Lecture 10 - Professor Paul Lazarus PDF

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Professor Paul Lazarus...

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LECTURE 10

9-29-15 AGENTS, MANAGERS & ENTERTAINMENT ATTORNEYS 

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Agents  unlike lawyers, they don’t get paid by the hour o Get commission based on effecting the sale of their client o Ex: If their client gets $10 million compensation, they get a guild maximum of 10% of client’s compensation 3 S’s of being a successful agent: o 1. Ability to SIGN clients o 2. Ability to SELL clients o 3. Ability to SERVICE clients (attending to their needs 24/7 whether professional or personal) About 300 talent agencies in LA o Most are Boutique Agencies  represent only 1 category (ex: only movie composers) o Some are Major Agencies  International Creative Management Agency (ICM), Paradigm Agency, Creative Artist Agency (CAA)  Full service agencies = having a department to cover all their client’s needs and may have office around the world  Ex: concert department, commercial department, TV department, personal appearance department, new media department (gaming and virtual reality) Why do big name actors need an agency? o You owe them 10% of your commission… o They stay because of PACKAGING possibilities (being paired with the BEST directors, producers, other actors, screenwriters, etc.) o This cant be done by an entertainment attorney alone o The talent will end up with more money paying the 10% commission to their agent then if they didn’t have the agent Agencies are franchised by the GUILDS (writers, actors, producers) o Agencies are not permitted to charge more than a 10% commission according to Guild rules Hollywood attorneys are the ones to negotiate contracts (sometimes take forever) o A deal memorandum will be prepared and signed by his agent on the talent’s behalf o Legal risk: if the agent screws up the talent will leave him Working at an agency: o Financially rewards them handsomely o You need a special kind of outgoing behavior o They are an employee  get paid on salary, get benefits o ***The 10% commission gets paid to the AGENCY and then a portion of that gets paid to the AGENT in form of a salary

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Agencies like acquiring other agencies and getting bigger o Strange  because they don’t usually coexist well together o If an agency wants someone (who is starting up and looks like they have potential) who is currently signed with a smaller agency the big agency will buy it just to get that person When a client signs with an agency they don’t usually stay with them for a long time (sign in 3 year terms) o Out clause = if they don’t get me work within 90 days I can leave OR if I’m an established actor and they don’t get me work within my price range within 90 days I can leave o Talent has little loyalty to their agency If a talent gets a gig without the help of an agency they still have to pay the agency the 10% because they signed exclusively with them Big agencies are not interested in young/beginning actors, they stay with the smaller agencies Structure of Big Agencies: o Mail room  (where you start) purgatory – you deliver mail around the agency o Desk in a department  (Make an impression/show initiative) work for the department keeping notes at meetings, servicing anything they need o Working for an agent  listen to the agent’s dealings with a client and learn how they do it and how to make deals o Agent  franchised by the various guilds and begin getting clients “Responsible Agent” = the agent working directly with the talent and who signed them Many agents move laterally to studio jobs o Agents, managers, producers  sellers o Studio executives  buyers o BUT they all are looking for a good movie to make (interrelated) The power shifted from the studios to the agencies o Agencies controlled the packaging Clients are vulnerable to being seduced to join a new agency based on promises (whether real or not) Agency business is in FLUX  o Many are now public businesses o Some are private (where major shares are picked up by hedge funds) and have begun merging with big sports management agencies Agencies are always looking for ways to expand o It is hard because they are not allowed to produce the work of their clients The fundamental difference between AGENTS and MANAGERS: o The manager CAN produce a client’s work (not franchised by the guilds) but a talent agent CANT o Managers only have a handful of clients but has very close relationships with them (less as likely to leave a manager than an agent) o Managers get 15% commission (not franchised by the guilds)

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When you are a big agency representing big clients the last thing you want is an expression of interest from a studio (you know everyone wants him) o The agencies only want FIRM OFFERS  Entrainment Attorneys  o Draft acquisition of rights for actors among other documents o Drawn to this area of the law because its fun and glamorous o Deal with big egos o Typically move on to studio jobs 50% law, 50% leverage in entertainment business...