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The Real Deal in Reality TV


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"The Real Deal in Reality TV" is a presentation delivered on March 11, 2015 at the Artist Resource Center, North Hollywood. It describes the legal and business issues faced in negotiating talent and production agreements in reality TV production.

Published in: Law

The Real Deal in Reality TV

  1. 1. The Real Deal in Reality Television A review of talent and production agreements encountered in producing a reality television series Presented by: Segun Aluko, Esq. Attorney at Law
  2. 2. Bio Admitted in Nigeria and California Been practicing law since 2009 Practices include: corporate and securities, media and entertainment, copyright, trademark and internet technology transactions E: P: (626) 354-3791 W: 1WWW.SEGUNALUKO.COM
  3. 3. What is Reality TV? Wikipedia defines “Reality TV” as a genre of TV programming that documents unscripted situations and actual occurrences and often features a previously unknown cast. The move from original programming to reality TV might have best been captured by Sociologist Margaret Mead: “… to engage the audience, this genre (reality TV) moves from observation to storytelling in a way traditional documentaries have not”. 2WWW.SEGUNALUKO.COM
  4. 4. Reality TV through the years  The 1940’s Allen Funt’s Candid Camera credited as Reality TV’s first practitioner;  Versions of Candid Camera can be found these days with America’s Funniest Home Videos, MTV’s Punk’d and The Man’s Show on Comedy Central;  PBS’ 1970’s An American Family – – showed a traditional American family going through stress of a divorce and coming out of their gay son; – It received shocking response from the audience. – Revolutionized the Reality TV industry. 3WWW.SEGUNALUKO.COM
  5. 5. Classification of Reality TV  Many classifications exist. – Murray & Quellette (2009) proposed 8 sub-genres namely:  Gamedocs (Deal or No Deal, WWTBAM);  Dating programs (Bachelor/Bachelorette);  Makeover programs (Extreme Makeovers, HGTV’s Love It or List It);  Docu-soaps (Real Housewives Franchise);  Talent contests (American Idol, NBC’s The Voice);  Court programs (Judge Judy);  Reality sitcoms and  celebrity variations of other programs. 4WWW.SEGUNALUKO.COM
  6. 6. Why Reality TV?  Cheap production budget; – average production cost may be less than $500k/ an hour episode.  Smaller crew;  Fewer paid performers;  Fewer sets;  Ability of Network to cost-average down the price of programming across entire primetime schedule;  Reality TV producers can also sell their series as tent-pole series in their own right. 5WWW.SEGUNALUKO.COM
  7. 7. Agreements for Reality TV  The fact that reality shows are referred to as “unscripted” and professional actors are not being utilized (except as hosts in some cases) does not mean that there will be fewer agreements to negotiate.  In fact, some of those types of programming raise a gamut of legal concerns and involve numerous contracts.  Issues include: privacy/right of publicity, defamation, intellectual property, contractual/regulatory issues, clearance, etc. 6WWW.SEGUNALUKO.COM
  8. 8. Types of Agreement for Reality TV  Host Agreements (e.g. Ryan Seacrest on American Idol);  Judge Agreements (e.g. Blake Shelton and Adam Levine on The Voice);  Contestant/Participant Agreements ;  Depiction Releases/Appearance Waivers;  Talent Services Agreements (other participants appearing as experts on the show); – Show Creator Agreements; – Writer Agreements (Guild Applicability?) 7WWW.SEGUNALUKO.COM
  9. 9. Agreements for Reality TV: Our Focus  Talent Agreements – Agreement between the reality TV talent (unknown person, TV personality or professional actor engaged in Reality TV), on one hand, and the producer (production company/ TV network), on the other.  Production Agreements – A joint venture or partnership between a producer and financier/ right- holder/distributor to form a Special Purpose Entity (SPE) to acquire the rights; – SPE then engages producer to provide production services; or – Network or Production Company engages a Producer to provide production services for Reality program. 8WWW.SEGUNALUKO.COM
  10. 10. On-Screen Reality TV Talent Agreements  Conditions Precedent – Fully-executed copy of the Agreement; – All documents required by any governmental agency or otherwise required for Artist to render services  In case of US alien, visa and work permit. – All forms and documents necessary to enable Producer to pay Artist; – All forms and documents necessary to seek approval of Agreement (in the case of minors); – Parental Inducement (minors); etc. 9WWW.SEGUNALUKO.COM
  11. 11. On-Screen Talent Agreements (cont’d)  Term – Development Term  Usually from date of agreement to three (3) months after date of satisfaction of Conditions Precedent;  Development of pilot or presentation to Network;  Artist’s service is exclusive and may be extended if show is picked up. – Production Term • Starts after development and continues for 18 months; • Producer has exclusive and irrevocable option to engage Artist to render services (“Option”) for consecutive seasons and/or series; • Exercise of series option extends production term by one additional year 10WWW.SEGUNALUKO.COM
  12. 12. On-Screen Talent Agreements (cont’d)  Services – Exclusive on-camera talent, voice-over and other services. – As are customarily performed by on-camera television hosts/participants of “reality” TV programs; – Include: pickups, publicity, retakes and travel as required by Producer; – All artistic and other decisions in connection with Artist’s services as well as production and exploitation of result of Artist’s services (Pilot/Series) to be determined by Producer in its sole discretion; – Artist’s obligation to comply with Producer’s directives and Producer’s right to exploit Artist’s services in all media. 11WWW.SEGUNALUKO.COM
  13. 13. On-Screen Talent Agreements (cont’d)  Compensation – Compensation are fixed  Presentation Fee (if Network orders presentation of the show);  Network Pilot Fee (if Network orders Pilot and initially broadcasts same);  Non-network Pilot Fee (if non-network TV orders pilot and initially broadcasts same);  Network Episodic Fee (if network orders episode and initially broadcasts same);  Non-Network Episodic Fee (if non-network TV orders episode and initially broadcasts same);  Subsequent Season Fee Increase (applicable to episodic fees only regarding additional series option). 12WWW.SEGUNALUKO.COM
  14. 14. On-Screen Talent Agreements (cont’d)  Subsequent Season Fee Calculation: • Subsequent season fee increase = 105% of Artist’s fixed compensation during the immediately preceding season • E.g. if Artist’s compensation in Season 1 of Reality TV show was $5,000 per episode, Artist’s compensation in Season 2 will be $5,250 per episode  No additional/ contingent compensation will be paid for services other than expressly set in the agreement  Such services could include incidental services in connection with: – publicity or promotion, overtime, meal penalties, rest periods, turnaround, mileage, work on holidays, etc. 13WWW.SEGUNALUKO.COM
  15. 15. On-Screen Talent Agreements (cont’d)  Exclusivity – During development and production and one (1) year thereafter (may be negotiated); – No appearance on any “reality” TV program on cable or network TV; – No entertainment related services to third party during exclusivity; – Warranty of no interference with agreement or performance as a result of any outstanding commitments; – Producer’s prior approval right required (not to be unreasonable withheld) with respect to: • Any and all television appearances by Artist during development and production of reality show (may be negotiated) 14WWW.SEGUNALUKO.COM
  16. 16. On-Screen Talent Agreements (cont’d)  Credit – On-camera talent credit on screen in each episode of series on which Artist renders services; – Size, placement and all other aspects of credit to be determined in Producer’s sole discretion; – May be subject to network approval; – Artist must not be in breach of agreement; – Casual or inadvertent failure to accord credit by Producer or licensees (e.g. Network) may not constitute breach of agreement; – Artist may negotiate “cure” provision. 15WWW.SEGUNALUKO.COM
  17. 17. On-Screen Talent Agreements (cont’d)  Publicity – Right to issue and authorize publicity concerning Artist; – Right to use and authorize others to use Artist’s name, photograph, likeness, voice and professional biography; – Use in connection with distribution, advertising and exploitation of Series and ancillary rights;  E.g. video games, home entertainment, commercial tie-ins, etc. – Artist’s personal publicity directly or indirectly related to Series is subject to Producer’s written approval; – Right is perpetual and throughout the universe in all media now known or hereafter devised. 16WWW.SEGUNALUKO.COM
  18. 18. On-Screen Talent Agreements (cont’d)  Ownership – Results and Proceeds are deemed a “work-made-for-hire” for Producer;  These include all themes, plots, characters, formats, ideas, stories, and all other material composed, submitted, added, created or interpolated by Artist. – Producer is the author and copyright owner for all purposes throughout the universe; – Producer’s ownership is in perpetuity;  With respect to all copyrights (and renewals and extensions thereof) in all forms now known or hereafter devised. – Artist’s waiver of moral rights (droit moral) and release from any right of publicity/privacy claim. 17WWW.SEGUNALUKO.COM
  19. 19. On-Screen Talent Agreements (cont’d)  Promotional Films – Producer’s right to produce documentary of Series which may include “behind-the-scenes” or “making-of” footage of Artist; – Artist’s consent to filming of documentary and grant of approval to Producer to use Artist’s name, voice, and likeness for no additional compensation.  Finder’s Fee – May be negotiated based on Artist’s celebrity status – If artist is unknown, Producer may take five (5%) of fees payable to Artist for any deal Artist gets subsequently as a result of Artist’s services in the Reality series (e.g. possibly Lisa Vanderpump’s deal with RHOBH) 18WWW.SEGUNALUKO.COM
  20. 20. On-Screen Talent Agreements (cont’d) Non-Union/Non-Guild – Artist’s services are not subject to any union, guild or other collective bargaining agreement; – Artist’s services shall not subject Producer to jurisdiction of any labor organization; – Artist’s services is on a “buy-out” basis such that fixed compensation shall be the only amount payable to Artist for Producer’s exploitation of the Series; – If Artist’s services become subject to guild agreement, then agreement will be amended to the extent necessary to comply with guild agreement; – No retroactive application of collective bargaining agreement. 19WWW.SEGUNALUKO.COM
  21. 21. On-Screen Talent Agreements (cont’d)  Representations and Warranties – Artist’s representation  Capacity to enter into contract (if minor, parental inducement plus magistrate’s approval);  No conflict or interference with performance;  Strict confidentiality;  No defamation;  No “Plugola” or “Payola” (disclosure required under FCA) – Producer’s representation  Mutual as Artist’s if negotiated. 20WWW.SEGUNALUKO.COM
  22. 22. On-Screen Talent Agreements (cont’d)  Indemnification – Indemnify from any and all third party claims (including outside attorney’s fees and costs) in defending action resulting from breach of agreement; – Indemnification may be mutual or specific to either parties.  Confidentiality – Restriction on Artist from releasing any information in connection with the Series; – Balancing confidentiality with the needed publicity in the age of social media (Twitter, Facebook, Instagram).  Suspension/Termination – Incapacity; Event of defaults (EODs); and Force Majeure. – Right to terminate or suspend in the event of occurrence of any of the above. 21WWW.SEGUNALUKO.COM
  23. 23. On-Screen Talent Agreements (cont’d)  Survival; – Usually applicable to grant of rights/ownership, reps and warranties, indemnification; dispute resolution.  Insurance – Subject to Artist submitting to customary medical examination and Producer obtaining normal premiums; – Producer to carry Worker’s compensation insurance during Production.  No Obligation to Use Artist’s Services or Develop, Produce or Exploit the Series. 22WWW.SEGUNALUKO.COM
  24. 24. On-Screen Talent Agreements (cont’d)  Remedies – Artist’s remedy for breach is limited to monetary damages; – Producer’s remedies are cumulative inclusive of damages and injunction and a one-time waiver of a remedy is not waiver of all remedies; – Limitation on Liability – excluding exemplary and punitive damages;  Miscellaneous – Assignment, Notices, Governing Law/Dispute Resolution, Interpretation and Related Matters, Severability, Integration, Modification and Execution. 23WWW.SEGUNALUKO.COM
  25. 25. Production Services Agreement  Form of Agreement – Producer Agreement; – Production company/Studio may produce the reality show and then license to Network or Cable TV with an option to order more Series episodes; – Showrunner may package reality TV deal, attach an artist and pitch to Studio/Production Company for Network or Cable TV to order pilot, series or episodes. 24WWW.SEGUNALUKO.COM
  26. 26. Production Agreements Deal Terms  Services – Development, production, completion and delivery of series; – Furnishing of all personnel, services, facilities, equipment and materials necessary; – Delivery of all physical elements of Series including all negatives, protection masters, sound tracks, positive prints, copies of any and all contracts, agreements, books and records of any kind held by production company; – Legal compliance, obtaining clearances and necessary waivers 25WWW.SEGUNALUKO.COM
  27. 27. Production Agreements (cont’d)  License from Company – To producer the revocable right to develop and produce series on “work- for-hire” basis; – If show is licensed to Network, Network orders pilot and Series Episodes – Initial Cycle, Additional Cycle, Minimum Episodic Guarantee  Compensation – Fixed (may be negotiated)  Producer Fee;  License Fee based on Production Orders by Network; – Increased Producer or License Fee for additional cycle 26WWW.SEGUNALUKO.COM
  28. 28. Production Agreements (cont’d)  Contingent Compensation – Share of Proceeds from Ancillary Use; – Adjusted Gross Receipts (AGR) definition and modifications:  Modified AGR;  Net Proceeds; – Percentage of AGR; – Third Party Participations. – Reserved Proceeds – Distribution Fee and expenses 27WWW.SEGUNALUKO.COM
  29. 29. Production Agreements (cont’d)  Approvals and Controls – Producer’s engagement of creative, artistic, technical and other personnel required for performance of services may be subject to Company’s prior approval  Term – Where Producer is engaged to provide production services; – Where Network licenses Series;  Fixed period with Company  Right of First Negotiation/Right of First Refusal to engage Producer or license Series for additional term.  Exclusivity as to exploitation of Series or engagement of Producer’s services within Term. 28WWW.SEGUNALUKO.COM
  30. 30. Production Agreements (cont’d)  Ownership – Results and proceeds shall be a “work-made-for-hire” for Company prepared, ordered or commissioned by Producer for use in an audio- visual work in accordance with the United States’ copyright law.  Include, without limitation, all themes, plots, characters, formats, ideas, stories and all other material composed, submitted, added, created or interpolated by Producer, – Company is the author and exclusive copyright owner of the work for all purposes throughout the universe; – Assignment of rental and lending rights under EU laws; – Waiver of moral rights (droit moral) 29WWW.SEGUNALUKO.COM
  31. 31. Production Agreements (cont’d)  Licensed Rights – Where reality TV show is optioned by Network or another entity; – (Non) Exclusive, (ir)revocable and (un)limited right to:  exhibit, distribute and exploit each Cycle of the Series; and  advertise, market, and promote the Series in any and all media, in any and all languages, and by any and all platforms; – Platform whether now known or hereafter devised; – Territory (throughout the world or United States, Canada, etc); – Foreign rights, domestic rights, format rights; derivatives. 30WWW.SEGUNALUKO.COM
  32. 32. Production Agreements (cont’d)  Reserved Rights  Frozen Rights  Subsequent production or derivative works based on Series: – Right of First Negotiation, – Right of First Refusal and – Last Matching Right.  Holdbacks 31WWW.SEGUNALUKO.COM
  33. 33. Production Agreements (cont’d)  Production Costs – Advance to producer on a cash flow basis, all sums; – in accordance with the final Company-approved budget for each Series episode. – Overages and Underages;  Liability and Entitlements – Upon delivery of a Series episode, all costs and expenses incurred in connection with the Services will have been paid in full by Company; – No outstanding claims, liens, encumbrances, or any other interest of any nature which might adversely affect the rights granted to Company or Company’s interest in the Services. 32WWW.SEGUNALUKO.COM
  34. 34. Production Agreements (cont’d)  Third Party Agreements – No conflict with Producer Agreement; – Results and proceeds as “work-made-for-hire”; – Agreements to contain terms and conditions customary in television and motion picture industry applicable to type of services rendered  Agreements shall be fully assignable to Company or its designees; – All rights and benefits flowing to Producer in agreement shall inure to the benefit of Company or assigned to Company. – Assignment of allied, ancillary and subsidiary rights;  Right to distribute, exhibit, sell, use, license, advertise, exploit and otherwise turn to account the Series;  Rights vested in Company is exclusive, perpetual and throughout the universe. 33WWW.SEGUNALUKO.COM
  35. 35. Production Agreements (cont’d)  Further documents – Assignment of Copyright; – Certificate of Results and Proceeds; – Certificate of Copyright Registration; – Chain of title; – Other releases 34WWW.SEGUNALUKO.COM
  36. 36. Production Agreements (cont’d)  Suspension/Termination – Event of default, Disability, and Force Majeure; – Effect of Suspension/Termination.  Takeover right – Company’s irrevocable right, but not obligation, to take over development, pre-production, production and/or post-production of any Series episode; – Triggers (10% or more)  Over Budget, Over Schedule, Late Delivery, Insufficient Funds, Default by Producer, Company’s discretion. 35WWW.SEGUNALUKO.COM
  37. 37. Production Agreements (cont’d)  Consequences of Exercise of Takeover rights – Right to proceed with development, pre-production, production, post- production and/or completion of Series; – Obligation of Producer to assign all interests and third party agreements to Company; – Producer’s assumption of responsibility for payment, on a pro-rata basis, of any costs, expenses and/or charges (including production fees) to Company, that are due and payable up until the exercise of Takeover rights. – Takeover rights will not limit other remedies Company may have. 36WWW.SEGUNALUKO.COM
  38. 38. Production Agreements (cont’d)  Representations and Warranties – Capacity of parties to contract; – No liens or encumbrance on results and proceeds or impediments to marketable title of the Series; – No violation of any third party IP rights or right of publicity; – All synchronization and performance rights for the music in the Series have been obtained.  Indemnification – Producer to defend and hold harmless Company from any damages or injury from third party claim arising from breach of Agreement or Producer’s services. 37WWW.SEGUNALUKO.COM
  39. 39. Production Agreements (cont’d)  Remedies – Producer’s remedies limited to monetary damages; – Company’s remedies are cumulative;  damages and injunction. – Limitation of liability on consequential and punitive damages for loss of profit, etc.  No Obligation to Use – Company has no obligation to use Producer’s services or develop, produce, distribute or exploit the Series.  Assignment – Producer may not assign or subcontract services but Company may assign agreement. 38WWW.SEGUNALUKO.COM
  40. 40. Production Agreements (cont’d)  Guild/Union applicability  Credits – Position, size, type “produced by” or “production company” or “presentation” credit  Publicity and Confidentiality;  Miscellaneous Provisions – Substantially similar with provisions in talent agreement. 39WWW.SEGUNALUKO.COM
  41. 41. Thanks for listening Q&A WWW.SEGUNALUKO.COM 40