Contractuals & Other Matters
This chapter outlines the important legal and financial issues that come with producing a show. The following sections cover areas that require the filmmaker to enter into contracts. The purpose of the insurance discussion is to simplify the subject for many readers who might find it intimidating. The legal section explains how having a lawyer, though it may be expensive, may save money in the end. Publicity is also discussed in terms of the importance of getting good stills that can be used to help present and sell the film. The completion bond, a lengthy agreement, is broken down and explained.
INSURANCE
There are a couple of different kinds of insurance that are necessary on a project. These include errors and omissions and a traditional production package. You purchase this insurance from insurance companies that specialize in entertainment insurance. When you apply for insurance, the insurer will want to know what your experience is, if you have had insurance before, and if there were any previous losses. The insurer will also want you to outline any stunts or use of animals, vehicles, explosives, or fire.
Errors and Omissions
Errors and omissions is a type of insurance that covers the production if anyone tries to sue you. The intention of errors and omissions is to cover only cases in which you inadvertently infringed on someone’s copyright or committed slander, invasion of privacy, plagiarism, unfair competition, or defamation (see “Glossary” for full definitions of these terms). If there is willful infringement, the insurance may not cover legal costs. For instance, if someone claims that you stole a story idea, he or she could attempt to sue you. This type of insurance helps pay legal costs to resolve the matter.
Production Package
Production package insurance is a type of insurance policy that is specifically written for projects in the entertainment industry. This package typically contains four different kinds of insurance: cast, negative, third party, and faulty stock. Each policy for a production will differ depending on who or what is being insured. For instance, shooting at a person’s house that may have expensive furniture or artwork might require higher liability coverage on the policy.
Cast
Cast insurance covers costs incurred if for some reason a cast member is injured or killed on set or in post-production. These costs could go for reshooting or using CGI to cover the scenes that the actor had yet to shoot. The decision to reshoot or use CGI is usually based on how much of the actor’s scenes have been completed. If only one or two scenes were left, the producer may decide to rewrite the scenes, omit them, or use CGI.
Equipment
Equipment insurance covers any rented or owned equipment such as the camera, grip or electric equipment, etc.
Negative
Negative insurance covers your film negative (if there is one). If your negative is somehow lost or destroyed, insurance would cover the cost of replacing this negative. This translates into the amount it would cost to reshoot those scenes. Negative coverage also includes items related to your negative, such as audio disks, tapes, or DVDs. Recently, negative insurance has also been expanded to include the loss or damage of most formats.
Third Party
Third-party insurance covers items that are rented or borrowed from a third party. For instance, if you were to rent an expensive fur coat for a scene, and someone spills a bucket of paint on it, then this insurance covers the cost of replacing the coat.
Faulty Stock
Faulty stock insurance covers the cost of replacing and reshooting scenes from any film or tape stock that may become lost or damaged. Damage to film stock includes that which occurs if the film is fogged or ruined by a camera and any damage that may occur at a lab.
Auto
Production insurance for vehicles will cover nonowned, or rented, vehicles. These vehicles could be picture cars or production vehicles.
Money and Securities
Money and securities protection covers any losses to a production’s money and securities during the course of the production.
Extra Expense
The miscellaneous category in insurance would cover a few items common to all productions as well as items specific to your production. Common items include any loss or damage to props, sets, wardrobe, instruments, or owned or rented equipment. Items specific to your production may be added in this column. For instance, let’s say your script calls for a scene where a herd of horses is used. You might add to your policy animal mortality insurance, which would cover the loss or injury of the horses.
WORKERS’ COMPENSATION
Workers’ compensation is a contractual that you pay to cover any cast or crew who may become injured or ill during your shoot. This insurance pays for medical, disability, death, and lost wage benefits. Workers’ compensation will also cover benefits for dependents if a person is killed while working. Some states require that you purchase workers’ compensation insurance from their state insurance program. Currently these states include Nevada, North Dakota, Ohio, Washington, West Virginia, and Wyoming. Others do not, but all states require some type of workers’ compensation. This applies to all employees, even independent contractors, unless they provide proof that they carry their own workers’ compensation.
COMPLETION BOND
A completion bond, also known as a completion guarantee, is a kind of insurance that guarantees investors that, should a production go over budget or fall to pieces, either they will get their money back or the film will be completed. Most investors or banks would not even consider giving money to a venture without a completion bond. When you procure a completion bond, you are also agreeing that the bond can monitor the production. This means that the bond company will receive copies of the call sheets, production reports, and weekly cost reports from your accounting department. A representative from the completion bond company (most are located in California) will review them closely, looking for any indications that the film is in trouble. One indication may be that too much film is being shot or that too many hours are being accrued by the crew. If your project looks like it may go over budget, you can seek additional financing from your investors. However, the bond company must consent to this extra funding.
The process for getting a completion bond is as follows:
1. You send a script, shooting schedule, and budget to the bond company. It is important that your budget have a 10 percent contingency. Most bond companies will not insure a project without this.
2. The bond company meets with the producer and/or director. At this meeting, the bond company will want to see acquisition documents. These documents include the rights to the story (if applicable) and the script. The bond company may also request that additional personnel attend this meeting, such as the art director or production accountant.
3. If the bond company deems the project feasible, it sends a letter of intent to guarantee the film, subject to availability of financing and personnel. This letter of intent can then be used to secure financing.
4. Once financing is secured, the producer and bond company sign a completion bond agreement, provided by the bond company. The completion bond company will also sign a completion guaranty with the financer. At this point, the completion bond company is paid a fee, which is usually a percentage of the budget minus the contingency.
It is important to understand what a completion bond will cover, and what it won’t cover. A completion bond generally will not cover or insure the following:
■ The cost of the MPAA seal
■ The quality of picture
■ Any defects in copyright
■ Overbudget costs due to currency fluctuations
■ Costs not covered in the budget
■ Distribution expenses
■ Additional shots for a television version
■ Anything after delivery of the film
The delivery of the final film is based on specifications set out in the completion bond agreement. These specifications include, but are not limited to, the following:
■ The film must be produced in accordance with the budget and production schedule. This does not include minor changes to the production schedule. Rather, this refers to major changes in the time frame of shooting the picture.
■ The film is based on the screenplay.
■ The film qualifies for an MPAA rating.
■ The final film has the agreed-upon length, including titles.
■ The final film is in the agreed-upon format, such as 35mm.
■ The film must be first-class quality.
■ The film must have had the agreed-upon cast in certain roles, as well as the expected producer and director.
THE LEGAL DEPARTMENT
One of the first and most important people for you to employ is a lawyer. It is especially important to hire an entertainment lawyer, because this type of attorney will be familiar with the various kinds of contracts that are used on a production. Entertainment lawyers are also well versed in copyright laws, which will help you if you are shooting a project that is not originally yours, as well as when it comes to adding music to your picture.
Why You Should Get a Lawyer
You should get a lawyer for a couple of reasons. First, let’s say you do find an investor who is willing to give you money for your project. The next step is to sign an agreement between you and the investor. Do you know what kind of agreement needs to be signed? You could find a standard contract in a book and use that. Do you understand every clause in the contract? The lawyer is there to ensure that your interests are guarded, to make sure you aren’t “taken to the cleaners.”
Furthermore, some investors would prefer to work with someone who has a lawyer. Investors like to know when they are funding a project that they are dealing with someone who fully understands the laws and contracts in this situation.
Getting the Right Lawyer
Getting the right lawyer is crucial to the smooth running of any of your negotiations. Many lawyers will know the law. Many lawyers will know contracts. It is important that you find the lawyer that also suits you and your project personally. Some lawyers will charge you to sit down and talk with them first; they call this a consultation fee. Other lawyers may not charge you a fee until you agree to do work with them. If you are hiring a lawyer for the first time, make sure you hire one who is willing to work with someone with little or no experience. Your relationship with your lawyer should be based on respect and trust. At first, you want to find a lawyer who will not mind walking you through some of the contracts so you can understand them. While you should him or her never completely entrust all decisions to your lawyer, you should be able to trust him or her enough for what you do not know.
CLEARANCES
A clearance is legal permission to use an item that appears in your project. If you are using copyrighted music, you will need permission to use, or license, that music. If you plan to show some brand-name soda in a scene, you may need clearance from the soda company. Any product that has a brand name, including wardrobe labels, food, beverages, cigarettes, and cigars, may require clearance if it is clearly visible and identifiable in the frame. However, in most cases, as long as the product is being used for its intended use, you may not need to contact the company. However, even if the product is being used for its intended use, the company may not appreciate being in the type of film you are making and have concerns about the image of the company being shown in your film. If you are not sure, check with your lawyer or representative.
Clearances may be handled by a studio representative whose job is to find possible clearance problems in a script, bring them to the attention of the director and producer, and either obtain clearance or suggest their removal from the script. If there is no studio representative, a script clearance company could compile clearance reports. These reports point out possible problems. Some of these companies will also work to obtain any permissions needed. Other items that may require clearance include the following:
■ Stock footage.
■ News footage.
■ Film clips.
■ Television clips.
■ Excerpts from published written works.
■ Portrayal of well-known celebrities or politicians.
■ Names of characters, businesses, products, artwork, and state and government officers.
■ Derogatory references in dialogue. A derogatory reference could be a character referring to an actual, known person as racist or a pedophile, something that would be injurious to this person’s reputation.
■ Inaccurate factual statements. These statements not only may be inaccurate but also could qualify as defamation. For instance, a character could say that a known company knowingly manufactures products that are addictive, deceiving the public. If that statement is untrue, the production company could be sued for slander.
■ Statements that might constitute invasion of privacy, libel, trademark, or copyright infringement.
■ Telephone numbers. Most productions use the typical “555” prefix, with the rest of the number being above 4000, which is not used by any telephone company.
RELEASES
Releases are agreements between you and another party, in which the party agrees to let you photograph or record him or her (see Figure 19.1 for an example). Releases are typically necessary for actors, animals, or stunt people, those that are seen on the screen. If photographs of a person are used, releases are also necessary for the people in the photograph. Other releases are needed for locations (see Chapter 15 for an example). In higher budget shoots, a production will post a notice if they are shooting in an area where a crowd will be used. The notice states that, by being in the area, the people are granting the production the right to photograph them. Thus, no individual releases are needed. If, however, a large number of extras are employed to work as background, then individual releases are obtained for each person.
In low budget, where hiring extras is a luxury not many can afford, some projects will use their crew and anyone they can grab for background. Many low-budget deal memos contain a release in them so that the crew member can be placed at any time in front of the camera. If the production is grabbing people for the background on the spot, release must be obtained, but only for those people who are recognizable. A person walking far in the background, where you cannot make out his or her face, would not need a release.
RELEASE
AUTHORIZATION TO REPRODUCE PHYSICAL LIKENESS
For good and valuable consideration, the receipt of which from Joe the Actor is knowledged. I hereby expressly grant to said Frame Right Films, Inc. for “Regina of Icelandia” and its employees, agents, and assigns, the right to photograph me and use my picture, silhouette and other reproductions of my physical likeness (as the same may appear in any still camera photograph and/or motion picture film), in and in connection with the exhibition, theatrically, on television or otherwise, of any motion pictures in which the same may be used or incorporated, and also in the advertising, exploiting and/or publicizing of any such motion picture, but not limited to television or theatrical motion pictures. I further give the said company the right to reproduce in any manner whatsoever any recordations made by said company of my voice and all instrumental, musical or other sound effects produced by me.
I hereby certify and represent that I have read the foregoing and fully understand the meaning and effect thereof and, intending to be legally bound, I have hereunto set my hand this 22 day of June 20 02.
SIGNATURE________________________________________
ADDRESS AND TELEPHONE________________________________________
_________________________________________________________________
WITNESS:
FIGURE 19.1
Example Release Form.
CONTRACTS FOR CAST, CREW, AND SERVICES
The basic contract for a crew member is called a deal memo. This deal memo is an agreement that states that you hire the crew member for a specified amount of time and for a certain rate. There are other clauses as well. See Figure 19.2 for an example.
Other contracts include agreements for equipment and services. An equipment agreement (see Figure 19.3) states the items to be rented, how long they are to be rented, and at what cost. This kind of agreement may be contracted with a company or an individual who may own certain equipment. An Intern Release is shown in Figure 19.4.
PUBLICITY
While the process of production is highly creative, it is also part of a business. While there is a place for film to be art for and of itself, most often the art is meant to be seen, and if it is to be seen, people have to know about it. There will be advertising eventually, but in the meantime, to take the most advantage of the time you are shooting, a publicist is hired to create and handle all publicity. Unit publicists are most often seen only on medium- to high-budget productions, but it is important to know and understand their function.
Daily Crew Deal Memo
In accordance with the Immigration Reform and Control Act of 1986, any offer of employment is conditioned on satisfactory proof of applicant’s identity and legal ability to work in the United States (I-9 form attached).
Employment hereunder is of an “at will” nature and subject to termination without notice by either party. While employed hereunder, Employee’s services shall be on an exclusive basis to Frame Right Films, Inc. (Employer).
1) Services are for a minimum period of one day. There is no other guarantee of the period of services unless otherwise specified.
2) All purchases and rentals must be by cash or Purchase Orders. Procedures governing purchase orders, petty cash expenses, and inventory of purchases are subject to approval by the Producer.
3) Petty cash expenses not accompanied by receipts will not be reimbursed. There will be no reimbursement of any cellular phone charges without prior approval.
4) Employee is responsible for all recoverable items purchased. These must be reconciled with accounting during the last week of principal photography. All recoverables will be collected at wrap.
5) No sixth or seventh day or Holiday work will be paid unless authorized in advance by the Unit Production Manager. Only the Unit Production Manager may authorize overtime work.
6) All employees agree to submit an invoice for services on completion of principal photography. Employee agrees to be paid within 30 days of employment.
7) Employee hereby expressly authorizes the company to deduct any unsettled hotel incidentals incurred by the Employee or any unreconciled petty cash advances from the Employee’s paycheck.
8) The production office may help you with certain personal arrangements, (e.g. personal travel or shipping), but any service will have to have payment arrangements made in advance by check or credit card.
9) Transportation to and from distant location will be provided by Company. Employee is not to drive to a distant location unless approved by Company.
10) The services hereunder are subject to the applicable terms of such collective bargaining agreement, if any, which by its terms are controlling with respect to the services hereunder.
11) Employer reserves the right to discharge Employee at any time, subject only to the obligation to pay the balance of any earned and accrued compensation due. This agreement is subject to termination in the case of any suspension or postponement of production because of labor controversy, strike (or threat thereof), act of God, or any other customary “force majeure” reason.
12) Employer shall own all rights in and to the results and proceeds of Employee services on and in connection with the picture as a “work made for hire.”
13) Employer may assign, transfer, license, delegate and/or grant all or any part of its rights, privileges and property hereunder to any person or entity. This agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. Employee hereunder may not assign this Agreement and Employee’s rights and obligation.
14) Unless subject to any other applicable written agreement, screen credit is at the producing company’s sole discretion. If credit is granted, the name should read Sandra Buttons.
15) The Employee understands that there is an injury and Illness Prevention Program in place on the production and confirms that he/she has read and understands the Safety guidelines for Production. Any Employee found in violation of a safety rule or guideline may be subject to disciplinary action, up to and including termination of employment.
Accepted and agreed to:_________________________ Date ___________________
(Employee)
Approved by:______________________________________ Date ____________________________
(Unit Production Manager/Producer)
_______________________________________________________________________________________
Box/Equipment Rental Addendum
The following equipment (itemized list attached) will be rented from the undersigned employee for the amount of $________/day.
Rental (circle one) is / is not paid for preparation time.
Agreed to by:___________________________________________ Date _________________
(Employee)
Approved by: ____________________________________ Date _____________
(Unit Production Manager/Producer)
____________________________________________________________________________________________
Product Placement Addendum
The undersigned represents, warrants, and agrees the undersigned will not enter (and/or authorize the entering of) any agreement with respect to any placement of products for on-screen exposure of any such product, item, and/or logo in connection with the picture, it being understood and agreed that any such agreement or arrangement shall be solely made by Employer and/or Production Resources department of Employer and/or the Distributor of the picture unless otherwise specifically requested and authorized in writing by such Production Resources Department.
Agreed to by: ______________________________________ Date ____________
(Employee)
Approved by: ______________________________________ Date ____________
(Unit Production Manager/Producer)
FIGURE 19.2
Daily Crew Deal Memo.
The unit Publicist
The unit publicist is a person who handles all publicity for a show. He or she may be hired by a studio or production company and usually has contacts with industry press such as trade publications and entertainment broadcast shows. The unit publicist answers to the production executive of a studio or the production company owner. The unit publicist is the point person for all publicity associated with a show. The unit publicist’s general duties are as follows:
■ Works with the studio or production company to decide what to publicize. Each show is different. A show might decide it is more advantageous to push the star of a show or may decide to publicize the latest special effects that will be used on a show.
■ Sets up interviews with the producer, director, and stars with print and broadcast.
■ Sends stories about the project to print and broadcast.
■ May be needed to handle bad publicity situations.
■ Oversees the still photographer to make sure the proper stills are being taken and are of good quality.
■ Coordinates press day.
The Still Photographer
The still photographer works on set to capture stills that will represent the project visually. The still photographer comes to set each day to shoot. He or she has read the script and has reviewed it with the unit publicist. The publicist guides the photographer in what scenes might be better for shooting. The photographer usually comes to set at the shooting call, after all preparations for the first scene have been made. In low-budget projects, the photographer shoots the rehearsals. This is because he or she doesn’t want the click of the camera shutter to interrupt actors or get on the sound track. What some photographers also do in this case is time the shot either right before the director calls action or right after the director calls cut. Some photographers in high budget have special cameras with silent shutters and can proceed to shoot during a scene. At the end of the day, the photographer delivers the rolls of film to the unit publicist. Many photographers today are shooting digitally and will download the pictures at the end of the day and give them to the publicist on a CD or thumb drive.
EQUIPMENT RENTAL AGREEMENT
| Frame Right Films, Inc. | “Regina of Icelandia” | 6/23/02 |
| Production Company | Production Title/No. | Date |
| Acme Grip and Lighting | ||
| Renting Company | ||
| 9790 Garner Lane, Dallas, TX 87992 | 469-123-4567 | |
| Company Address | Phone No. | |
| Todd Hioupee | ||
| Employee Name | ||
| 1898 Tree St., Florence, TX 89279 | ||
| Employee Address | ||
| Sound Mixer | 89078097890 | |
| Position | S.S. No./Employer I.D. No. |
EQUIPMENT
20 Walkie-Talkies, 20 chargers
I, Todd Hioupee warrant that I am the owner of the above described equipment and that I have the right and/or authority to rent or lease same to Frame Right Films, Inc. and/or the Producer, Production entitled “Regina of Icelandia.”
Daily Rate or Weekly Rate or Flat Rate of $2600.00 beginning on 6/30/02 delivered to 162 Rajlim St., Bend, GA premises on 7/22/02 (Date).
I understand and agree that Frame Right Films, Inc. and/or the Producer shall have full responsibility and liability for the safekeeping of the equipment, and they shall be responsible or liable for the replacement of the equipment or any part thereof.
| _______________________________ | _______________________________ |
| Renter’s Signature | Producer |
FIGURE 19.3
Equipment Rental Agreement.
INTERN RELEASE
Ladies and Gentlemen:
In consideration for Frame Right Films, Inc.’s utilizing the services of the undersigned, while rendering any services hereunder, the undersigned agrees that in the event of any injuries sustained during the course of such services, the undersigned will look solely to Frame Right Films, Inc.’s Workers’ Compensation insurance. Frame Right Films, Inc., hereby agrees to provide Workers’ Compensation insurance to cover injuries that the undersigned may sustain while rendering services hereunder.
Very truly yours,
Frame Right Films, Inc.
By: _______________________________________________________________________
(Producer)
AGREED & ACCEPTED:
_____________________________________________________________________________
(Intern)
Following is a guideline for what to have your photographer shoot on set:
■ Director “directing” actors.
■ Director next to the camera, “working.”
■ Camera operator with his or her eye to the lens.
■ Sound mixer, with a good view of the DAT or other recorder.
■ Medium to wide shot with the camera and operator, boom, actors, and director watching.
What Not to Shoot
■ Crew members smiling at the camera (these are useless).
■ Crew members doing anything but working.
Shooting the Action
■ Get as close to the film camera as possible and try to replicate what the camera shoots. Shoot only rehearsals unless the shot is MOS. Sometimes good shots can also be taken immediately before “action” and after “cut.”
■ Try to catch emotional moments between the characters or shots that showcase the emotional state of the character.
■ Try to catch action shots, if applicable.
■ Think about what might be a good shot for the film poster or DVD cover, or a shot that tells what the story is about (without giving away too much).
PRESS DAY
Press day is a day during your shoot when you invite print and broadcast press to your set. You should pick the most exciting day of shooting. That way, the press gets good footage or stills for their publications or broadcast. The unit publicist coordinates who will come and helps them secure lodging. Before press day, the publicist arranges a schedule for the press to have sit-down interviews (some on camera) with the producer, director, and lead actors. The publicist also coordinates with the 1st AD to schedule these interviews so as not to interrupt shooting. On press day the unit publicist notifies all press of what will be happening and when their interviews are scheduled. The publicist also works with the 1st AD to find a location for any on-camera interviews. The idea is for the interviewee to be available yet not too far from the set. Usually the interview location is arranged so that the crew or a set can be seen in the background.
SUMMARY
Every production from low to high budget should have insurance. This insurance guarantees compensation for the loss or damage to equipment, stock, props, wardrobe, and sets. In addition, some cast must be insured in case of loss, injury, or illness. Another type of insurance is the completion bond. This bond guarantees an investor that an independent entity will either finish a troubled project or return that person’s investment. There are many contracts associated with a show, so it is wise to retain the services of a good lawyer. Finally, hiring a unit publicist ensures that your production will receive proper exposure to the industry.