Entertainment Attorneys

Almost all of the major entertainment attorneys understand only the studio and network worlds. The normal scenario goes like this: someone makes his or her client an offer, usually to the client’s agent, and the attorney participates in negotiating a contract. When it comes to the world of independent films, very few mainstream entertainment attorneys possess the knowledge or understanding of what the market values are for these films, much less the market value of actors, writers, directors, and producers—nor do they generally care. Attorneys are high-paid employees of their clients (although many of them act as though their clients work for them), and their standard orientation, expertise, and understanding center on how to negotiate employment contracts with the majors, who are the employers, and on how to secure the most lucrative terms possible, particularly if they are working on a commission basis. Consequently, if attorneys try to impose studio terms onto small, independent films, they generally become impediments to the successful progress of a small production.

Agents

Most agents don’t understand or care about the independent movie business. They are commission salespeople who, like studio producers, understand the bureaucracies and politics of the studios and networks—where they make the bulk of their money. The independent business is somewhat of an afterthought for most of them, although they are prepared to participate in it to some extent, since independent films, particularly in recent years, have generated considerable prestige and critical acclaim for talent, which is good for the agents and agencies. They also participate in the independent sector because many of their clients have cherished pet projects that have been turned down by all of the major studios. Turning to the independent market is a way for them to get such noncommercial films with name talent made outside of the studio system and helps them to mollify their star clients. The independents also provide jobs for unemployed agency clients while they wait for the next big studio or network gig.

Independent producers must realize that, once a script or film project has filtered down to them from a major talent agency, it has probably been passed on by all the major studios and mini-majors, as well as everyone else in Hollywood. Only then do agents go fishing in the pool of independents to see if they can entice someone to bite. As a rule, they have no regard for the ongoing success or wellbeing of independent production companies or producers. In general, they are interested only in the here and now—the Janet Jacksons of the film industry (“What have you done for me lately?”). I have personally witnessed agencies cajole, muscle, and blackmail naive independent producers or deep-pocketed investors who have just arrived in Hollywood into making thoroughly noncommercial films, just to get “in” with the agencies. These movies are often made at the expense of producers, financiers, or independent companies that are trying to establish a relationship with one of the larger agencies, but by the time the aspiring producers have gained their much-desired “in,” they are so broke or disenchanted with the business that they flee, having lost all of their money and most of their faith in humanity.

I have seen corruption, threats, favoritism, drugs, sexual favors, extortion, nepotism, bribes, kickbacks, payola, cooked books, forgeries, and anything else you might imagine perpetrated by agents. There is an old adage in the film business: “How do you know if an agent is lying?” Answer: “His lips are moving.” On the other hand, over the years, I have also met some wonderful, nurturing, and caring agents with a true eye for talent and career guidance. What little innocence there is within the entertainment business exists in the hearts and minds of the creative talent and those few creative, visionary agents who nurture that talent.

Protect Your Investor

I’ve already stated several times that if you are ever lucky enough to find an independent financier who is willing to invest in your film, protect him or her at all costs. Make the right film for the right price. Make sure that your investor gets a return on his or her money. Be cost effective at every turn and keep the investor interested in future projects. This is not only the ethical thing to do, but a wise, ongoing business plan for an independent producer who may enjoy a mutually beneficial relationship with a financial partner for years to come. Protecting your investor can provide you with a source of finance for your films and years of gainful employment for you and others. So, rather than trying to hustle a potential backer for a one-off fee on a noncommercial money-loser, be smart and think long term. And if you have your heart set on making a black-and-white docudrama about a sociopath who runs over small animals with his car (a film student at Southern Methodist University actually pitched me this concept!), make a few successful films with your investor first, then use your own money to indulge your whim if you still need to get the idea out of your system.

Producers and Filmmakers Need to Understand Actors

The business of entertainment is even more of a mystery to most actors. They tend to be financially naive and sheltered from the business side of things, with their main lifeline and connection to the industry being through their agent, manager, or, in some cases, attorney. Most actors, except for some major film and television stars, have very little, if any, understanding of how the business works, how and why certain projects are given a green light while others are not, where the financing comes from, or how distribution works.

People think that there are huge dollars to be made from acting. In reality, only about one in every hundred professional actors makes over $100,000 a year. Most of the rest earn below the poverty level from acting gigs and are forced to supplement their meager income by taking a variety of other jobs while waiting for their “big break.” The myth of every waiter in Hollywood being an out-of-work actor is not really a myth at all.

Actors’ Quotes

In 2004, I made a film with an actor who had once been a significant star, but his career had faded somewhat and he was now doing independent films. His “quote”—or “rate”—was $1 million per movie, based on a four-week shooting schedule. When talking to the actor’s agent, I offered his client the co-lead in my movie and agreed to pay his weekly rate of $250,000 based on a four-week schedule, but with the caveat that I needed him for only two weeks so would pay him only $500,000. I was able to convince the agent that we were maintaining the actor’s quote of $1 million for four weeks. He was merely working half of that time. The plan was to shoot six-day weeks, and the completion bond company required two free days, if needed and used, as part of the deal. The entire picture had a twenty-day shoot, based on three six-day weeks, plus two days in a partial fourth week. I got my star-name actor for fourteen of the twenty days for 50 percent of his standard rate by negotiating shrewdly.

Sometimes you have to use psychology during negotiations—you should always look for ways to allow agents and talent to save face, especially when you have secured an actor’s services for less than their quote. Every actor and agent is afraid of word getting out that an actor’s price has dropped, for fear of never achieving their established quote again.

Actors’ Language

We have discussed that producers, directors, and filmmakers need to learn the various idioms and terminology of the movie industry. Likewise, it is important to realize that actors speak many different languages, depending on the training they have received and the techniques they have studied. A great illustration of this is from the 1976 film Marathon Man, starring Sir Laurence Olivier and Dustin Hoffman. Olivier trained at the Central School of Speech Training and Dramatic Arts in London, whereas Hoffman studied at the Actors Studio in New York, where he was trained in “the method.” These are two diametrically opposed schools of acting: the former is very external in approach and technique, while the latter is very internal and relies on evoking “organic” emotions through imagery, sense memories, and personalization. Imagery could be something as simple as imagining a half-full hot-water bottle and mimicking its behavior to give the appearance of drunkenness, rather than playing drunk. A sense memory could be recalling a childhood incident to generate the feeling one had in that moment, and then carrying that emotion into the scene. Personalization involves transposing someone from your own life, such as a lover, a family member, or an enemy onto a fictional character.

In one famous scene from Marathon Man, Olivier’s character, a Nazi war criminal, tortures Hoffman’s unwitting history student by drilling into his teeth and hitting exposed nerves with no anesthetic. As the story goes, Olivier saw Hoffman sitting on his own, putting himself through apparent emotional angst prior to shooting the harrowing scene. Olivier asked his young co-star: “What on earth are you doing, my boy?” Hoffman answered, “I’m doing a sense memory, Larry, preparing for the scene.” Olivier observed Hoffman’s preparatory machinations a moment longer and then retorted, “Why don’t you try acting, my boy?”

It’s a great story, but imagine the director, John Schlesinger, dealing with and directing these two great actors who were trained in two completely different disciplines and spoke vastly different languages regarding their craft. He also had to learn how each actor worked in order to achieve his desired results. Schlesinger had to learn the language and understand the essence of “the method” in order to communicate effectively with Hoffman in a way that the actor respected, understood, and responded to, based on his training. And he had to communicate with Olivier, who spoke a completely different language, in a totally different way.

Casting

Actors naively think that a successful audition is always about their performance. They would be shocked if they could sit in on a casting session and see how truly random some producers’ and directors’ choices are. Casting often has more to do with mixing and matching physical types, meeting the ethnicity requirements spelled out in certain SAG contracts, and many other factors, than it does with pure talent. When SAG financially incentivizes a low-budget production to hire a specific gender, age, or ethnicity of actor, rather than the most talented performer or the actor who is most suited for the role, it disserves to the talent of the actor but it certainly helps the independent producer (more on this later).

Sometimes a producer and/or director may look for the strongest actor for a role regardless of physical type, whereas at other times a certain physical look could be the key criterion for casting. In the former case, performance and audition are critical; in the latter, appearance is critical. However, in most cases, particularly as the casting process drags on and supporting roles and day players have to be cast, the process becomes far more arbitrary, with most filmmakers just wanting to get it over with as soon as possible. However, there are wonderful instances when an actor walks into an audition and knocks your socks off, and you hire him or her immediately. This is a mutually fabulous event whenever it happens. The actor is cast based on ability and the producer and director are delighted to end the tedium of casting.

Choosing a Representative and the Rates You Pay

The industry standard for creative talent—including writers, directors, actors, and some producers—is to pay an attorney 5 percent of earnings for standard transactional legal services. A 5 percent fee to an attorney amounts to a lot of money, unless the client is a famous writer, director, or movie star and does not have an agent or manager. I advise always paying your attorney an hourly rate. As a person trying to “make it” in the entertainment industry, you need to find an agent or manager who truly believes in you and your talent and establish a personal relationship and bond with him or her. Talent needs someone who genuinely believes in their ability and cares for their wellbeing.

Business Managers

Business managers exist to “manage” the assets and income of their clients. They generally charge 5 percent, and I myself paid that amount to a business manager for a number of years. Had I opened my own envelopes, written my own checks, and paid a few hundred dollars for an accountant to file a tax return, I would have saved enough to buy a new car every year. A better way of saying it is that I started making and saving money when I stopped handing it over to other people and became the master of my own fate by taking charge of my own affairs. Take charge from the beginning. Trust yourself. Learn your business well, whatever aspect of the entertainment industry you choose to pursue.

Managers

You must understand the concept of agents and managers. Although, under federal law, talent managers cannot procure employment for actors, they can certainly set up meetings, get feedback, and turn negotiations over to an attorney or agent to make a deal. (Management contracts distinctly state that managers are paid to give advice and counsel to their clients, but may not procure employment.) My opinion is, if creative talent has a manager who truly cares and believes in him or her, the manager should receive 10 percent, while an hourly fee should be paid to an attorney to negotiate and close deals. There is no need to pay an additional 10 percent to an agent. On the other hand, if one is lucky enough to find an agent who has a similar personal interest, that agent can set up meetings or auditions, negotiate, and close deals without any need to pay for a manager or an attorney. Most of the larger agencies also have in-house attorneys who can provide legal comment on clients’ contracts.

Insecurities and Common Sense

Creatively talented people are notoriously insecure, and many in Hollywood prey on those insecurities; hence the rise of the duplicative services of talent agents, attorneys, and managers. Consider this: if an actor is lucky enough to be in the approximate 1 percent who makes $100,000 a year and pays his agent 10 percent, an attorney 5 percent, a business manager 5 percent, and a manager 15 percent, that is $35,000 off the top every year. The actor, left with $65,000, will still be in a top-tier tax bracket, which will entail paying approximately 41 percent in federal and state taxes (assuming they live in California). Not factoring in any business deductions after the actor’s reps and taxes, that $100,000 in gross earnings has now been reduced to less than $40,000. That breaks down to about $3333 per month for living expenses. A one-bedroom apartment in a modest part of Los Angeles will cost $1500 per month. That leaves $1833 per month for food, car, clothes, insurance, gas, travel, phone, and much more. That’s pretty paltry for someone who ostensibly earns six figures per year. Look at it another way: paying an agent 10 percent, not employing a manager or a business manager at all, and paying an attorney an hourly rate only if and when needed, the same actor would net approximately $53,100 per year ($4425 per month)—27 percent more.

Save Yourself

I strongly advise directors, writers, and producers not to overextend themselves financially. Freelance talent cannot afford to spend money in the same way as those who have the job security of permanent employment. Freelance talent cannot rely on regular paychecks and may remain unemployed for many months, if not a year or more. So my rule of thumb has always been to save money. Save at least one year’s living expenses, set the savings aside as a sacrosanct emergency fund, and do not touch it unless to live on between jobs. Consider yourself broke if you have less than that in the bank. Do not leverage. Do not finance. If you cannot pay cash for it, do not buy it. If you are hired for the pilot for a new television series, don’t run down to the showroom and buy a new car or put a down payment on a house. The majority of pilots are never sold as series, and you may lose your new house or car.

At the end of every fiscal year, scores of guild-member directors, producers, actors, and writers scramble, scheme, scam, and beg for any employment that might bring their earnings and pension, health, and welfare contributions up to the bare minimum to qualify for their respective union medical plans. Those who can’t meet the requirements are probably barely earning minimum wage, without even factoring in the deductions of costs for agents, managers, entertainment attorneys, and/or business managers.

Directors, writers, and writer/producers, unless they are working as show runners on hit television series, are usually freelance workers. Directors tend to focus on trying to get the next job, while writers concentrate on trying to sell a finished script or getting a new assignment. There are times when both writers and directors will create and/or identify a project that they will try to package and pitch to producers, studios, networks, and distributors in order to create employment for themselves, but the pitfalls are many, the success rate low, and, as we have already discussed, you are left at the mercy of others.

Many people have felt victimized by the entertainment business, but that can only happen if you allow it to happen. Do not be a victim. Take your life and your livelihood into your own hands. Be proactive. Be tenacious and resilient. Conceive an idea, breathe life into it, will it into existence, then see it through to completion.