Filmmakers and writers often let the contract and business details be a second – or third or forth priority, which is unfortunate. Neglecting contracts and business formalities may prevent getting investors into a movie, or may cause a host of other problems that mean a film cannot get interest or distribution.
What follows is a brief list of “what and why” film and writing business details that must be done, from the outset, to minimize obstacles to a film or project’s success.
- Form a Production Company through which the film must be made. Why? A host of reasons. First, that will be the legal entity into which development/investment money is deposited. Why not take money/investments personally? Because of the second primary reason – liability. Liability in film development and production can come from multiple angles – from the U.S. Securities and Exchange Commission for taking investments without the proper paperwork (a “prospectus” or “private placement memorandum” – VERY different from a “business plan”), from an accident to the cast or crew on set, or to a bystander not part of the cast or crew (think a lighting element falling onto a passerby), or to the production “losing” funds needed to pay cast and crew.
This “parade of horribles” isn’t fiction – it happens all the time. And if it happens without the legal protection of an LLC or similar legally separate production company, the legal liability will likely fall personally onto the producers and those heading up the project, and potentially onto the investors personally – meaning that personal assets will be responsible for whatever harm or legal claims.
The third reason is that the legal entity will be the “person” (a legal “person” under the law) that contracts with all those involved in the film – from the producer(s), directors, cast and crew, transportation, catering, etc. If anything goes sideways with these contracts, it is the legal person that is held accountable instead of the actual persons heading up and investing in the project.
- Contract with the writer(s) and/or legal acquisition of the script or story through a literary acquisition agreement (a/k/a an “option/purchase” agreement). Failure to do this means that the production does not have formal rights to the intellectual property it is making – meaning the writer/creator may have the ability to withdraw his material and prevent the production from doing anything commercial with footage already shot. So it is critical that this be accomplished before any production – or even development – takes place.
- Production contracts. Like it or not, a film – or a script written on spec – is a business. A writer makes a product (the script or story), or many people come together to make a product (the film), which hopefully will be sold in one form or another, resulting in a financial return that will make everyone involved happy. Perhaps that happiness will be manifest in the ability to eat higher quality raman noodles; or perhaps the ability to make another film – or obtain a return on investment – or result in children being fed and college funds being strengthened.
But a script or film is a business, and as such there are contracts that must be used in the making of the product. What contracts depend on the activity (writing versus filmmaking), budget and the type of production (feature versus documentary, for example). But the principal is the same – contracts that clearly state who owns what, who has rights to what, profit/interest divisions, etc.
Essentially the who, what, when, where, why (perhaps) and how much regarding the business transactions involved. These may include: the script/story option purchase agreement, cast and crew agreements, talent/interviewee release agreements, name and likeness releases, licensing agreements for use of the intellectual property of others (music, photographs, products, film or video clips (no – YouTube does not mean it’s in the public domain)), location agreements, craft services contracts, transportation agreements, insurance (workers comp, liability, errors and omissions, defamation protection), sponsorship and product placement agreements, distribution (foreign and domestic) agreements, appropriate trademark registrations, and the list goes on and on and on.
Failure to use appropriate contracts and follow reasonable business procedures will put the whole project in danger.
Kafee: “Mortal danger?” Col. Jessep: “Is there another kind?”
Keep your project out of danger – focus on the appropriate contracts and business formalities from the outset. Thereby clearing the way for your project to get sold and/or distributed.
The higher quality raman is truly worth it.
If I may be of assistance in advancing your business or entertainment project, please contact me at your convenience.
- Book Review: The ABA’s Legal Guide to Independent Filmmaking by Michael C. Donaldson and Lisa A. Callif (blogcritics.org)
- Film Promotion Tips: How to Promote My Short Film? (brighthub.com)