5 Things Producers Should Do When They Can’t Produce | PRO Insight

The coronavirus pandemic has created new challenges … and opportunities

My law firm was representing around 50 feature and series productions when the COVID-19 pandemic forced all physical productions to a screeching halt. My conversations with producers have shifted from a busy and manic production slate to conversations about homeschooling and contemplating how long the shutdown will continue. Everyone is trying to map out what’s next.

Producers cannot “produce from home.” In the upcoming days, producers will settle the logistics and liabilities of their existing projects into a suspended, postponed or shut down status while the end date remains unknown. So the question in the next few weeks is, what should producers do when they can’t produce. Here’s my advice.

1. Ask whether Force Majeure applies and how

Producers should review all of their active development and production agreements to see if there is a Force Majeure provision and question how it covers this pandemic. A Force Majeure provision allows the contract to effectively go into some form of “time out.” Contracts vary but the understanding among the parties is if “bad” things happen outside of the control of either party, then there is a mechanism to allow for suspension of the term, suspension of payment and/or termination after a certain period of time.

Depending on the type of deal, producers must determine for their active productions whether or not to exercise Force Majeure while understanding the implications of making such election. With respect to development deals, producers should consider utilizing Force Majeure provisions to extend option terms, writing periods and other development periods.

While Force Majeure provisions often are not covered in short term shopping and attachment agreements, you should approach these agreements with the same thought process. Everyone is dealing with this issue, so provided there is grace and goodwill on both sides — parties may be willing to extend less formal agreements as well.

2. Weather the storm, expect the avalanche

While producers need to be prudent in their overhead spend and choosing where to allocate their time and financial resources, they also need to be disciplined and poised to be ready to go when productions resume. Right now the hardest hit are the physical productions, but the supply lag will catch up to distributors in the next three to six months and the demand for content will be inevitable.

Some of this planning involves maintaining staff and resources and also reconfiguring the rest of the year to adapt to this unforeseen suspended period. An adjustment some of my clients are preparing for is if they are able to commence preproduction over the summer then they are anticipating that there will be little to no downtime in December when historically the entertainment industry shuts down for two weeks.

3. Be opportunistic but flexible in packaging current projects

Now is an excellent time to attach key elements — like directors and actors — to a project that is actively packaging, provided that producers are willing to offer flexibility, particularly with timing. In contemplating attachment terms, producers should be willing to offer up flexible periods for the attachment, shy away from hard and fast shoot dates (particularly if tentatively scheduled in 2020) and allow for the attached element to have some protection or set up with financial terms either by setting the rates at market or allowing for direct negotiation with the third party financier.

4. Look for distressed development opportunities

Whether producers are engaging a writer below their quote or securing book or article rights under a free shopping agreement — now is the time to develop at a low cost. Everyone is working from home right now so the more a producer can be simplistic and straightforward in their deal structure, the more willing reps, writers and rights holders may be to afford some reduction in their normal asks regarding up front writing and/or option fees.

One thing to note is that some reps may also have a “wait and see” viewpoint about committing during this uncertain period. A producer should be cognizant of the motivations of the rights holder or writers to contract now — whether financial or because it is a slow period, producers should come prepared to pitch a simple yet compelling reason why they can produce and push a project along during this time.

5. Practice distance socializing online

Use this opportunity to reconnect with former colleagues, partners, actors, directors and writers who are all just sitting at home. Whether by phone calls or Zoom, use this time to accumulate information as to where they are and how you can work together in the future. Also in the day-to-day of scheduled conference calls and conducting ongoing business, you should recognize that there are moments when colleagues, reps or talent may want to spend a few more minutes socializing and commiserating.

We are all experiencing a surreal event and remaining connected and humanizing each other is essential. My clients have also begun conducting typical pitch meetings online as buyers are adapting to accept pitches remotely. Be prepared and willing to sell you and your project outside of a face-to-face meeting.

The great thing about producers is that they are entrepreneurial and conditioned for challenges and obstructions to making their project happen. Producers have successfully produced through other recessions, from 35mm to digital, from VHS to SVOD and now they can add a pandemic as another challenge they had to overcome.

 

Elsa Ramo

Elsa Ramo

Elsa Ramo, managing partner of Ramo Law LLC, is an entertainment lawyer who has represented over 100 films and 50 television scripted and unscripted series in 2019 alone.



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