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Legal Issues in Pre-Production Donald R. Simon, J.D./LL.M., Adjunct Faculty
Legal Issues in Pre-Production LLCs Contracts Permits Releases Production insurance Items to begin in Pre-production
How Much Do You Need to Know? To protect themselves and their projects from lawsuits and other legal entanglements, media producers need to be familiar with key areas of the law. GOOD NEWS: Media producers do not need to be lawyers! Legal Issues in Pre-Production
But do need to anticipate and identify the many potential legal issues that can come up during a production and recognize when to call a lawyer. Legal Issues in Pre-Production How Much Do You Need to Know?
Media Producers Should Know: For example: When parties should put agreements in writing. When permits, permissions, and releases are required during the course of a production. What steps are necessary to add music to a production. Legal Issues in Pre-Production
Limited Liability Company Legal Issues in Pre-Production
Legal Issues in Pre-Production Limited Liability Company: Combines the best elements of sole proprietorships, partnerships, and corporations. The primary advantage of an LLC is that its owners have “limited liability,” meaning that, under most circumstances, they are not personally liable for the debts and liabilities of the LLC.
Legal Issues in Pre-Production Limited Liability Company: Owners are called “members.” “Pass-through” taxation: profits and losses pass through to its owners, who report them on their personal tax returns. Few corporate formalities.
Legal Issues in Pre-Production Limited Liability Company: Creation: File “Articles of Organization” with the Secretary of State. Operating Agreement: governs the inner-workings of your LLC. Annual filings with the Secretary of State.
Legal Issues in Pre-Production Limited Liability Company: Creation: Get a Tax I.D. from the IRS Open a biz checking account.
Legal Issues in Pre-Production Limited Liability Company: What will the LLC do? Be a party to all production contracts and insurance agreements Acquire story rights (with written contracts) Hire the cast and crew (with written contracts) Rent equipment Be the named party in the event of a lawsuit
Contracts Legal Issues in Pre-Production
Contracts: Like any biz, the biz of media production involves managing working relationships. Legal Issues in Pre-Production
Contracts: Producer manages relationships with: Talent; Unions and guilds; Writer; Production and post-production personnel; Client who commission the work; and Various subcontractors and suppliers. Legal Issues in Pre-Production
Contracts: In an ideal world, all production relationships would be based solely on handshakes and trust. Unfortunately, the world of production is rarely ideal. Experienced producers usually will seek formal, contractual assurance the promised services will be completed. Legal Issues in Pre-Production
Contracts: Although they cannot guarantee the success, production contracts can do the following: Specify the responsibilities of various parties; Designate delivery dates for services; Delineate compensation for various parties; and Provide for what happens in the event of a dispute. Legal Issues in Pre-Production
Contracts: A contract is an agreement that creates obligations between 2 or more parties. In addition, once the contract is placed in writing and signed by the parties, it serves as proof of those obligations. Legal Issues in Pre-Production
Contracts: This is why, even though oral contracts are considered valid in many circumstances, all media production contracts should be placed in writing. In the event of a dispute, the written contract provides immediate proof of the terms to which they agreed. Legal Issues in Pre-Production
Contracts: Common contract terms: Names of the parties (one will be your LLC) Detailed description of work to be performed Fee and payment schedule Term and termination Freelance / work-for-hire Dispute resolution Legal Issues in Pre-Production
Contracts: Do not have to be long and intimidating. Instead, they should be written in terms both parties can understand. Legal Issues in Pre-Production
Contracts: Should be clear and specific. Vague language leads to misunderstandings, disputes, and lawsuits. Use simple language that accurately expresses the deal. Legal Issues in Pre-Production
Contracts: Depending on how complicated the matter, you don’t necessarily need a lawyer. There are a number of good form books that media producers can use to help draft standard contracts. Legal Issues in Pre-Production
Contracts: Most forms are simply a starting place and need to be revised to reflect your particular transaction. All “deal terms” should be included. If a provision is important, get it in the contract! Legal Issues in Pre-Production
Contracts: Bring in a lawyer when: You’re being asked to sign something you do not fully understand; You’re being asked to sign something that commits you or your company to a long-term obligation; or You’re negotiating a deal that is vital to the success or survival of your company. Legal Issues in Pre-Production
Releases Legal Issues in Pre-Production
Legal Issues in Pre-Production Releases: As a rule, producers should secure written releases from all performers who appear in the production. Typical releases: Performer / Model Audience Location
Releases: The only exception would be those individuals who appear as faceless forms in crowd scenes or remote shots. Just make sure these individuals truly do appear in a form that would not be recognizable to family, friends, or a judge or jury. Legal Issues in Pre-Production
Releases: For professional actors, the release language is usually included in a complete contract that covers all aspects of their appearance in the production. Legal Issues in Pre-Production
Releases: Make the performers understand the terms of the release before they sign it. If a performer prefers not to sign or demands extensive changes, find someone else to fill that role. Legal Issues in Pre-Production
Releases: Once all the performer releases are signed, store them in a secure, preferably fireproof, location. You should also keep additional copies of the releases in a separate secure location. Legal Issues in Pre-Production
Releases: Some productions, particularly recordings of live presentations or performances, feature shots of audience members. Ideally, each audience member should execute a written audience release. Legal Issues in Pre-Production
Releases: When logistics prevent this, you should post a notice prominently at all entrances to the production location. Legal Issues in Pre-Production
Releases: If you plan to conduct a shoot in a private area, such as a person’s home, be sure to obtain a location release. Along with protecting you from charges of trespassing, location releases serve as contracts that define the terms under which you will be allowed to occupy the property. Legal Issues in Pre-Production
Permits Legal Issues in Pre-Production
Permits: Many states and municipalities require permits for location work, particularly for work will be performed on public thoroughfares or government property. Fees vary depending on where you will be shooting and your need to involve the police department, fire department, or other service agencies. Legal Issues in Pre-Production
Permits: Begin by contacting the film and TV office where you will be doing your location work. Legal Issues in Pre-Production
Permits: The agency will be able to tell you what permits you must complete. They also offer resources such as a crew database and information on production insurance, and tax credits. Legal Issues in Pre-Production
Permits: If you are caught shooting without the proper permits, the penalties can be severe. At a minimum, you will be forced to suspend production until the proper permits are in place. Idle crew and equipment could be costly! Legal Issues in Pre-Production
Permits: You may be also subjected to substantial fines. For some severe violations, particularly unauthorized use of pyrotechnics, the sanctions can include criminal penalties. Legal Issues in Pre-Production
Insurance Legal Issues in Pre-Production
Insurance: Production Insurance: A special type of insurance that protects a company against many accidents, mishaps, and acts of nature that can cause problems during a media production. Most major film and TV producers protect their investments through the purchase of production insurance. Legal Issues in Pre-Production
Insurance: Production Insurance: Usually costs 3-to-5% of the total production budget. Exact cost determined by risk factors: E.g., extensive location work, pyrotechnics, stunt work, etc. Legal Issues in Pre-Production
Insurance: Production Insurance Coverage: Cast Bad weather Equipment Property damage Auto Comprehensive general liability Legal Issues in Pre-Production
Insurance: Errors and Omissions (E&O): Protects producers from lawsuits that may arise from the content of a production, including: Copyright and trademark infringement; Libel or slander (including trade libel); and Invasion of privacy. Legal Issues in Pre-Production
Begin in Pre-Production Phase Legal Issues in Pre-Production
Begin in Pre-Production Phase: Music Clearance: Takes a long time and can cost a lot of $$$ Need a “synchronization license” from the songwriter or music publisher; AND Need a “master use license” from the recording company (if using a pre-existing recording) Legal Issues in Pre-Production
Begin in Pre-Production Phase: Stock footage and image clearance Logo clearance: Use of beer signs in bar scenes, for example, must be cleared with their respective trademark owners Legal Issues in Pre-Production
Begin in Pre-Production Phase: Negotiations with potential distributors Follow-up on production tax incentives with state and local authorities Seek out post-production crew Editors, clearance assistants, composers, etc. Legal Issues in Pre-Production
Checklist Legal Issues in Pre-Production
Checklist: Form an LLC, get a tax ID, and set up a business checking account Prepare a database of legal agreements to use including various releases See what permits are required (if any) in your city and/or state Legal Issues in Pre-Production
Checklist: Get production and E&O insurance policies that fit your situation Begin the music, logo, and image clearance processes Consult with a lawyer and an accountant for legal and tax issues Legal Issues in Pre-Production
For Further Reading: Legal Issues in Pre-Production
For Further Reading: Legal Issues in Pre-Production
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Legal Issues in Pre-Production Thank You!