Answers from Mark Litwak, Attorney At Law
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.
Question: Realistically speaking if I self-finance a picture for four million dollars and have stars such as Kevin Spacey, Forrest Whitaker, Jean Reno or some other international star, and Natasha Henstridge, do you think I will have enough clout to get a distributor to pony up all my budget for the rights and some guaranteed advances on profits so that I could get back around 5 million from a North American Distributor for all rights (so my investors will see their cash back), exclusive of future profits? Also, would you recommend I sell the film territory by territory, country by country, before or after it is made? And do you think from foreign, even if I use a sales rep, I could get at least another two to four million in sales/guarantees? Breaking down the major countries: Germany, Italy, France, U.K., Japan, Spain, and Netherlands, what do you think I could get from each based on the level of talent I mentioned, or any similar level talent, including the fact the project is a psycho-erotic drama.
Answer: I think it is possible, but not likely, that you will get your five million back and then some from a domestic distributor. But, of course, everything depends on the quality of the film that is produced. However, if you look at what most indie films earn domestically, it is not likely. I think you should try to reduce your budget, put as much as possible up on the screen, and check beforehand with an experienced distributor to determine the appeal of the cast in the international marketplace. If you have not sold to foreign buyers before, you may find it difficult to convince them to purchase from you even if you have an attractive package. It is likely that you will need to work with an experienced and honest sales agent to succeed.
Question: I've purchased and read both of your books. They're excellent. Here's my Q. If you have a great script (romantic action adventure) and you raise the negative costs through private funding (limited partnership, etc.) and you have attached a star and well respected director, what are your chances of negotiating a distribution deal favorable enough to give your investors some confidence they will see some return. In other words, if I've got 25 million dollars and the distributor invests 15 - 25 in advertising and distribution what are the odds on a 50/50 1st dollar in split between the producer and distributor?
Answer: If your movie is something that is highly desirable, then you'll have a lot of negotiating clout and can probably get a good deal. On the other hand, if the movie doesn't turn out that well, you may not be able to get any distribution at all. It's very rare for someone to raise money from private investors to fund a 25 million dollar picture. Most pictures funded by private investors have much lower budgets. If you deal with honest distributors and have a tight contract, to make a good movie, you stand a good chance of seeing money.
Question: A friend and I are trying to produce our first independent film. We plan to raise money for the production costs through private investors. At the same time we are trying to live as we do this. Is it possible for us to receive small amounts of money from people and local businesses, $100 here $500 there given to us and the project as a GIFT, so that we can continue our fundraising practices full time? These would not be repaid but we would give a "special thanks to" in the credits. Is this possible? We would like to approach local businesses with this concept since the subject matter of the film is of local interest. Are there any guidelines for this sort of thing?
Answer: There is no problem with other people giving you gifts, and there is no problem with giving credits or acknowledging people for gifts in your credits Gifts and loans are not a "security." Consequently, the security laws do not apply. As far as taking money from investors, however, if these investors are passive investors, that is, they are not actively involved in making the movie, you should make sure that you comply with state and federal securities laws. You should never take money from investors until you have given them a written limited offering memorandum, sometimes called a prospectus. This should be prepared by a lawyer who is knowledgeable in entertainment and securities laws.
Question: Can you provide me with any information related to the direct-to-video industry? If a have a script, how can I get it to video vs. network or cable?
Answer: Go to a video store and find the names of the distributors of videos like yours, or read Video Business Magazine, which lists many videos including direct-to-video programs. You may also want to attend the next Video Software Dealers Association (VSDA), a trade convention for people in the video business.
Question: The Estate we represent is in negotiation with a studio to obtain payment for domestic distribution rights to a film made some years ago. The studio earns about $25,000 - $30,000 per year from these rights. The term for which they seek re-license will be 47 years. We have not previously encountered this situation and wonder what appropriate compensation would be. The studio has already made a conservative offer so they view the income as viable. We thought anything between ten and fifty percent of their income can be defended but hope to make an offer that is based on some precedent. Can you please advise?
Answer: The film was made a number of years ago and is now earning $25,000 to $30,000 per year. I assume this money is coming from the home video market. Producers of films often receive a royalty of 20-25% of the wholesale price of home videos sold. Keep in mind that many studios license their films to their own home video subsidiaries. Those subsidiaries pay a royalty to the parent company, which in turn, shares that revenue with the producer. So I would first make sure that this is all they are generating from exploitation of these rights. Ascertain exactly which rights they are using and reserve all other rights. Then try to obtain at least 20% of the wholesale price as a royalty.
Question: I have been working with developers of interactive content for broadband distribution via e.g. web TV, @Home, etc. and wondered whether you have been adding language to standard talent and production agreements for television programming in contemplation of the types of "derivatives" to a show resulting from the convergence with other content/technology/etc. after the show has been produced. I'm curious as to whether and what the industry is focusing on in negotiating talent agreements (for example) in light of convergence technologies?
Answer: Yes, attorneys are becoming much more careful in limiting what rights their clients are granting. In many cases, we specifically restrict the use of films so that they cannot be disseminated over the Internet or turned into interactive programs unless those rights are also purchased. Any source
No comments:
Post a Comment