Entertainment Law by Sherri L. Burr

Sherri L. Burr. Entertainment Law. St. Paul, Mn.: Thomson West, 2007.

The entertainment business is an important part of our culture and our economy. Its exports are financially larger than our food exports. Foreigners learn about American culture through entertainment exports and are apt to see and desire American fashion, products, etc.

A main film producer often hires creative staff, hired actors and directors who can work with the studio and with each other, chooses film locations, develops a budget, makes legal arrangements (if necessary) with shooting locales which can sometimes include foreign governments, supervises the screenwriting and then the filming and then the editing, and consults with studio personnel on marketing and publicizing the film. Producers without a financial interest in the film or the company doing the film who are employed by a studio or a production company are “employee-producers”.

Some producers are financial investors or primarily involved in obtaining investors in a film. They may have budget oversight.

Producers obtain distribution agreements, including domestic and foreign. These rights are agreed to before a film is finished and encompass the release date, a list of theater showings plus the contract details of theater exhibitions, the cost of advertising, as well as contract details for DVD, cable, TV broadcasting, etc.

A screenwriter has a right to buy back a script that contains no preexisting material if it is not produced after five years nor is in active development. The writer must repay the purchase price and/or the price of writing services. A subsequent purchaser must pay the rest of direct material costs and interest and so pay before principal shooting begins.

A director has the responsibility for a film’s images and “feel”. A director sees the screenwriting producers an appropriate script, directs rehearsals with actors, and provides direction to camera and sound operators, as well as providing direction to costume designers, set designers, editors, music composers, and the film laboratory technicians. Preproduction often takes two to six months.

Independent directors may be responsible for some activists a major studio producer would handle, such as raising financing, costumes, obtaining permits, seeing laws such as child labor laws are obeyed, and working with local film commissions.

Leading actors may work for 6 to 7 years while character actors may be employed for 50 years. Character actors master the ability to use body language and dialects to obtain various effects/

A “star’ is an actor a studio executive seeks and a “superstar” is an actor all the studios seek. The name of a star attached with a film should attract investors to finance a film. Some question the economic differences that stars bring to film profits, as in 2003 less than half of the most commercially successful films were star vehicles.

Technical staffs arrange sets and lights into their proper positions. Actors then arrive to act. Film editors craft raw film footage into usable film stock for post production.

The director of cinematography is responsible for all the movie photography.

Gaffers handle lighting.

Michael Orvitz, a former agent and cofounder of Creative Artist Agency, received $140 million to leave employment after 14 months with Disney, an amount that was almost 10% of Disney’s 1996 earnings.

Joe Roth was a leading executive at two major studios before creating an independent studio, Revolution. Revolution producer 47 films before it failed after six years.

Over 300 film commissions are members of the Association of Film Commissioners International. These are local commissions that assist nonlocal film productions.

Film and television was a $34 billion industry in California in 2005. Other states seek to attract filmmakers.

Louisiana has a 25% investor tax credit rebate and a tax credit for up to 20% when employing a Louisiana resident.

New Mexico has a 25% tax credit on all production and labor costs. The New Mexico Investment Council invests up to $15 million a film and that can be the film’s entire budget. This investment requires a guarantor who will guarantee the loan’s payment, a completion bond, the existence of a distribution or a presales agreement, 60% or more of below the line payroll going to New Mexico residents, and a substantial part of the film being shot in New Mexico.

Florida has a 15% reimbursement once $850,000 or more is spent by a film on various qualified expenses within Florida/

Action films often earn the most revenues, both domestically and in foreign revenues. They are often the more expensive type of film to make. They are often dangerous to make. There people were killed during filming “Twilight Zone: The Movie”. The film’s director went to trial for involuntary manslaughter and was acquitted.

Animated films often are less expensive to produce.

Documentaries are often less expensive to make. “Fahrenheit 9/11” has been the most financially successful documentary. It cost $6 million to produce and $10 million to generate. It has made about $250 million worldwide.

A person who signs a release and is paid to appear in a documentary still may sue. A contract is valid even if the person doesn’t read it all. Some who have sued claimed they were given alcohol before being shown the contract.

Television executive Brandon Tartikoff seeks enthusiasm when people first wish to create a TV series. That enthusiasm may need to last for years to keep the series fresh.

Major networks generally begin new TV series in early September, offer mid-season replacements in January, and have summer shows. Fox TV offers new shows year round.

There were 30 Western TV series on the three networks in the 1950s. In 2004, the only Western was “Deadwood” on HBO. The Western “Gunsmoke” ran from 1955 to 1975 and is the longest running TV series at 633 episodes.

TV executives want shows that can last five seasons. Full season orders of shows are 22 episodes. After about 100 episodes, a show is generally considered as having enough episodes for syndication. Desilu earned $60 million between 1955 and 1965 form syndicate licensing of its shows including “I Love Lucy”.

Michael Constanza sued Jerry Seinfeld, contending he was the inspiration for the character George Constanza on “Seinfeld” and that the character cast him in a bad light. The New York courts determined the suit was frivolous and sanctioned George Constanza and his lawyer each for $2,500. The Appellate Division ruled the dismissal of the lawsuit was appropriate but removed the sanctions.

TV show contestants who win prize money are required to pay taxes on the prize money. A contestant winner of “Survivor” was sentenced to 51 months imprisonment for failing to pay taxes on the money he won.

A reality show may require a contestant to sign a confidentiality agreement. A person who signed and then challenged this was unsuccessful in California court.

TV game shows have a right to limit the number of times a person can appear on all game shows.

A release statement to appear on a game show that included a provision that the decision of the producers at to the game was upheld in New York court when a contestant challenged that he had given an alternative correct answer on a game show that stated his answer was wrong.

TV talk shows usually require interviewees to sign release agreements.

A TV news station, whose crew followed paramedics and filmed an unsuccessful attempt to revive a patient, had a California court rule the widower had a cause of action for trespass, privacy invasion, and intentionally inflicting emotional distress.

A Circuit Court held that KMGH in Denver engaged in illegal age discrimination in not renewing contracts of anyone in news reporting over age 40 and limited those over 40 to late evening news.

A class action suit of 50 television writers over age 40 claiming age discrimination. Citing that two third of TV series lacked any writers over age 40, was dismissed. 23 separate similar suits were all dismissed.

An American Family Physician study of school children and the amount of time they spent viewing TV concluded there was a correlation with increased TV watching with increased attention deficits, aggression, externalization, delinquency, social problems, and thinking problems. The study advised that children view two or less hours of TV a day.

Clarence Muse was the first African American to appear on TV when he appeared on W6XAO station in Los Angeles. Bob Howard was the first African American to star in a network TV show on a show that ran from 1948 to 1949, “The Bob Howard Show”.

The U.S. Supreme Court rules in Adarand Construction v. Pena in 1995 that Federal Communication Commission (FCC) rules to encourage the employment, as well as station ownership, or members of racial minorities violated the equal protection component of the Due Process Clause of the Fifth Amendment. This overturned a 1990 Supreme Court ruling that had upheld the FCC rules. In 1999, none of the major networks’ new shows had a lead actor who was African American, Latino, Asian American, or Native American. A threatened boycott by the NAACP led the networks to agree to create more characters who were racial minorities.

A study by Robert McIlwraith concluded people can become addicted to watching TV.

Cable began with the Community Antenna Television when TV salesman John Watson put an antenna on a Pennsylvania mountain to capture and transmit TV signals to his store so he could sell more TV sets. 60% of households had cable in 1992. 80% of households had cable in 2001.

The U.S. Supreme Court in Turner v. FCC in 1997 upheld FCC rules requiring calbe television to carry local programming.

In 1999, the Satellite Home Viewer Improvement Act became law. This requires direct broadcast satellite companies to include all broadcast stations if they include at least one. To make it easier for direct satellite companies to do this, it allowed them to show these stations without having to obtain copyright authorization for each program shown. The U.S. Circuit Court of Appeals upheld this rule as necessary to key an array of local broadcast stations in existence.

The U.S. Court of Appeals halted FCC rules that would have prohibited a conglomerate from owning multiple media outlets in the same city, meaning no one can locally own two TV stations or a TV station and a newspaper, or a TV station and a radio station.

A Center for Public Integrity study found that over eight years that FCC employees took about 2,500 trips costing $24.8 million that were mostly paid for by the telecommunications industry. Las Vegas was the most popular destination for these trips.

TV networks had a recent financial interest in 67% of their prime time shows compared to 32% in 1992.

NBC, CBS, ABC, and Fox offer TV shows online. They may be viewed for free and have advertising.

YouTube allows people to post videos for all to see. Google purchased YouTube for $1.65 billion in 2006.

Over 305 million units of music were sold in 2004. Compact discs account for 98% of those sales.

A music publisher contracts with companies to sell sheet music of a composer’s works and shares the revenues with the composers. A performance may perform a composer’s song by paying statutorily set royalties to the music publisher who then gives the composer a share of these earnings.

A recording company granting a right for a song to be in a movie allows the song to remain in the movie for future distribution, including DVD and by any means or methods now or hereafter known.

Many recording companies pay for a band’s touring expenses out of the band’s royalties. Some band members have not been aware of this.

The U.S. Supreme Court ruled in Miller v. California in 1973 that “obscene material is not protected by the First Amendment” and rules obscenity is determined by whether “the average person, applying community standards, would find the material pruient, if the work describes or shows sexual conduct, and if the whole work lacks an artistic, literary, or scientific value.”

The Motion Picture Association of America (MPAA) sought movie self-regulation by creating ratings of G (for general audiences), PG (for general audiences with parental discretion), R (minors restricted unless viewed with an adult), and X (obscene, not to be viewed by minors) to provide viewers notice of a movie’s content.

The U.S. House Committee on UnAmerican Activities (HUAC), which began in 1938, investigated Communist influence in Hollywood. Many suspected members of the Communist Party were blacklisted. Several of those blacklisted sued. U.S. District Court in 1962 found that the movie industry had a legitimate interest in controlling possible subversive activities from being introduced to movie viewers and in protecting themselves from anti-Communist boycotts. HUAC was abolished in 1974.

The U.S. Supreme Court in 1961 in Times Film Corp. v. City of Chicago upheld the right of states and cities to require a film to be submitted for local determination if it was obscene. In 1964, four states (New York, Virginia, Maryland, and Kansas) and four cities (Chicago, Detroit, Providence, and Fort Worth) had active censorship laws. In 1954, the U.S. Supreme Court in Freedman v. State of Maryland overturned a conviction for violating local obscenity laws stating the Maryland law posed too great a burden on film exhibitors.

Mirimax Films Corp. sued the MPAA for giving an X rating to the film “Tie Me Up! Tie Me Down!”. The New York Supreme Court in 1990 dismissed the case stating the courts was not the appropriate place to seek relief for an internal industry dispute.

A District Court of Appeals remanded a District Court’s dismissal of a case brought by Maljack Productions against MPAA. Maljack argued MPAA gave an X rating to a film because Maljack was not a member of MPAA. The Appeals Court stated that was a breach of fair dealing and good faith.

A court ruling allowed a school superintendent to refuse to allow a history teacher to show an R rated film “Schindler’s List” to his class.

MPAA ratings have been criticized for being based on sexual content rather than considering violent content.

A court rules that Paramount Pictures and Saxon Theater Corporation could not be sued because a person who viewed the movie “The Warrior” about juvenile knife violence then committed a similar knifing death. Similarly, a victim of a violent crime committed by people who viewed the movie “Natural Born Killers” was unable to successfully sue the studio, Warner Brothers, and the director, Oliver Stone, declaring the movie as protected speech.

The FCC fined CBS $550,000 for a two second showing of Janet Jackson’s bejeweled breast. (Note: Since this book’s publication, this fine has been overturned in court.)

The FCC fined Clear Channel $1.75 million for indecency of the “Howard Stern Show”.

The U.S. Supreme Court ruled that since cable TV could have shows blocked on a household basis that Playboy had a First Amendment right to broadcast whenever they wanted. Prior to then, sexual oriented shows were limited to cable broadcasting between 10 pm and 6 am or else had to be blocked or scrambled.

The Michigan Court of Appeals held, and the U.S. Supreme Court denied a writ of certiorari seeking an appeal of the holding, that “The Jenny Jones Show” was not liable for damages and did not have a duty to anticipate that a guest would react to learning that a second guest had a crush of the first guest would lead the first guest to later murder the second guest.

A court decision disallowed a trial against NBC by the victim of a rape that was seen and then simulated from the TV show “Born Innocent”.

Two people were convicted in U.S. Court of Appeals in 2005 of obscenity for selling videos that showed sodomy and torture on the Internet.

The title of a movie or TV show may receive a trademark if it is going to be used in the marketplace or merchandising.

The Law of Ideas protects story segments that lead to movies of TV shows. Copyrights protest those expressions of ideas.

The Law of Ideas means the originator or an idea that is developed must be compensated. Many court cases have resulted in attempting to establish whether one party factually heard and agreed to compensate for an idea discussed in confidence.

A screenwriter can copyright a script and receive credit for the script. Upon selling the script to a studio, it legally becomes a commissioned work and the copyright is in the name of the studio.

In 1976, Monty Python successfully won an injunction to prevent ABC from broadcasting an edited version of a work of theirs they argued misrepresented the original work. They argued for the Right of Integrity. ABC had removed 24 of the original 90 minutes and left a program that was difficult to follow.

French court refused to allow a colorized version of the film “Asphalt Jungle directed by John Huston to be shown on French television and ordered Turner to pay 200,000 francs in damages and cost. John Huston objected to showing of the version that had been colorized by Turner claiming he deliberately shot and crafted it as a black and white film. The French court agreed that while Turner owned the economic rights to the movie that John Huston retained authorship of the film.

In order to prove a copyright has been infringed, it must be shown that a copyright is owned and that another person either copied or used an exclusive right of the work.

In 1936, a court found that the movie “Letty Lynton” was substantially similar to and thus had violated the copyright of the play “Madeline Cary”.

A District Court ruled in 1977 that certain aspects of TV show are protected from infringement. The court ruled that McDonaldland TV commercials were similar to the TV show “H.R. Pufnstuf”.

The Los Angeles News Services (LANS) sued Reuters for sending a copyright videro of riot beating to Europe and Africa from a satellite transmission originating in New York. Copyrights do not apply outside the U.S. The Court of Appeals declared the New York means of sending the unlicensed film infringed copyright laws and that LANS could obtain damages.

In Hochling v. Universal City Studio, a Federal court ruled that a book author’s theories about the Hindenburg disaster were not protected as interpretation of facts can not be copyrighted.

The fair use of copyrighted material is allowed for nonprofit educational reasons. Whether a copyright has been violated is determined according to how much of the copyrighted material was used, how much of the value or potential market value of the work is, and upon the nature of the work. Remedies may be ordered to prevent or restrain copyright infringement. A court may impound all copies, film negatives, tapes, plates, etc. of material infringing a copyright. A copyright owner may choose to receive statutory damages of $750 to $30,000 instead of actual damages. A court finding a copyright infringement was willful may award $150,000 or less in damages. Criminal willful copyright violations for financial gain over $1,000 could lead to five years or less imprisonment and/or $250,000 or less in fines.

The movie “Tomorrow Never Dies” received $110 million in product placement and merchandising contracts, which is about what it earned in domestic box office revenues.

Hormel sued Jim Henson Productions over the creation of a character Spa’am. Hormel feared its product SPAM’s reputation would suffer. The court decided the character was a legal parody.

California limits agents from receiving no more than 10% of their clients’ earnings. In New York, literary agents charge 15% of earnings.

Lawyers representing union members in negotiations should learn what collective bargaining already establishes so they don’t negotiate for a right their client already has.

California requires an agent who seeks to procure employment for a client be licensed according to the Talent Agencies Act.

Actor Kelsey Grammer sought to terminate having Artist Agency as his agent. Artist Agency and Grammer agreed to an interim contract where they would represent his TV work and another agent could handle his movie deals. A year later, Grammer sought out of his contract with Artist Agency. Artist Agency sued Grammer for $2 million. An arbitration panel agreed with Artist Agency. Grammer appealed in court but lost. Grammer would ridicule agents on his “Frazier” TV show.

There are no legal requirements to being a manager. A manager acting as an agent without being a licensed agent risks not getting paid. A manager advises a person on carrier and professional development. Managers may charge more than 10% of earnings.

A member of the Screen Actors Guild (SAG) can lose union protection if the member agrees to work for a producer who has not signed a basic minimum agreement with SAG.

The U.S. Supreme Court in Marquee v. Screen Actors Guild ruled in 1998 that SAG has no legal duty to notify someone about specific rights.

The Writers Guild settles writing credit disputes by having a committee hearing and then using three arbiters who read the materials and decide credits by majority vote. This decision is reviewed by a Policy Review Board. A decision must be made within 21 days or else the producer may determine the screenwriting credits.

The Producers Guild of American is a voluntary organization of producers. It can determine who receives producer credits.

The International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists, and Allied Crafts (IATSE) has over 104,000 members. This makes it the largest union in the entertainment business.

The American Federation of Television and Radio Artists has 70,000 members. Actors Equity has 46,000 stage actor members.

In film credits, an ampersand between names means they wrote together while “and” indicates a writer who contributed a version of a script.

New York Court in Sophia Loren v. Samuel Bronston Productions ruled that receiving a billing does not damage one’s prestige.

The court ruled in favor of director Michael Apt who asked that his name be removed from the TV version of the movie “Thunderheart” when 22 minutes was cut from the film.

Stephen King sued to have his name removed fro a movie that described itself as “Stephen King’s The Lawnmower Man”. He believed the final story was very different from the original short story he had written to which he has sold the movie rights. The District Court held the film company in contempt for not having a required consent decree.

The Academy Award for Best Pictures award goes to the movie’s producers.

California court found removing a “film by” credit could cause the person who previously had such credit harm. Producer, writer, and production manager was awarded $25,000 when the 10th anniversary of this film “Four Stones for Kanemitsu” removed his “a film by” credit.

A Most Favored Nation clause in a contract requires the actor afforded such states to receive an increase in compensation equal to that of another actor should another actor in a work receive higher compensation that what the actor holding that clause receives.

William Smith sued and won $3 million damages in California court from MGM for its getting him to agree to less pay for a TV series in return for upfront billing at the start of the show. Instead, eleven actors received upfront billing, but not him. The case was appealed and settled out of court.

The weekly wages (circa 2007) for a key grip is $3,018, for a set painter $2,889 and for a screen actor $2,541.

A “pay or play” clause in a contract requires a studio to pay a stated amount in case the project is canceled.

Guaranteed compensation is paid at scheduled dates. Deferred compensation is paid when a listed event happens. Contingent compensation is paid according to a formula based on revenues, which could be either gross or net revenues.

Studio accounting systems seldom determine that a movie earned any net profits. For instance, Leonardo DiCaprio negotiated to be paid 18% of net profits of “Titanic”, which earned $2 billion, yet was paid nothing according to this clause in his contract. Studios deduct from net profits the costs of distribution fees and expenses, gross participation payouts, direct production costs, an overhead charge (usually 15%), and interest. Studies nearly always claim these expenses are larger than net profits.

Art Buchward and Alan Bernheim won a lawsuit over nonpayment for their idea for a movie in which they had been promised a percent of net profits. After discovering this meant no actual money, they sued. California court in 1990 found payments based on net profits were unreasonable. The court found most of the accounting overhead costs were not reasonable as to what actual overhead and interest costs were. Many costs were counted twice.

California court in 1994 ruled that a contract with part of a payment based on net profits wasn’t fair but since it was not coerced it was “not unreasonable”. The publicity over studios’ use of net profit caused them to use the term “adjusted gross profits” and “modified adjusted gross profits” which is a term where a person usually receives payments for an actual percept of gross profits.

The insurance company that insured two films that actor River Phoenix had been signed to film sued his estate after he died of a drug overdose. They noted he had signed a statement that he did not use drugs. The court ruled for the estate nothing that dying excused him from his contracts.

Main Line Pictures was awarded $9.8 million, twice more than what they asked for, when actor Kim Basinger breached her contract. Kim Basinger testified she could breach a contract “anytime I want to”, a statement to which the court did not agree.

An option contract to a writer gives a studio rights to something the writer has written. The writer receives a fee and a credit and keeps the rest of the copyright to the work, unless this is specifically changed in the contract; Authors should carefully read their contracts, as author Tony Hillerman unwittingly gave a producer all book rights to his character “Joe Leaphorn”, requiring him to hire an attorney to regain the book right sto his own book character.

Some book writers have words from their books placed into a movie and have been able to obtain a screenwriting credit.

Screenwriter contracts can contain multiple compensation criteria and have performance standards, including due dates and requirements of due diligent efforts at writing. Some contracts may include commitments to any sequels. Often the contracts determine ownership rights between writers and producers,

Writers should also have contracts reviewed by lawyers.

A director who agrees, even orally, to direct a film and accepts payment to direct is obligated to direct the picture. Some directors discover too late that a project is not what they initially thought, yet accepting money to direct the movie creates a legal obligation.

A contract between a director and a studio usually specifies the services requires of a director, such as location searches, preproduction meetings, rehearsal, principal shooting, editing, cutting, and final mix. Compensation can be handled a number of ways, including a mix of fixed, deferred, and contingent amounts. Some director contracts contain “pay or play” provisions. The contracts may have performance standards for the director and allow for a director to be fired.

A letter containing a commitment to pay can be held as a valid contract.

BBC allowed ABC to make changes to the Monty Python series. A count found that BBC did not have the right ot make major changes, only minor changes. A court ruled in favor of the Monty Python actors who sought to prevent ABC from airing of the edited versions of their work.

There are state law privacy rights protecting against intruding into private affairs, against public disclosure of private facts, falsely placing someone in a false light in public, or using someone’s likeness for profit. A celebrity’s right to privacy is often balanced with the public right to a legitimate interest in learning what a celebrity does.

Desilu was able to use the likeness of Al Capone in ads for the TV series “The Untouchables”. His widow and son sued yet the courts ruled dead people have no privacy rights.

A court ruled a portable toilet could not be named “Here’s Johnny” because the phrase was a signature phrase of Johnny Carson.

About thwo thirds of people die without a will.

Less than 10% of Australian films make a profit.

Many Indian filmmakers take advantage of filming and tourism offers in Switzerland.

The German government prefers supporting German filmmaking rather than attracting foreign filmmakers.

The United Kingdom spends $100 million to publicize films that feature British culture. They also have a government office that seeks foreign filmmakers.

Piracy is a concern, especially in China, Brazil, and Thailand. It is estimated 90% of Thailand’s video market is pirated.