So You're Going to TIFF
By: Andrew Schauer, Esq.
The Toronto International Film Festival is one of the entertainment industry’s landmark events every year. Filmmakers are rightfully excited to have their work displayed on one of the world’s biggest stages – so much so that they sometimes get ahead of themselves and aren’t fully equipped to answer the tough questions buyers have when they come calling. Film distributors can sometimes seem like they’re speaking a different language from film producers, but if you can’t afford (or don’t want) a lawyer to translate that difference for you it could mean leaving a lot of money on the table. Here are a few common problem areas that I would love to help you out on as your lawyer, but at least want you to be aware of as your friend.
1. COPYRIGHT. It doesn’t occur to a lot of filmmakers that their work might not be protected by copyright, until it comes time to hand it over to someone else, and especially if that someone else might be showing it to lots of other someone-elses. If – even worse – you’ve already submitted your film to the Festival without registering your work with the U.S. Copyright Office, the thought “How screwed am I?” may have just crossed your mind. Worry not because I have the answer: Not that screwed! Anything creative and original that you commit to film or paper is automatically copyrighted to some extent, whether or not you actually register the work with the Copyright Office. However, if you do properly register your work, it does come with a number of benefits (probably the biggest one being that it automatically puts the rest of the country “on notice” that you have created this work and are claiming copyright protection in it). Having a properly registered copyright will also be a great boon when it comes to proving up your chain-of-title. Speaking of which…
2. CHAIN-OF-TITLE. If your film does attract a buyer at TIFF, one of the things they will almost certainly want to see is your film’s chain-of-title. If you’ve bought a house before you may have heard this term too, and the idea is similar: Before someone hands a large sum of money over to you, they want to make sure that you can actually sell what you say you are. In the housing world, that means the seller has to show the buyer the history of every time the house has been bought or sold, so the new buyer can be sure no one else will come and try say they own the house. In the film world, it means showing your buyer that everyone involved in your project signed over their copyright interest to you (the seller). If you were the director of the film and you read the first paragraph about copyright, you may be saying to yourself, “Well I’m in great shape – I’m the director and I called all the shots so of course I already have all the copyright I need!” Unless you were the sole person working on the film though – the director, the only actor, the only writer, etc. – this wouldn’t be true. In the most extreme example, say you have a director of photography who frames all your film’s shots for you. Technically, he has a copyrightable interest in the way he positioned the camera and everything prior to rolling the film and, unless you had an agreement in place with this person that says they handed the copyright over to you, they can sue you for damages and potentially stop your movie from being shown or sold. Even if you did get all those agreements done and signed before flying up to Toronto, though, you’ll want to make sure you have them with you (or have access to them) so your sale can sail through.
3. TERRITORIES. One of the most important but still somehow most overlooked areas of a distribution contract is the territory. Usually a distribution contract will list a specific region (e.g. North America, Benelux, etc.) in which you authorize the distributor to sell and show your film. There are some unscrupulous buyers who may just try and snag the worldwide rights without explicitly stating a territory in the contract, so you want to watch out for those situations. Even a well-intentioned buyer, though, is interested in getting the maximum territory for the lowest cost. It may feel uncomfortable to tell a prospective buyer that you’re still exploring other offers (that discomfort is a great reason to hire a lawyer, by the way), but to the maximum extent possible you need to make sure that you give yourself a chance to find buyers who are best suited to deliver your type of film to the markets you want it to go to.
4. THE WATERFALL. No one’s going to throw you over Niagara Falls (at least I don’t think so), but there is a waterfall you need to watch out for: The one that explains how money from distribution of your film will flow from these far-flung territories back to you. It’s only natural for distributors to want to recoup as much of their investment as fast as they can, so in the section of the contract where they break down where all the gross receipts will go make sure you pay very close attention. They might try to pay themselves back an extra premium. They might try to charge-through in-house costs. And they might try to “recover” those “costs” before you start seeing any money. Fight hard to get as close to the first bite at the apple as you can!
5. THE MG. You really want to make sure to get a deal that sees you get paid an up-front minimum guarantee if at all possible (and many times it is). When and if you are offered a deal that accounts for an MG, you shouldn’t be afraid to ask for at least the amount you actually spent making the film – especially if you’re selling the rights to a major territory like North America. Of course if you have an expert on your team (or you just have a nose for this kind of thing) you may adjust your asking price significantly – it all depends on how the market develops for your film.
There are an infinite number of ways these issues may crop up, and there are just as many other possible issues that might affect whether you should take a deal or not. It is of course also much easier to read these tips than it is to actually apply them when you’re face-to-face with a buyer trying to close a deal over a plate of tortellini at Scaramouche’s. For all those reasons, you will almost certainly want to have a lawyer or agent or manager on your team as you gear up for this exciting time. Even if you do, though, at the very least now you know some of what you’re paying them for.
Good luck and I hope to see many of you soon!