The Roles of the Independent Producer

Any definition of "film producer" is inexact at best. But there is a reason for this. Film producers, like others involved in the film business, are defined by what they do. Producers, as we will see, have many functions, and their contributions are simultaneously more complex and also more ephemeral than the functions of actors or directors.

Even the courts have had a difficult time defining "producer". While at Orion Pictures, Mark was the lawyer responsible for the Richard Gere/Francis Ford Coppola film "The Cotton Club", released in 1983. A disgruntled "co-producer" of that film tried, at the last moment, to block the opening of the film because she had not received a "Co-Producer" credit. The "Co-Producer" filed an action in Federal Court in Los Angeles seeking a court order prohibiting the release of the film in theaters. She argued that the public would be mislead if the film was released without her credit. The Orion lawyers argued, and the Federal Court agreed, that the public would not be mislead, since no one knew what a producer (or "Co-Producer") did! The result would have been different, the court said, if Orion had launched the film with the credit "An Alfred Hitchcock Film", and Hitchcock had not directed the film.

When we discuss independent films we are referring to pictures designed for release in movie theaters that are not produced and distributed throughout the world by one of the eight major studios: Disney, Dreamworks, Fox, MGM, Paramount, Sony, Universal and Warner Bros. Typically, independent pictures are financed by "pre-sales" contracts from distributors that are discounted and cash flowed by a bank, and often supplemented by private money, and, if they qualify, from subsidies and tax incentives from abroad. The budgets range from tens of thousands of dollars to over $30 million, but the vast majority are produced for $200,000 to $10,000,000.

Independent film producers are a relatively recent phenomenon. Up until the 1960's or so, virtually all films were produced by major studios. With the advent of the non-studio film (such as "Billy Jack" and "Easy Rider"), non-studio film producers began to supplement studios in terms of producing movies (but still the same the major studios continued to dominate development, financing, and distribution). Today there are an estimated 1500 independent films produced each year in the United States.

The most important difference between an independent producer and a producer who works on a studio picture is that the independent producer is responsible for handling an entire additional set of legal, business and financial roles that are customarily handled by studios on pictures produced, financed and released by the majors. Failing to understand those added roles can lead to disaster. One of us recently had an interview with potential clients who had produced a parody of a recent film phenomenon and had done so on a shoestring budget. They had an offer for ten times their negligible investment from a British video distributor. But there were a few problems. The title was not available for use without potential legal jeopardy to the video distributor. There were no written agreements with anyone involved, so the potential clients could not establish chain of title. Additionally, with the title problems and chain of title problems, the production could not qualify for errors and omissions insurance, which the U.K. video distributor would surely require. The film was, in a word, undistributable. To go back and try to fix the problems may have been possible, but would have cost the potential clients substantially more than the movie cost itself. The potential clients went away, sadder but wiser, with the film canister under their arm, and no hope of having their film distributed.

Although this was an exceptional case, a great idea for a movie is worthless without proper business and legal implementation. In implementing the business and legal management of producing a movie, there are seven primary functions which the independent film producer has: (1) business owner/manager; (2) project developer; (3) project packager; (4) project financier; (5) physical film producer; (6) distributor/distribution arranger; and (7) distribution and asset manager.

     1. Business Owner/Manager. If you have never set up and operated a business, you will be dazed by the myriad rules, regulations and forms to fill out. You additionally face legal risks of being sued, not only by third parties, but even by your employees and independent contractors. In Section 6 we discuss the basic steps in setting up your business. A fundamental management function of an independent producer is making deals. In Section 4 we discuss the basics of deal making, including what are the necessary terms to negotiate, and what paperwork is required.

     2. Project Developer. You must also "develop" your project to the point when it can be produced and financed. Your job in this role is to write or supervise the writing of a screenplay which can attract a director, cast and financing. If your screenplay is to be based on material owned by someone else, you need to option or acquire the rights. If you are "partnered" with or hiring writers, you need to own the screenplay which is created. Legal representation is in most circumstances is mandatory at this stage. The development process is discussed in Section 2.

     3. Project Packager. Once you have a completed screenplay, your role becomes "packaging" the film and securing the financing. The film "package" consists of the script, director, producer (you), and cast, as well as the budget and production schedule. The budget and schedule are malleable to some extent and can be changed and adapted as time goes by. However, it is always a good idea to have a budget range in mind during the development process. You cannot expect to shoot a huge action piece with special effects and costumes on a $2 million budget.

The most difficult part of the packaging process is attaching the director and actors. This is discussed in detail in Section 4. Although it is simpler if you act and/or direct yourself, unless you are Mel Gibson, it is less likely that your directing and acting talent will attract financiers. The fundamental issues are when and how to get talent. Section 4 gives some guidance on appropriate strategies.

     4. Project Financier. If you are lucky (and persistent enough) to attach a director and star, you still need production financing. Sources of independent financing are family and friends, equity investors, distributors (domestic studios and foreign sales agents), banks, and foreign subsidies and tax incentives, all as discussed in Section 5. During this process you absolutely need a lawyer to navigate you through the financing minefield.

     5. Physical Film Producer. Once you have a script, director, cast and financing, you are in a position to make your movie. In Section 6 we discuss how to set up the production, including setting up your production company, hiring employees or engaging independent contractors, setting up accounting and payroll services, becoming signatory with the talent and craft guilds, finding your locations, and clearing the script and title. These events occur during the very hectic "pre-production" process which typically is the last six to eight weeks before principal photography starts.

Once photography starts you are responsible to make sure that you get the best performances from your director, cast and crew, while at the same time keeping your eye on the money and the clock as your financiers and the completion bond company will expect.

In post-production your job is to take the shot footage, help edit it into a storyline within your time frame (usually 90 to 120 minutes), and add and balance the music and sound effects, all the while keeping your finger on the money pulse. As discussed in Section 16, it is imperative that you create and safely store all the physical elements you will need for delivery, as well the customary "paper" items needed for delivery to distributors.

     6. Distributor/Distribution Arranger. By definition, independent producers do not act as the distributor of the film. Distribution is still dominated by the Hollywood-based major studios who generate more than 90% of U.S. box office, but both in the United States, and particularly in international territories, there are scores of smaller distributors and independent sales agents who handle independent productions. Your job is to secure the right ones for your particular film. We discuss that process in Sections 5 and 6.

     7. Delivery/Distribution/ Manager. Once you have a distribution deal in place, your job is still not done. You still have to "deliver" the film as discussed in Section 16. Delivery is a technical term and consists of supplying both physical elements such as the interpositive, internegative, sound tracks, video masters, stills and slides and paper elements such as copyright registration, rights documents insurance, copyright and title searches and talent agreements that meet the distributors' requirements. You may think you have finished the film but until you have supplied all of the delivery elements, you won't be paid.

Once the film is delivered, there is still the job of managing the distribution. It is likely you will be involved in advertising and marketing decisions--will have input on the trailer, marketing and publicity campaigns, one-sheet (a slick poster-size sheet that includes the key art and credits of your film), and other advertising materials, and, in some cases, how the picture will be released in theaters. If you have a foreign sales agent, you must also make sure that the foreign sales agent makes appropriate deals, delivers the film to its subdistributors, collects the money and remits your share to you. There are also accounting functions during distribution. If you are lucky enough to make a worldwide deal, a worldwide distributor will typically assume the tasks of paying guild residuals and profit participations. More likely, however, you will have the accounting job, and will have to account to and pay for residuals and profits.

Additionally, after you deliver your film, you still must monitor the statements from the distributors, and manage the remaining assets which are not being managed by the distributor. An often overlooked asset is music publishing. If you own the music in your film, and there is a soundtrack album, or the film is exploited on television, you can receive additional revenues as the owner of the music. Again, managing this asset is best done by professionals (preferably a music publisher). This is discussed in Section 13.

Another additional asset to manage is the right to prepare "derivative" productions which stem from your production, such as remakes, sequels and television programs. Often your domestic distributor (but rarely your foreign sales agent unless they put up financing) will have a negotiation position on these rights. Unless your production is a hit, it is unlikely these assets will be worth anything. Still, a film relatively unknown outside of France, "La Cage aux Folles", spawned both a stage play and a successful remake ("The Birdcage").

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