Legal Issues in Film Pre-Production

Legal Issues in Legal Issues in Pre-ProductionPre-Production

Donald R. Simon, Donald R. Simon, J.D./LL.M.J.D./LL.M.,,

Adjunct FacultyAdjunct Faculty

http://www.artinstitutes.edu/Default.aspx

Legal Issues in Pre-ProductionLegal Issues in Pre-Production

• LLCsLLCs

• ContractsContracts

• PermitsPermits

• ReleasesReleases

• Production insuranceProduction insurance

• Items to begin in Pre-Items to begin in Pre-productionproduction


How Much Do You Need to Know?How Much Do You Need to Know?

– To protect themselves and their projects To protect themselves and their projects from lawsuits and other legal from lawsuits and other legal entanglements, media producers need to entanglements, media producers need to be familiar with key areas of the law.be familiar with key areas of the law.

– GOOD NEWS: Media producers GOOD NEWS: Media producers do notdo not need to be lawyers!need to be lawyers!



– But But dodo need to anticipate and identify the need to anticipate and identify the many potential legal issues that can many potential legal issues that can come up during a production and come up during a production and recognize when to call a lawyer.recognize when to call a lawyer.


How Much Do You Need to Know?How Much Do You Need to Know?


Media Producers Should Know:Media Producers Should Know:

– For exampleFor example::

• When parties should put agreements in When parties should put agreements in writing.writing.

• When permits, permissions, and releases When permits, permissions, and releases are required during the course of a are required during the course of a production.production.

• What steps are necessary to add music to What steps are necessary to add music to a production.a production.



Limited Liability CompanyLimited Liability Company




Limited Liability CompanyLimited Liability Company::

– Combines the best elements of sole Combines the best elements of sole proprietorships, partnerships, and proprietorships, partnerships, and corporations.corporations.

– The primary advantage of an LLC is that The primary advantage of an LLC is that its owners have “limited liability,” meaning its owners have “limited liability,” meaning that, under most circumstances, they are that, under most circumstances, they are not personally liablenot personally liable for the debts and for the debts and liabilities of the LLC.liabilities of the LLC.




– Owners are called “members.”Owners are called “members.”

– ““Pass-through” taxationPass-through” taxation: profits and : profits and losses pass through to its owners, who losses pass through to its owners, who report them on their personal tax returns.report them on their personal tax returns.

– Few corporate formalities.Few corporate formalities.




– CreationCreation::

• File “Articles of Organization” with the File “Articles of Organization” with the Secretary of State.Secretary of State.

• Operating AgreementOperating Agreement: governs the inner-: governs the inner-workings of your LLC.workings of your LLC.

• Annual filings with the Secretary of State.Annual filings with the Secretary of State.




– CreationCreation::

• Get a Tax I.D. from the IRSGet a Tax I.D. from the IRS

• Open a biz checking account.Open a biz checking account.




– What will the LLC do?What will the LLC do?

• Be a party to all production contracts and Be a party to all production contracts and insurance agreementsinsurance agreements

• Acquire story rights (with written contracts)Acquire story rights (with written contracts)

• Hire the cast and crew (with written contracts)Hire the cast and crew (with written contracts)

• Rent equipmentRent equipment

• Be the named party in the event of a lawsuitBe the named party in the event of a lawsuit


ContractsContracts



Contracts:Contracts:

– Like any biz, the biz of media production Like any biz, the biz of media production involves managing working relationships.involves managing working relationships.




– Producer manages relationships with:Producer manages relationships with:

• Talent;Talent;

• Unions and guilds;Unions and guilds;

• Writer;Writer;

• Production and post-production personnel;Production and post-production personnel;

• Client who commission the work; andClient who commission the work; and

• Various subcontractors and suppliers.Various subcontractors and suppliers.




– In an ideal world, all production In an ideal world, all production relationships would be based solely on relationships would be based solely on handshakes and trust.handshakes and trust.

– Unfortunately, the world of production is Unfortunately, the world of production is rarely ideal.rarely ideal.

– Experienced producers usually will seek Experienced producers usually will seek formal, contractual assurance the formal, contractual assurance the promised services will be completed.promised services will be completed.




– Although they cannot guarantee the Although they cannot guarantee the success, production contracts can do the success, production contracts can do the following:following:

• Specify the responsibilities of various parties;Specify the responsibilities of various parties;

• Designate delivery dates for services;Designate delivery dates for services;

• Delineate compensation for various parties; andDelineate compensation for various parties; and

• Provide for what happens in the event of a Provide for what happens in the event of a dispute.dispute.




– A contract is an agreement A contract is an agreement that creates obligations that creates obligations between 2 or more parties.between 2 or more parties.

– In addition, once the In addition, once the contract is placed in writing contract is placed in writing and signed by the parties, it and signed by the parties, it serves as serves as proofproof of those of those obligations.obligations.




– This is why, even though oral contracts This is why, even though oral contracts are considered valid in many are considered valid in many circumstances, all media production circumstances, all media production contracts should be placed in writing.contracts should be placed in writing.

– In the event of a dispute, the written In the event of a dispute, the written contract provides immediate proof of the contract provides immediate proof of the terms to which they agreed.terms to which they agreed.




– Common contract termsCommon contract terms::

• Names of the parties (one will be your LLC)Names of the parties (one will be your LLC)

• Detailed description of work to be performedDetailed description of work to be performed

• Fee and payment scheduleFee and payment schedule

• Term and terminationTerm and termination

• Freelance / work-for-hireFreelance / work-for-hire

• Dispute resolutionDispute resolution




– Do not have to be long and intimidating.Do not have to be long and intimidating.

– Instead, they should be written in terms Instead, they should be written in terms both parties can understand.both parties can understand.




– Should be clear and specific.Should be clear and specific.

– Vague language leads to Vague language leads to misunderstandings, disputes, and misunderstandings, disputes, and lawsuits.lawsuits.

– Use simple language that accurately Use simple language that accurately expresses the deal.expresses the deal.




– Depending on how complicated the Depending on how complicated the matter, you don’t necessarily need a matter, you don’t necessarily need a lawyer.lawyer.

– There are a number of good form books There are a number of good form books that media producers can use to help that media producers can use to help draft standard contracts.draft standard contracts.




– Most forms are simply a starting place Most forms are simply a starting place and need to be revised to reflect your and need to be revised to reflect your particular transaction.particular transaction.

– All “deal terms” should be included.All “deal terms” should be included.

– If a provision is important, If a provision is important, get it in the get it in the contractcontract!!




– Bring in a lawyer whenBring in a lawyer when::

• You’re being asked to sign something you do You’re being asked to sign something you do not fully understand;not fully understand;

• You’re being asked to sign something that You’re being asked to sign something that commits you or your company to a long-term commits you or your company to a long-term obligation; or obligation; or

• You’re negotiating a deal that is vital to the You’re negotiating a deal that is vital to the success or survival of your company.success or survival of your company.



ReleasesReleases




Releases:Releases:

– As a rule, producers should secure As a rule, producers should secure written releases from all performers written releases from all performers who appear in the production.who appear in the production.

– Typical releasesTypical releases::

• Performer / ModelPerformer / Model

• AudienceAudience

• LocationLocation


Releases:Releases:

– The only exception would be those The only exception would be those individuals who appear as faceless forms individuals who appear as faceless forms in crowd scenes or remote shots.in crowd scenes or remote shots.

– Just make sure these individuals truly do Just make sure these individuals truly do appear in a form that would not be appear in a form that would not be recognizable to family, friends, or a judge recognizable to family, friends, or a judge or jury.or jury.



Releases:Releases:

– For professional actors, For professional actors, the release language is the release language is usually included in a usually included in a complete contract that complete contract that covers all aspects of covers all aspects of their appearance in the their appearance in the production.production.



Releases:Releases:

– Make the performers understand the Make the performers understand the terms of the release before they sign it. terms of the release before they sign it.

– If a performer prefers not to sign or If a performer prefers not to sign or demands extensive changes, find demands extensive changes, find someone else to fill that role.someone else to fill that role.



Releases:Releases:

– Once all the performer releases are Once all the performer releases are signed, store them in a secure, preferably signed, store them in a secure, preferably fireproof, location.fireproof, location.

– You should also keep additional copies of You should also keep additional copies of the releases in a separate secure location.the releases in a separate secure location.



Releases:Releases:

– Some productions, particularly Some productions, particularly recordings of live presentations or recordings of live presentations or performances, feature shots of performances, feature shots of audience members.audience members.

– Ideally, each audience member should Ideally, each audience member should execute a written execute a written audience releaseaudience release..



Releases:Releases:

– When logistics prevent this, you should When logistics prevent this, you should post a notice prominently at all entrances post a notice prominently at all entrances to the production location.to the production location.



Releases:Releases:

– If you plan to conduct a shoot in a private If you plan to conduct a shoot in a private area, such as a person’s home, be sure to area, such as a person’s home, be sure to obtain a obtain a location releaselocation release..

– Along with protecting you from charges of Along with protecting you from charges of trespassing, location releases serve as trespassing, location releases serve as contracts that define the terms under contracts that define the terms under which you will be allowed to occupy the which you will be allowed to occupy the property.property.



PermitsPermits



Permits:Permits:

– Many states and municipalities require Many states and municipalities require permits for location work, particularly for permits for location work, particularly for work will be performed on public work will be performed on public thoroughfares or government property.thoroughfares or government property.

– Fees vary depending on where you will be Fees vary depending on where you will be shooting and your need to involve the shooting and your need to involve the police department, fire department, or police department, fire department, or other service agencies.other service agencies.



Permits:Permits:

– Begin by contacting the film and TV office Begin by contacting the film and TV office where you will be doing your location work.where you will be doing your location work.



Permits:Permits:

– The agency will be able to tell you what The agency will be able to tell you what permits you must complete.permits you must complete.

– They also offer resources such as a crew They also offer resources such as a crew database and information on production database and information on production insurance, and tax credits.insurance, and tax credits.



Permits:Permits:

– If you are caught shooting without the If you are caught shooting without the proper permits, the penalties can be proper permits, the penalties can be severe.severe.

– At a minimum, you will be forced to At a minimum, you will be forced to suspend production until the proper suspend production until the proper permits are in place.permits are in place.

– Idle crew and equipment could be Idle crew and equipment could be costlycostly!!


Permits:Permits:

– You may be also subjected to substantial You may be also subjected to substantial fines.fines.

– For some severe violations, particularly For some severe violations, particularly unauthorized use of pyrotechnics, the unauthorized use of pyrotechnics, the sanctions can include criminal penalties.sanctions can include criminal penalties.


InsuranceInsurance


Insurance:Insurance:

– Production InsuranceProduction Insurance::

• A special type of insurance that protects a A special type of insurance that protects a company against many accidents, mishaps, company against many accidents, mishaps, and acts of nature that can cause problems and acts of nature that can cause problems during a media production.during a media production.

• Most major film and TV producers protect Most major film and TV producers protect their investments through the purchase of their investments through the purchase of production insurance.production insurance.



– Production InsuranceProduction Insurance::

• Usually costs 3-to-5% of the total production Usually costs 3-to-5% of the total production budget.budget.

• Exact cost determined by risk factors:Exact cost determined by risk factors:

– E.g., extensive location work, pyrotechnics, stunt E.g., extensive location work, pyrotechnics, stunt work, etc.work, etc.



– Production Insurance CoverageProduction Insurance Coverage::

• CastCast

• Bad weatherBad weather

• EquipmentEquipment

• Property damageProperty damage

• AutoAuto

• Comprehensive general liabilityComprehensive general liability



– Errors and Omissions (E&O)Errors and Omissions (E&O)::

• Protects producers from lawsuits that may Protects producers from lawsuits that may arise from the arise from the contentcontent of a production, of a production, including:including:

– Copyright and trademark infringement;Copyright and trademark infringement;

– Libel or slander (including trade libel); andLibel or slander (including trade libel); and

– Invasion of privacy. Invasion of privacy.


Begin in Pre-Production PhaseBegin in Pre-Production Phase


Begin in Pre-Production Phase:Begin in Pre-Production Phase:

– Music ClearanceMusic Clearance::

• Takes a long time and can cost a lot of $$$Takes a long time and can cost a lot of $$$

• Need a “synchronization license” from the Need a “synchronization license” from the songwriter or music publisher; songwriter or music publisher; ANDAND

• Need a “master use license” from the Need a “master use license” from the recording company (if using a pre-existing recording company (if using a pre-existing recording)recording)



– Stock footage and image clearanceStock footage and image clearance

– Logo clearanceLogo clearance::

• Use of beer signs in bar scenes, for example, Use of beer signs in bar scenes, for example, must be cleared with their respective must be cleared with their respective trademark ownerstrademark owners



– Negotiations with potential distributorsNegotiations with potential distributors

– Follow-up on production tax incentives Follow-up on production tax incentives with state and local authoritieswith state and local authorities

– Seek out post-production crewSeek out post-production crew

• Editors, clearance assistants, composers, etc.Editors, clearance assistants, composers, etc.


ChecklistChecklist


Checklist:Checklist:

Form an LLC, get a tax ID, and set up a Form an LLC, get a tax ID, and set up a business checking accountbusiness checking account

Prepare a database of legal agreements to Prepare a database of legal agreements to use including various releasesuse including various releases

See what permits are required (if any) in See what permits are required (if any) in your city and/or stateyour city and/or state


Checklist:Checklist:

Get production and E&O insurance Get production and E&O insurance policies that fit your situationpolicies that fit your situation

Begin the music, logo, and image Begin the music, logo, and image clearance processesclearance processes

Consult with a lawyer and an accountant Consult with a lawyer and an accountant for legal and tax issuesfor legal and tax issues


For Further Reading:For Further Reading:


For Further Reading:For Further Reading:



Questions?Questions?


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Date post:	28-Nov-2014
Category:	Law
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Legal Issues in Film Pre-Production

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