could tie up his or her work for three years with little or no cash in return?

It’s not insanity.  Many writers have discovered that it’s a buyer’s market, with too many scripts in circulation and not enough producers.  Producers serve as advocates, championing a script when they submit it to financial sources—which, most times, the writer wouldn’t otherwise have access to.  If the producer has produced several projects, that track record might impress potential funding sources or, if that producer has produced a somewhat financially successful project, then he or she can return to prior funding sources or attract new financiers.

Not long ago a new twist has been added to the picture: the “shopping” agreement. This is an arrangement whereby a producer pays no option money and is given the right to submit a writer’s script to specific financiers. As part of the shopping agreement, the producer must provide a list of funding sources he or she will approach—studios, independent distributors that can finance a project in whole or in part, larger production companies, reputable foreign sales agents, and such “end users” as network, cable, or syndicated television and video companies.  Additional funding sources could be added periodically.  The point is, the writer knows exactly to which parties a producer has submitted a project—a feature usually absent in the conventional option agreement.

What’s more, unlike the usual option agreement, the shopping agreement may be either exclusive or nonexclusive with a particular producer.  If nonexclusive, the writer or other parties may submit the script to their own respective funding sources.  This creates a level of freedom for the writer and a degree of competitive pressure for the producer that can help speed a script’s development along. Obviously, it is important that everyone informs each other and coordinates their efforts to prevent duplicate submissions and confusion.

Another feature of the shopping agreement is that its term is usually for a shorter period of time than a regular option agreement—that is, for three to six months, as opposed to a year or more.  This helps motivate producers to get feedback from funding sources in a relatively short amount of time.  (As always, there can be loopholes written into the agreement.  If, for instance, a producer is in the midst of negotiating a proposal with a potential funding source as the shopping agreement term expires, a provision in the agreement should permit an extension until the producer’s negotiations have concluded, one way or the other.)

Due to the short term of the shopping agreement, the producer may insist on a provision that bars the writer from approaching the listed funding sources for a certain period of time (e.g., six to 12 months) without the producer’s consent.  Writers can limit the scope of this non-circumvention provision, however, by permitting the writer to approach these funders during this period without the producer’s consent if the writer brings a new or changed element to the project.  This would include the addition of a “name” actor or director.

Another major difference between the standard option and the shopping agreement lies in the area of pre-negotiated terms—the script’s purchase price, a writer’s credit and compensation, the rights granted, and any right to participate in such “spin offs” as sequels and television series.

In regular option agreements, such terms are fully negotiated and stated in the option agreement, which both parties sign.  If a producer exercises the right to purchase the script, the producer and writer are bound by the terms of the agreement.

In the shopping agreement, such pre-negotiated terms may be replaced by the right of the producer and the writer to negotiate his own arrangement with a financing source. For instance, the writer could negotiate the underlying rights to his or her script or writing services, while the producer is simultaneously negotiating for his or her production services.  This absence of pre-negotiated terms permits a writer to negotiate a possibly more favorable deal.

This also can create problems, however.  Since the producer cannot simply present pre-established terms to any funding source, her ability to fund and produce a project is subject to the ability of the writer and a funding source to reach a mutually acceptable agreement. If the writer and the financier cannot reach an agreement—whether because of a lack of communication, or the writer having an unrealistic sense of his or her script’s value in the marketplace, or some other stumbling block—the producer’s deal cannot be concluded successfully.

There are several ways to address this issue.  The shopping agreement may include a provision in which the parties agree to negotiate their respective deals in good faith concerning such terms as the producer’s and writer’s compensation and credit. The agreement could also state that if the financier offers the writer an agreed-upon minimum amount or “floor” payment for the acquisition of rights to the script and/or the writer’s services, then the writer would have to accept this proposal.

Writers may question why there is an emphasis on a writer’s ability to reach an agreement.  On a pragmatic level, similar provisions applying to the producer could be included in a shopping agreement.  However, it’s industry custom for producers to approach funding sources with established parameters for the acquisition of rights to a script.  Producers may be reluctant to enter into shopping agreements without that comfort level or certainty.  Writers can argue, however, that the absence of such pre-negotiated terms is the trade-off for the producer receiving a free option.

Finally, the shopping agreement usually states that the failure of the producer or writer to reach an agreement with a financier would not constitute a breach of the agreement, provided that each has negotiated in good faith.

Whether a shopping agreement is the right choice will depend on the intentions and flexibility of the writer and producer as they deal with one another in attempting to reach a common goal: to finance a project based on the writer’s script.

Disclaimer: The information provided here is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Many of the legal principles mentioned might be subject to exceptions and qualifications, which are not necessarily noted in the answers. Furthermore, laws are subject to change and vary by jurisdiction.

This type of “Netflix Channel” phenomenon has lead many cable channels and other television services to establish firm rules when licensing the rights to a mediamaker’s project regarding whether and/or when a mediamaker’s project can be streamed or downloaded in a territory by an entity other then the cable channel’s or other television service’s own streaming or “on demand” services. Mediamakers are usually presented with a license agreement from cable channels or other television services in which there is a “blackout” or holdback period during the license term when mediamakers cannot utilize any third party streaming or “on demand” means to have their projects exhibited. In other words, mediamakers have to make a decision to forego the streaming and/or “on demand” revenue generated outside of a cable channel or other television service license in a territory during a license period.

Mediamakers also should bear in mind that part of a cable channel or other television service’s license holdback is a prohibition against any form of “on demand” services during the license term. including “free-on-demand,” “subscription-on-demand” or “transaction-on demand.”

In some cases, cable channels or other television services argue that their streaming or “on demand” exclusivity provisions extend not only during the license period of the cable channel’s or other television service’s license but also prior to the license period. In other words, if a mediamaker has already made a deal with a streaming or “video on demand” service such as Netflix and then approaches certain cable channels or other television services, the cable channels or other television services may decide that the project is no longer an “exclusive” or truly a “premiere” and either not offer a license or withdraw their license offer. Mediamakers are forced to forego any streaming or “on demand” exhibition (other than those of the cable channels or other television services) of their projects until after the cable channel’s or other television service’s license period has expired in order to enter into such cable channel’s or other television service’s license. Mediamakers have to decide whether the monies generated by the “exclusive” and “premium” cable or other television service license justify passing up viable revenue from outside streaming or “on demand” exhibitions for terms of approximately two years or even more.
In many licensing agreements, the prohibition against “streaming” and “on demand” exhibition is included in the broad “non-standard television” definition in the license such as in the following example:

“Non-Standard Television” shall mean transmission to individual or multiple receivers by all means of technology, whether now existing or hereafter invented, other than Standard Television. Non-Standard Television shall include, without limitation, transmission by means of cable, direct broadcast satellite, pay DTT, LPTV, CATV, SMATV, MMDS, TVRO, microwave, wireless cable, online (e.g., downloads, streams), via file server (e.g., VOD), DSL, ADSL, telephonic, scrambled UHF, super stations, and closed circuit television systems. “

Mediamakers, therefore, should bear in mind that the cable channel’s or television service’s license should be very clear about whether the holdback period is just during the license period or if it includes any time period before the license term commences. Some cable channels or television services are interested only in the holdback during the license period so mediamakers can coordinate “take down” or “blackout” streaming periods prior to and after the cable channel’s or television service’s license term.

A cable channel or other television service license also may include a provision against a sale of a copy of a mediamaker’s project by DVD or “download to own” by sold by the mediamaker and/or a thirty party either before or during the license period. These restrictions should be excluded from any holdbacks in a television license unless there is some form of DVD and “download to own” holdbacks for a very limited period of the license term (e.g., until a certain date within the license term).

In fact, such DVD and “download to own” holdbacks generally should be omitted in any television service license. The revenue generated from the DVD as well as the “download to own” release of a project may be the only significant revenue received by a mediamaker during a cable channel’s or television service’s license term and in general.

Although some cable channels and other television services are beginning to embrace the concept of having viewers watch the cable channels’ or other television services’ own programming on such services as Google TV, usually such viewers have to be subscribers with a given cable channel or television service.

Netflix signed a five-year deal reportedly worth about $1 billion with Epix, the movie-channel venture of Paramount Pictures, MGM and Lionsgate, to be able to stream movies ninety days after their premiere on the linear TV channel.
Netflix and NBC Universal Domestic Television Distribution have entered into an agreement under which Netflix subscribers will for the first time get instant, on-demand access to several past USA Network and Syfy series.
It is prudent for mediamakers to explore all of their television alternatives (and not just cable channels) prior to considering and entering into a streaming and/or “on demand deal with such services as Netflix. Mediamakers have to do their due diligence regarding these licenses as well as the sequence of the “windows” for such licenses and negotiate accordingly when they have to assess the potential economic impact of having to make that decision.