A wise man once told me, “Everybody gets screwed the first time.” He was talking about showbiz deals, and movies in particular. But the thought applies to pretty much all arts and entertainment deals. The question is, how do you avoid getting the shaft? And the answer lies largely in understanding what’s negotiable and what’s not.
Whether you’ve already signed or you’re in the throes of negotiating the next big project, contracts will exert a powerful influence over your creative career. Those pieces of paper define what you and those with whom you do business have agreed to do and not to do. At its most basic, it is The Deal. And understanding The Deal is essential. The more you know, the more efficiently and effectively you can work with your attorney, and the better they can negotiate for you. What’s more, knowledge will put you in a better position, come time for the next deal.
Contracts differ depending on your discipline, medium or field – a TV series development deal is different than an art gallery representation agreement is different than a resident theater contract. Yet there are some common elements to nearly all arts and entertainment contracts. Without further ado then, what follows is the first in a series of posts that will explain key concepts in entertainment contracts.
“Term” — The Beginning and The End
Let’s start with something very basic to contracts. The term of a contract refers to the period in which the deal is in effect. When does it begin – is it on a particular date, or with the happening of a particular event? And perhaps more important, when does it end?
You want to know how long you are in the deal. As a creative professional, you need to know the exact time frame when your services will be required, or when your artwork or literary property will be bound by the terms of the contract. Yet you also need to know what happens after the term of the deal. What happens when it is over is often given short shrift. Sometimes it is overlooked or left out of a contract entirely. What happens to your rights when the contract ends: does the script or copyright come back to you? Do all of your rights revert? Get the happily ever after nailed down before you finalize the deal, or you may not be happy about what happens post-contract.
Do the Rights Revert?
This is related to Term, above. A key question regarding the end of the contract is what happens to the rights. To say that the rights “revert” means that they return to the person who negotiated them away in the first place. It’s not a given that the rights will revert. However, it is crucial to make sure that what happens to the rights at the end is determined at the outset.
Here’s the scenario. A person (let’s call her “Writer”) is selling her rights to a particular creative property (let’s call it the “Script”) to another person or entity (the “Producer”). If there is to be a reversion of rights, that’s the point when the Writer will get the rights to the Script back from the Producer. In other words, she’s not selling the Script to the Producer for all time and eternity. Rather, Writer is selling the rights to her Script for a limited time. Thus, Writer is rightly concerned about exactly how limited that Term may be, and if and when she’ll get the rights back if the Producer is unable to produce the work or succeed at whatever was proposed.
Contracts should specify the reversion of rights for unexploited properties, as well as the schedule and mechanisms of the reversion. Potentially ongoing issues such as indemnification and insurance must also be spelled out. Typically, the end comes after a certain amount of time, or when a particular milestone or event transpires. Whatever it is going to be, just make sure this post-contract future is spelled out at the start.