June 30, 2005

Litwak's Latest: The Next Best Thing to a Lawyer

Risky Business:  Financing & Distributing Independent Films
By Mark Litwak
Silman-James Press
314 pps, paperbound $26.95
ISBN 1-879505-74-6

Mark Litwak continues to publish books that illuminate the legal minefield of motion picture production and distribution. His latest book was "borne from the frustration of observing talented young writers and filmmakers being taken advantage of, or watching them make mistakes that could easily be avoided." Acknowledging that independent film financing and distribution have become increasingly complex, Litwak wrote his latest effort "to help level the playing field" for the independent filmmaker.

The book opens with a brief and very practical "Filmmaker Self-Defense Checklist," which includes such common sense items as obtaining all promises in writing, registering works with the Writers Guild, watering down warranties, retaining negatives, getting insurance coverage and defining advertising expenses and protections against late payments.

Before getting to the particulars of financing and distribution, Litwak discusses and offers resources for organizing various types of companies, collaborations and co-productions. Templates for different kinds of contracts are appended to different chapters and they are also available on CD-ROM directly from the author. A wide variety of applicable contracts are also printed in Litwak's previous book from the same publisher, Contracts for the Film and Television Industry.

Financing options for independent filmmakers include loans, borrowing against pre-sales (a loan against distribution contracts), investor financing and distributor-supplied financing. Sample promissory notes for loans are printed in this chapter. Litwak clearly explains borrowing against pre-sale agreements and has provided names and contact numbers for current entertainment finance companies. The complexities of investor financing are thoroughly reviewed. For distributor-supplied financing, finders are sometimes used to help raise funds. A sample finder agreement is supplied here along with a template for an international distribution license agreement, a 33-page document that seems quite thorough.

After defining commonly used terms in the motion picture industry and providing tips on attracting investors, Litwak provides some creative tips and examples from his experience about "Tactics and Strategy for Arranging Distribution," a pragmatic wake-up call for indie filmmakers in which the author provides "a quick summary of how many distributors view the [independent film] marketplace." This chapter is worth the price of the book alone and, for neophyte auteurs, could prove invaluable in getting their masterpieces shown.

Working the festival circuit is reviewed and a nice list of film festival websites is provided. The entire second half of the book is taken up with the all-important distribution agreement. Litwak discloses principal terms, media definitions that are included in the language of distribution. Distribution is truly the area of filmmaking that potentially constitutes "shark-infested waters" for the independent filmmaker. Litwak provides a "filmmaker-friendly contract," which has been "the subject of negotiation and therefore the terms are more balanced--and more protective of the filmmaker--than the terms initially proposed by many foreign sales agents."

The distribution agreement is, by necessity, a voluminous document. Litwak's sample runs to 43 pages in the book and is appended with italicized sections of illuminating commentary. Example: "It is advisable to include a clause that whatever rights are not granted to the distributor are reserved to the producer." Or: "It is not unusual for a distributor to send a producer a contract lacking any distributor warranties. A producer will want to ensure that the distributor makes certain promises."

Chapter 7, "When a Distributor Defaults," covers factors in selecting a distributor, creative accounting, conducting an audit and dividing the revenue. Creative accounting pitfalls are enumerated, and the chapter closes with a "Filmmaker's Bill of Rights." The final chapter, "Looking Forward," is an overview of the current state of independent feature production. Two appendices to the book cover additional documentation for distribution and a resource list of production incentives available in the United States and internationally.

While no replacement for an attorney, this invaluable volume is an excellent basic education outlining many potential pitfalls for independent filmmakers in taking their products to market.

 

Ray Zone can be reached at r3dzone@earthlink.net

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