Entertainment Law Services

Intellectual Property and Media Law Term Glossary


Acquisition/Distribution Agreement
The agreement deals with the terms which will govern the distribution of the film. It is an agreement between the producer and distributor.
Additional Insureds
Persons, other than the primary persons or entities, covered under a production insurance policy.
Adjusted Gross
This is a profit participation (see below) definition for profit participants (see below). This definition may vary from film to film but, in general terms, it is gross receipts minus certain deduction for prints and ads, taxes, etc.
Bankable Distribution Contract
A film distribution agreement capable of securing bank financing.
Bankable Presales Commitments
Presales commitments for distribution of the film. These commitments are from bank approved distribution companies or ancillary market entities.
That portion of the budget involving the actual physical production of the film. The below-the-line budget does not include producer, director, talent or literary acquisition fees.
Blue Sky Laws
State laws relating to the offer and sale of securities.
Most films require completion bonds (see below). Producers, directors, actors, line producers are bondable when they have a history of completing films on time, on budget and under the parameters of the distribution agreement.
When the box office and other sales of the film equal the costs associated with producing and distributing the film.
Cast and Crew Insurance
Insurance covering the expenses and delays associated with the death, illness or injury of the director, an actor or crew member.
Certificate of Authorship
A chain of title (see below) document allowing the purchaser to register copyright with the U.S. Copyright Office. It attests to the authorship of the literary work either because the writer states that the work is original to him, or because the writer attests that the work was a work for hire (see below).
Chain of Title
The conveyance history of the literary property from the first rights holder to the present rights holder. This is witnessed via the certificate of authorship, option agreements, purchase agreements, copyright registration certificate, title searches, assignments and legal opinions.
Security for a loan, which is usually an asset of some sort i.e., the finished film, the copyright to the underlying literary property, the right to distribute the film, etc.
Completion Bond/Completion Bond Company
An insurance policy which guarantees that the film will be completed on time, on budget and within the parameters dictated by the distribution agreement. Prior to bonding the film, the completion bond company will assess the production in relation to the budget, days allocated to accomplish the process, talent, above-the-line participants, key crew personnel, etc. The completion bond company may require additional shooting days, additional budget, less compensation to the producers, changes in the script, different key crew members and the like. If the film starts going over budget or deviating from the distribution agreements terms, then the completion bond company will step in and take over the production.
Comprehensive Liability Insurance
Provides protection against physical injury or property damage during production.
Compensation which is not owed unless the film is in a profit position or until the film reaches a predetermined level of sales
Contingent Compensation
This is a profit participation (see below) definition for profit participants (see below). This definition may vary from film to film but, in general terms, it is gross receipts minus certain deduction for prints and ads, taxes, etc.
A film produced through the cooperation of two or more production entities
Co-Production Financing
Two or more production entities share the responsibility of financing the film.
Federal law which protects works of art, i.e., films, music, plays, art, literary works, etc., from infringement by others. It prohibits others from using the work without the author's permission. Current copyright protection is for the author's life plus fifty (50) years. Authors may register their works for copyright by filing a registration form with the U.S. Register of Copyrights.
Copyright Assignment
A written agreement. This is filed with the U.S. Register of Copyrights
Copyright Certificate
A written document from the U.S. Register of Copyrights which attests to copyright registration.
Copyright Search
An investigation as to the copyright ownership of a particular work. This search may be done directly through the U.S. Register of Copyrights or Thomson and Thomson, a firm which specializes in copyright searches.
A legal business entity created under the laws of the state. Ownership is evidenced in stock. Shareholders have limited liability in that they generally cannot be sued personally.
The list of names and titles which is seen at the films start, end, or in advertising
Deal Memo
A short formed version of a contract which contains abbreviated terms. The parties usually anticipate that the deal memo will be replaced by a long form agreement (see below)
Deferred Salaries
Salaries which are not paid until some future point in time usually triggered by the occurrence of a predetermined event i.e., investor breakeven, film's breakeven, etc.
Delivery Date
The day stipulated for delivery of the completed film.
Directors Guild of America. If a production company is a signatory of the DGA, then they provide the director no less than DGA minimum in terms of salary, work conditions, travel, accommodation, per diems, etc.
Director's Cut
The film as edited by the director.
Information, which must be disclosed to potential investors, regarding the film and the risks associated with the investment (see below).
Theatrical, video, cable, television selling and/or licensing of the film domestically and internationally.
Distribution Agreement
The expenses associated with the distribution of the film. The distribution passes these expenses along to the producer and they are deducted from the moneys owed to the producer.
Distribution Expenses
Compensation which is not owed unless the film is in a profit position or until the film reaches a predetermined level of sales
Distribution Fee
The fee charged by the distributor for distributing the film
A person or entity in the business of selling or licensing films domestically or internationally.
End Credits
Credits (see above) seen at the end film.
Equipment Insurance
Insurance which covers loss and damage to rented or owned equipment.
Equity Financing
Raising money through private individuals by offering stock in a Corporation (see above), membership shares in a Limited Liability Company (see below), or units in a Limited Partnership Agreement (see below).
Error and Omissions Insurance
Insurance which protects the production company, producer and other named insureds against lawsuits for copyright infringement, defamation, invasion of privacy, unfair competition, breach of contract, etc.
Escrow Agent
Someone who is not a party to a transaction may be designated to hold production moneys until some specified event occurs i.e., an actor may require that their money be held by an escrow agent to make sure that it is not spent before it is paid to her.
Exempt Security
A security which does not require SEC (Securities and Exchange Commission) (see below) registration.
Favored Nations Clause
A clause in an agreement which states that no one else in a similar position will receive more favorable terms i.e., no other actor will be paid more, will receive a larger credit, better trailer, larger hotel room, etc.
Final Cut
The final edited and mixed version of the film. The final cut may be the director's, producer's or distributor's depending on who has more power and prestige.
Finance Charges
Costs associated with a loan or fees paid to finders of money.
Persons or entities capable of financing a film or raising money.
Person or entity who introduces the producer to a financier.
Finder Agreement
An agreement between the producer and finder. It specifies the term of the agreement, finders fee to be paid, money to be raised, etc.
Foreign Sales Agent
A person or entity in the business of selling films in foreign territories.
Fringe Benefits
The collective bargaining agreements of the unions require that pension, health and welfare moneys be paid to them for each person employed on the film
Gross Receipts
All moneys actually received by the distributor from exploitation of the film.
Insurance Premium
Money paid by the producer to the insurance company for the purchase of an insurance policy.
The cost of a loan.
A person or entity which provides financing for a film.
Lender Financing
Film financing through a loan or series of loans.
Letter of Intent
A letter from a producer, director or acting stating that they are interested in working or performing in the film pending financing of the film and their availability. A letter from the completion bond company stating that it will bond the film contingent on certain conditions.
Limited Liability Company
A hybrid business organization which offers the limited liability of a corporation with the tax structure of a partnership.
Limited Partnership
A legally regulated partnership used to raise money. It contains general partners who are active and managed the partnership and limited partners who are passive investors. The limited partnership agreement includes information regarding the investment, in this case the film(s), and all risks associated with investing in the partnership. Whether the limited partnership requires registration with the SEC (see below) depends on the amount of money being raised and the net worth of the investors.
Loan Out Agreement/Loan Out Company
The director, producer(s) or actor(s) may have corporation which loans out their services. If this is the case, then the employment agreement will be with the corporation rather than with the individual.
Location Agreement
An agreement between the production company and the owner of the location where the film will be shot.
Location Fee
The fee paid to the owner of a location where filming will occur.
Location Permit
A permit is required whenever filming will occur on a government owned street or in a government owned building.
Long Form Agreement
A fully negotiated agreement containing all of the terms of the deal.
The sale, distribution and licensing of items exploiting the various elements of the film i.e., toys, t-shirts, comic books, etc.
Merchandising Agreement
The agreement between the producer and the manufacturer or distributor of the merchandise.
Negative Costs
The cost associated with producing the film These include development, pre- production, production, and post production costs.
Negative Pick Up
An agreement between the producer and the distributor whereby the distributor agrees to pay a specific purchase price upon delivery of the completed film. The distributor does not have to accept the film and pay the purchase price if the film does not comply to the terms of the agreement.
Net Profits
Producers and producer's profit participants usually receive net profits. Net profits usually means some sum that is net the cost of production, prints, advertising, distribution fees and expenses, interest, overhead, gross participations, etc.
Net Profit Participant
Anyone who is receiving net profits.
Non-Circumvention Agreement
An agreement between the Finder of money and the producer, which prohibits the producer from using the finder's financier(s) or contacts without compensating the finder again. This agreement is usually for a term of five (5) to seven (7) years.
Option/Purchase Agreement
The producer acquires the right to buy a literary property at a fixed price via the option/purchase agreement. The option portion of the agreement gives the producer the ability to shop the screenplay even though she has not purchased it. This portion of the agreement includes terms governing the option fee and option period. The producer buys the screenplay only when the financing is in place and she knows that she is going to produce it. The purchase portion of the agreement includes the purchase price and all of the rights which the producer acquires via the purchase of the screenplay.
Option Fee
The fee paid to option a literary property. Typically this is ten percent (10%) of the purchase price.
Over Budget
Spending more to produce a film than the amount allocated in the production budget
Overhead Costs
Studios and distribution companies often charge the production company, in the form of a percentage, what is costs them to run their business.
The package is used to describe the basic elements of the film i.e., talent and director attachments, producer, screenplay, budget, etc.
Pay and Play
A monetary offer made to an actor, producer, or director which requires that they be paid and that the film be produced.
A monetary offer made to an actor or director requiring the talent to be paid whether or not the film is produced.
The planning period which precedes production. It is during this time that the script is cast, crew is hired, script is broken down, locations are secured, shooting schedule is established, insurance coverage is secured, and budget is finalized
Territories around the world may be sold off before the film is produced to raise financing for the film.
A copy of the film capable of being shown in a movie theater.
Prints and Ads
The prints made and distributed to theater owners for exhibition of the film. The ads used to promote the film.
Private Placement
The offering for the sale of a security not requiring state or federal securities regulation
Producer's Advance
An advance paid by the distributor to the producer of the film.
Principal photography -- that part of the producing process when the film is actually shot.
Production-Financing/Distribution Agreement
An agreement between the studio and/or distributor and the producer for the financing of the film. The studio and/or distributor acquires the right to distribute the film in exchange for the production financing.
Profit Participation
A percentage of profits, usually net, which is given to profit participants like the producer, actors, director, and writer.
A legal document containing all of the material information relating to the investment of money in a particular security.
Public Offering
When a security is registered with the state or federal securities regulation agency, then it may be offered for sale to the general public.
When revenues equal expenses.
The Screen Actors Guild is a union which represents actors. If a production company is a signatory of the SAG, then it has to adhere to the SAG Collective Bargaining Agreement in terms of salary, work conditions, travel, accommodation, per diems, etc.
SAG Producers Agreement
Agreement which producers have to sign if they are hiring SAG members.
Sales Agent
Sales agents pre-sell the film's foreign territories. The producer pays the sales agent a percentage fee based on territory sales.
Securities and Exchange Commission
he federal agency which regulates the sales of securities (see below).
Any financial investment for profit.
Security Agreement
The agreement between the producer and bank identifying the collateral.
Writers Guild of America
The union which represents writers. Producers have to pay WGA members no less that WGA minimum when purchasing a screenplay or hiring a WGA member.
Worker's Compensation Insurance
State law requires that employers purchase Worker's Compensation Insurance in case an employee is injured while on the job.
Work For Hire
For copyright purposes, the copyright of a work vests in the employer if the work is done within the employee's scope of employment or if the work is specially commissioned. There has to be a writing in place signed by the employee stating that the work is a work for hire.