Legal Issues in Film Pre-Production

Legal Issues inLegal Issues in
Pre-ProductionPre-Production
Donald R. Simon,Donald R. Simon, J.D./LL.M.J.D./LL.M.,,
Adjunct FacultyAdjunct Faculty

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 projectsTo protect themselves and their projects
from lawsuits and other legalfrom lawsuits and other legal
entanglements, media producers need toentanglements, media producers need to
be familiar with key areas of the law.be familiar with key areas of the law.
– GOOD NEWS: Media producersGOOD NEWS: Media producers do notdo not
need to be lawyers!need to be lawyers!

– ButBut dodo need to anticipate and identify theneed to anticipate and identify the
many potential legal issues that canmany potential legal issues that can
come up during a production andcome 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 inWhen parties should put agreements in
writing.writing.
• When permits, permissions, and releasesWhen permits, permissions, and releases
are required during the course of aare required during the course of a
production.production.
• What steps are necessary to add music toWhat 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 soleCombines the best elements of sole
proprietorships, partnerships, andproprietorships, partnerships, and
corporations.corporations.
– The primary advantage of an LLC is that itsThe primary advantage of an LLC is that its
owners have “limited liability,” meaningowners have “limited liability,” meaning
that, under most circumstances, they arethat, under most circumstances, they are
not personally liablenot personally liable for the debts andfor 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, wholosses 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 theFile “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 andBe 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 productionLike 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 productionIn an ideal world, all production
relationships would be based solely onrelationships would be based solely on
handshakes and trust.handshakes and trust.
– Unfortunately, the world of production isUnfortunately, the world of production is
rarely ideal.rarely ideal.
– Experienced producers usually will seekExperienced producers usually will seek
formal, contractual assurance theformal, contractual assurance the
promised services will be completed.promised services will be completed.

– Although they cannot guarantee theAlthough they cannot guarantee the
success, production contracts can do thesuccess, 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 aProvide for what happens in the event of a
dispute.dispute.

– A contract is an agreementA contract is an agreement
that creates obligationsthat creates obligations
between 2 or more parties.between 2 or more parties.
– In addition, once theIn addition, once the
contract is placed in writingcontract is placed in writing
and signed by the parties, itand signed by the parties, it
serves asserves as proofproof of thoseof those
obligations.obligations.

– This is why, even though oral contractsThis is why, even though oral contracts
are considered valid in manyare considered valid in many
circumstances, all media productioncircumstances, all media production
contracts should be placed in writing.contracts should be placed in writing.
– In the event of a dispute, the writtenIn the event of a dispute, the written
contract provides immediate proof of thecontract 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 termsInstead, 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 toVague language leads to
misunderstandings, disputes, andmisunderstandings, disputes, and
lawsuits.lawsuits.
– Use simple language that accuratelyUse simple language that accurately
expresses the deal.expresses the deal.

– Depending on how complicated theDepending on how complicated the
matter, you don’t necessarily need amatter, you don’t necessarily need a
lawyer.lawyer.
– There are a number of good form booksThere are a number of good form books
that media producers can use to helpthat media producers can use to help
draft standard contracts.draft standard contracts.

– Most forms are simply a starting placeMost forms are simply a starting place
and need to be revised to reflect yourand 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 theget it in the
contractcontract!!

– Bring in a lawyer whenBring in a lawyer when::
• You’re being asked to sign something you doYou’re being asked to sign something you do
not fully understand;not fully understand;
• You’re being asked to sign something thatYou’re being asked to sign something that
commits you or your company to a long-termcommits you or your company to a long-term
obligation; orobligation; or
• You’re negotiating a deal that is vital to theYou’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 secureAs a rule, producers should secure
written releases from all performerswritten 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 thoseThe only exception would be those
individuals who appear as faceless formsindividuals who appear as faceless forms
in crowd scenes or remote shots.in crowd scenes or remote shots.
– Just make sure these individuals truly doJust make sure these individuals truly do
appear in a form that would not beappear in a form that would not be
recognizable to family, friends, or a judgerecognizable to family, friends, or a judge
or jury.or jury.

Releases:Releases:
– For professional actors,For professional actors,
the release language isthe release language is
usually included in ausually included in a
complete contract thatcomplete contract that
covers all aspects ofcovers all aspects of
their appearance in thetheir appearance in the
production.production.

Releases:Releases:
– Make the performers understand theMake 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 orIf a performer prefers not to sign or
demands extensive changes, finddemands extensive changes, find
someone else to fill that role.someone else to fill that role.

Releases:Releases:
– Once all the performer releases areOnce all the performer releases are
signed, store them in a secure, preferablysigned, store them in a secure, preferably
fireproof, location.fireproof, location.
– You should also keep additional copies ofYou should also keep additional copies of
the releases in a separate secure location.the releases in a separate secure location.

Releases:Releases:
– Some productions, particularlySome productions, particularly
recordings of live presentations orrecordings of live presentations or
performances, feature shots ofperformances, feature shots of
audience members.audience members.
– Ideally, each audience member shouldIdeally, each audience member should
execute a writtenexecute a written audience releaseaudience release..

Releases:Releases:
– When logistics prevent this, you shouldWhen logistics prevent this, you should
post a notice prominently at all entrancespost 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 privateIf you plan to conduct a shoot in a private
area, such as a person’s home, be sure toarea, such as a person’s home, be sure to
obtain aobtain a location releaselocation release..
– Along with protecting you from charges ofAlong with protecting you from charges of
trespassing, location releases serve astrespassing, location releases serve as
contracts that define the terms undercontracts that define the terms under
which you will be allowed to occupy thewhich you will be allowed to occupy the
property.property.

PermitsPermits

Permits:Permits:
– Many states and municipalities requireMany states and municipalities require
permits for location work, particularly forpermits for location work, particularly for
work will be performed on publicwork will be performed on public
thoroughfares or government property.thoroughfares or government property.
– Fees vary depending on where you will beFees vary depending on where you will be
shooting and your need to involve theshooting and your need to involve the
police department, fire department, orpolice department, fire department, or
other service agencies.other service agencies.

Permits:Permits:
– Begin by contacting the film and TV officeBegin 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 whatThe agency will be able to tell you what
permits you must complete.permits you must complete.
– They also offer resources such as a crewThey also offer resources such as a crew
database and information on productiondatabase and information on production
insurance, and tax credits.insurance, and tax credits.

Permits:Permits:
– If you are caught shooting without theIf you are caught shooting without the
proper permits, the penalties can beproper permits, the penalties can be
severe.severe.
– At a minimum, you will be forced toAt a minimum, you will be forced to
suspend production until the propersuspend production until the proper
permits are in place.permits are in place.
– Idle crew and equipment could beIdle crew and equipment could be costlycostly!!

Permits:Permits:
– You may be also subjected to substantialYou may be also subjected to substantial
fines.fines.
– For some severe violations, particularlyFor some severe violations, particularly
unauthorized use of pyrotechnics, theunauthorized 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 aA special type of insurance that protects a
company against many accidents, mishaps,company against many accidents, mishaps,
and acts of nature that can cause problemsand acts of nature that can cause problems
during a media production.during a media production.
• Most major film and TV producers protectMost major film and TV producers protect
their investments through the purchase oftheir investments through the purchase of
production insurance.production insurance.

– Production InsuranceProduction Insurance::
• Usually costs 3-to-5% of the total productionUsually 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, stuntE.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 mayProtects producers from lawsuits that may
arise from thearise 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 theNeed a “synchronization license” from the
songwriter or music publisher;songwriter or music publisher; ANDAND
• Need a “master use license” from theNeed a “master use license” from the
recording company (if using a pre-existingrecording 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 respectivemust be cleared with their respective
trademark ownerstrademark owners

– Negotiations with potential distributorsNegotiations with potential distributors
– Follow-up on production tax incentivesFollow-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 aForm an LLC, get a tax ID, and set up a
business checking accountbusiness checking account
 Prepare a database of legal agreements toPrepare a database of legal agreements to
use including various releasesuse including various releases
 See what permits are required (if any) inSee what permits are required (if any) in
your city and/or stateyour city and/or state

Checklist:Checklist:
 Get production and E&O insuranceGet production and E&O insurance
policies that fit your situationpolicies that fit your situation
 Begin the music, logo, and imageBegin the music, logo, and image
clearance processesclearance processes
 Consult with a lawyer and an accountantConsult with a lawyer and an accountant
for legal and tax issuesfor legal and tax issues

For Further Reading:For Further Reading:

Questions?
Questions?

Thank
Thank
You!You!

Legal Issues in Film Pre-Production

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