Greg Answered:

The reasons many “terrific films” disappear without a trace is that a good film is not enough today for distributors. Cast is essential. With many films to choose from, they will take the one with bigger cast over a better film every time, because the cast gives them a level of certainty as to results. At the end of the day, it’s a business. And when the consumer sees the lesser movie, they don’t know it’s the lesser one since they don’t have anything to compare to. So if you can find the way, raise more money and get cast. If you don’t have the money, then the likelihood is it will be a festival film, with some small video and tv showing. The reason you form a corporation or LLC to make the film, and get insurance, is to protect yourself individually against liabilities should something happen. Accidents happen on virtually every film. Some big, some small. Most equipment rental and locations will not do a deal with you if you do not have insurance. And then there is worker’s comp insurance which is mandatory. As for cost, it varies depending on numerous factors.

Greg Answered:

“Film and Broadcast Terms” by Edmund Penney has many definitions of film terms, including many crew members. Most of the guilds have definitions. Such as the Producer Guild has a definition of a producer and the DGA has definitions of what an AD, UPM etc .

Greg Answered:

Writing services by the author would typically be in the same agreement , but it can be done either way. Part of the decision might depend upon whether the writing is WGA, where it might be better to have the writing in a separate agreement just to make it cleaner. Leave the decision to your lawyer. As for pricing, typically there is not a break on the fees, but then I doubt the author is an accomplished screenwriter so you should not be paying top dollar. Moreover, you can usually use the fact the author wants to write the script as leverage to bring the price down.

Greg Answered:

From the wording I gather it’s a submission release. While a few companies try this approach, I always recommend staying clear of companies that even try this. Yes, you are correct that by signing it, they can do what they want with it and only pay you WGA minimum.

Greg Answered:

Not quite. Assuming you “roll over” in the same company in the same year, and make the film in the same year, you might be able to cover the cost via Section 181 (allows 100% write off the film the first year, up to $15 mil). There is no rollover the way you are thinking (and I believe that rule on houses went away as well about 10 years ago). It just a matter of having an offsetting write off the same year. A lot depends on what kind of an entity you are, what year you get the money on the first film and if you can make the second one in time, etc. You need to talk to your tax accountant or tax lawyer about all this.

Greg Answered:

Oh, absolutely have film makers been arrested by the SEC. And the FTC, state versions of the SEC, Postal Service (mail fraud), and on and on. Most of the time they are not arrested, however, for not following the rules. Its only the scams or where a lot of people complain, is there an arrest. Instead they are just fined and barred from raising money ever again, not to mention the civil lawsuits. The first thing I must say is you must get an experienced lawyer to guide you. But here goes with a general summation of what you are asking: The issue of passive vs active goes to the legal question of whether what you are offering to investors is a security or not. If not, then many of the rules don’t apply. This is a game tried for ages. But that game is the one that the SEC and other agencies crack down on the hardest, because they fell that someone is clearly trying to skirt the rules. I have seen many offerings structured to be “general partnerships” or other vehicles where the investor appears active. They eventually get caught. Bottom line is that if you are asking someone for money and they are not going to be a significant part of the day to day operations and decision making, its likely a security. If you are asking a bunch of people for money, its absolutely a security as there is no way they all can be as active as required by the rules. Second, SEC approval goes to public offerings, not private placements. Private placements are “exempt” from the registration and approval process with the SEC (and most states too). Whether the offering qualifies as exempt or not depends on following various rules. Like you probably heard of Reg D, etc. One SEC case I remember very well from the early 90’s was a group of filmmakers in Texas who took out an ad in a newspaper asking for investors for their film. The SEC came down on them for fraud, failing to register a public offering and on and on. All from one ad. How? Ads to the public are not permitted under private placements. So the offering was not exempt (count 1). The offering was not registered (count 2). And that one page ad did not have the 50 pages of disclosures required (hence fraud for failing to properly disclose), etc. (count 3), and on and on.

Greg Answered:

What one is willing to pay for a script (or in this case a treatment), depends on a number of factors. WGA minimum only applies if the writer is WGA (and the film company agrees to become a WGA signatory in which case it has to pay at least the minimum), but those minimums serve as a nice guide. The fact that a foreign based company wants to buy it definitely can influence the price. If the company is buying it to make as a local production, local prices apply, not US prices. On the other hand, if they are buying to make it into a worldwide film, then maybe US prices apply. The next factor is what you have earned on your sales before. Another factor, to some degree, is the budget for the film. A treatment alone is not as valuable as a script. Current WGA minimum is only $20,000 for low budget ($5 million budget film) and $30,000 for over that. That said, I have had clients sell full scripts for less than that given various factors. Before anyone can really tell you want to ask for, you need to research the going prices for similar projects in Hong Kong (you will probably only find out prices for the full scripts, not story alone. The story is usually about 1/3 of the total) . I would suggest that in addition to whatever you can get for the story, you try to negotiate a script writing deal, which then can lead to getting bonuses and other compensation.

Greg Answered:

There are all kinds of restrictions on “offering” securities for sale (raising funds) via public forums, newspapers, ads, etc. I highly suggest talking to a competent securities law lawyer before embarking on any fund raising, as there are various rules, including disclosure documentation , that must be followed.

Greg Answered:

You need a certificate of employment or similar document to make sure what he is doing for you , you own and can use. The part about him being able to use it for his personal marketing is something a lawyer will have to draft for you. So, overall, I suggest you seek a lawyer’s advice to obtain the proper documentation.

Greg Answered:

If you are a full time employee, then it would be common to have you exclusive. The logic being, why should you keep the good projects for yourself, or distract you’re your job. Sometimes I have negotiated some exclusions for existing projects to work on off hours. Otherwise, you have to bring the project to them first and get their ok to develop independently. As for my legal fees, retainers etc, please email me directly to discuss.