The growing power and influence of the internet presents a different kind of challenge to traditional media companies. Social networking websites like YouTube and MySpace were once viewed as novelties with limited reach. Now visited by millions of users 24 hours a day, these user-friendly websites present a legitimate threat to traditional media companies and the manner in which people obtain information and spend their free time.
The battle between the new media and traditional media turned ugly last March when Viacom filed a billion dollars suit against YouTube for copyright infringement.
]]> THE DMCAThe YouTube/Viacom litigation revolves around the interpretation of the Digital Millennium Copyright Act (DMCA). The DMCA provides a safe harbor which generally shields websites from liability for copyright infringement for information users submit on their websites. To come within that safe harbor, "service providers" like YouTube and MySpace need to implement procedures to block and remove allegedly infringing material upon receipt of a "takedown notice" from a copyright holder. Service providers also cannot "financially benefit" directly from the infringement. The safe harbor also does not apply If a service provider has actual knowledge of infringing uses.
YOUTUBE/VIACOM
YouTube, MySpace and Facebook are among the wildly successful internet "social" sites where members can gather and exchange information at all hours of the day and night. Both allow members to upload pictures and videos for others to view.
Viacom filed suit last March against YouTube (and its parent company, Google) as a result of allegedly infringing content uploaded by users on to YouTube. When the litigation was filed last March, I was asked to comment on the issues raised by the case in this article on Cnet.com.
When it was filed, I initially thought that the lawsuit was a prelude to a content deal between Viacom and YouTube. Viacom's one-time subsidiary, CBS, has such an arrangement with YouTube. And independent studio, Lionsgate, recently announced that it too would establish a YouTube "channel" and provide the site with content. Through such agreements, these content providers seek to capitalize on the growing audience that seem inclined to view content on the site. So, as the litigation is now well into its second year, it is clear that this litigation does not appear close to being over.
Viacom is intent on proving that YouTube makes much of its revenue based upon content which YouTube has reason to know infringes upon Viacom's copyrights. Viacom contends that YouTube cannot rely upon the DMCA's safe harbor since it profits directly from the users uploading infringing content. The principal issue in the case will be whether ad revenue, which may not be able to be linked to specific videos, but which is received by YouTube and Google through its advertising programs, precludes Google/YouTube from asserting the "safe harbor" defense under the DMCA. Through this ad revenue, does Google "financially benefit" directly from the supposedly infringing content?
The resolution of this question would be news enough. However, as I will write about in other posts, the case is poised to set legal precedent concerning what has been thought to be confidential user information as well as electronic discovery. These rulings could affect millions of users.
Stay tuned.
]]>Recently, news media organizations have faced government pressure to reveal sources or other information or face criminal prosecution. The most infamous of these cases involved Judith Miller of the New York Times. Miller went to jail when she refused to reveal her confidential source for a news story in connection with a grand jury investigation. (Another reporter working for Time magazine agreed at the last minute to reveal his confidential source when his source gave him permission to do so.)
Yesterday's New York Times reveals a new tactic -- a government investigative subpoena which also threatens prosecution of the target for the mere disclosure of the subpoena. Apparently, the First Amendment is not what it used to be.
]]> NY PROSECUTORS TARGET ANONYMOUS BLOGGERSThe Times' story concerns prosecutors in New York who issued a subpoena in order to obtain personal information about bloggers who posted anonymously on a NY political blog called "Room 8." The subpoena contained a warning that disclosure of the subpoena itself could supposedly "impede" or otherwise "interfere" with the investigation. Of course that warning was a not-so-veiled threat that any such disclosure could subject the offender to criminal prosecution.
The actual purpose of the investigation, the targets of that investigation and the substance of the information sought by the subpoena are not as important to me as the tactic that the disclosure of the subpoena itself could subject the blog operators to criminal liability. Obviously, the NY prosecutors intended that their demand for silence, with the threat of prosecution, would prevent the blog operators from warning their users that they may be the subject of an investigation. However, the prosecutors refused to communicate to the blog operators the purpose of the subpoena or the relevance of the information they were seeking. The prosecutors simply demanded compliance -- and silence -- under the threat of potential prosecution.
The Room 8 operators promptly retained counsel, on a pro bono basis, to resist the subpoena. And like the federal prosecutors in the Miller case, the NY prosecutors withdrew their subpoena as soon as it became clear that their efforts to obtain confidential user information would be strenuously contested.
RESISTANCE NEED NOT BE FUTILE
Those of us who write blogs or publish in any media can take a page from these admittedly extreme cases of government aggression. Fight. Naturally, the path of least resistance dictates that you comply with whatever subpoena or request for information that comes your way even if that information should be protected by the First Amendment. However, no matter how it seems, compliance is not without cost -- i.e. the erosion of our rights of free speech and personal privacy.
I have represented media companies in cases where the cost far outweighed the actual amounts in dispute in the litigation. My clients did not immediately settle those cases for the simple reason that the First Amendment principles were more important than the money it cost to prosecute/defend the actions. The lesson that the Room 8 bloggers and Judith Miller provides is that attacks on our free speech and personal privacy should be resisted despite the obvious financial and personal burden. Even if resources are scarce, like it was for Room 8, effective counsel must be retained to fight for these principles. Creative use of cost-reimbursing statutes like the anti-SLAPP statute could also help.
But as the Room 8 and Miller cases show, resistance is not always futile.
]]>July 1 has come and gone with no deal in place which would prevent another crippling strike in Hollywood. The Screen Actors Guild and the Alliance of Motion Picture and Television Producers have reportedly reached an impasse in their negotiations for a new collective bargaining agreement to replace the previous agreement, which expired at 12:01 a.m. Tuesday morning. While the two sides are scheduled to meet today, public statements by AMPTP representatives make clear that the studios are unwilling to consider any changes to their final proposal which they transmitted on Monday, June 30.
For its part, SAG has acknowledged that the studios' final proposal is "generally consistent" with the agreements that the studios brokered with other guilds, including SAG's sister union, the American Federation of Television and Radio Artists. The studios first reached agreement with the Directors Guild of America in January. That agreement helped facilitate a resolution with the Writers Guild of America after an extended writers strike which halted production virtually across the board. Recently, the studios reached agreement with AFTRA on a new agreement with that union. The voting results of the AFTRA membership should be known some time next week.
Apparently, those deals are not good enough for some at SAG.
]]> SAG HARDLINERS WANT MORESAG, with thousands of members who are also AFTRA members, has lobbied for the rejection of the proposed AFTRA-AMPTP deal. In that vein, SAG's chief negotiator, executive director Doug Allen, immediately criticized the studios' offer. At the heart of the criticism lies proposed compensation for new media, advertising woven into content and DVD residuals. Jack Nicholson, among some A-list actors, support SAG's criticism of the proposed AFTRA deal, claiming that AFTRA could do better.
Others like Tom Hanks support the AFTRA deal, fearing what another prolonged strike could do to the industry. In fact, if you believe the studios, production is already being impacted by the mere possibility of an actors strike. The AMPTP warns that SAG members would lose millions a day in wages while the impact on other industry guilds would be equally devastating.
THE REALITY
While there is never a "good" time for a strike, an actors strike could not come at a worst possible time. The economy is in terrible shape. The California economy specifically, long reliant upon a healthy entertainment industry to provide jobs and other economic opportunities, would suffer yet another devastating blow if the actors were to shut down production for the second time in twelve months. Naturally, the effects of any work stoppage are felt more by those who are unable to withstand the economic fallout. So while most A-list actors (and directors, writers, etc.) could probably weather another halt in production, the less established talent and crew would likely suffer. I know casting directors, assistants, producers -- all of whom depend on that next gig to pay their bills. With rising gas prices, falling real estate values and the consumer credit crunch, another entertainment industry shut down would tax an already overburdened California economy.
So while it's certainly understandable that there is a faction of SAG officials and members who view this as an opportunity to get concessions that would benefit their membership, I agree with Hanks and others who counsel a more temperate strategy. The DGA, WGA and AFTRA have all reached a middle ground with the AMPTP. By many accounts, the studios gave concessions in those deals that (in previous years) they were never willing to give to the guilds. SAG would give the entertainment industry a boost if it follows a similar path as these other guilds and avoids a work stoppage. No matter what concessions SAG might ultimately gain after a strike (if any), no one wins if there is another prolonged industry shutdown. Let's hope that it doesn't come to that.
That's my $.02.
]]>Tomorrow, on July 1, 2008, I start a new practice in my own law firm -- The Avanzado Law Firm. I left my partnership at Jeffer, Mangels, Butler & Marmaro this afternoon.
In so doing, I am going back to a small firm environment which should allow for more flexibility in my practice. I will continue my entertainment and intellectual property litigation practice and hopefully expand the kinds of matters I am able to handle. It is my hope that taking full control of my legal career will ultimately allow me to better serve clients.
As I get settled in my new life and office, I hope to add new substantive posts. As I have been distracted lately, I realize that I have not been posting much. Thanks for your patience.
]]>With the writers' new deal, the focus now shifts to the Screen Actors Guild, whose contract with the studios is set to expire on June 30. Talks between the actors and the studios are set to begin shortly.
]]>Alex Ferrer, a former Florida judge now known as Fox's "Judge Alex" on television, entered into a contract with Arnold Preston, a lawyer who provides "services" to people in the entertainment industry. The dispute between centered on the nature of those "services" -- with Preston claiming that he was Ferrer's personal manager and Ferrer claiming that Preston acted illegally as an unlicensed talent agent.
Pursuant to an arbitration clause in their contract, in 2005, Preston demanded arbitration on his claim that Ferrer failed to pay for his services. Ferrer countered with a petition to the California Labor Commissioner, claiming that the contract was void under the Talent Agencies Act because Preston acted illegally as an unlicensed talent agent.
And so began three years of litigation before the Labor Commissioner and the courts, culminating in the US Supreme Court's decision yesterday.
]]> THE DECISIONThe parties' journey through the Labor Commissioner and the court system is not an exciting read. The Supreme Court's opinion here provides all the sordid details. The long and short of it is that Ferrer claimed that the Labor Commissioner had exclusive jurisdiction to decide whether Preston acted illegally as an agent and wanted to proceed before the Commissioner before any arbitration. Preston wanted the courts to compel Ferrer to arbitrate immediately his claim for fees. Two California courts sided with Ferrer and refused to compel arbitration. The US Supreme Court, in an 8-1 decision penned by Justice Ginsberg, reversed.
The Supreme Court ruled that the Federal Arbitration Act required enforcement of the parties' agreement to arbitrate "any disputes" -- including Ferrer's defense that the agreement was void because it was made in violation of the Talent Agencies Act. The Court cited longstanding federal policies favoring arbitration to "achieve streamlined proceedings and expeditious results" and held that those policies also applied to require arbitration in administrative proceedings, such as the Labor Commissioner petition filed by Ferrer.
LESSONS TO BE LEARNED
A few lessons can be learned from the Judge Alex case. First, the case again brings attention to the somewhat tricky situation that managers face in the representation of clients in the face of the Talent Agencies Act. To be safe, managers need to ensure that their clients also have independent agency representation so that they cannot be said to have "procured employment" illegally under the act.
Second, at least where there is an arbitration agreement between the parties, the case eliminates the common strategy to delay a pending litigation by filing a petition before the Labor Commissioner. Those proceedings can delay cases for many months if not more when the Commissioner has jurisdiction to decide issues which may arise in a dispute. The Supreme Court made clear in this decision that, even though the Labor Commissioner may have the authority -- even exclusive authority -- to decide an issue, the arbitration provision will take precedence.
Finally, the case illustrates the irony that sometimes arises during a hotly contested litigation. The parties agreed to an arbitration provision which the Supreme Court found was intended to provide them with a "streamlined" and "expeditious" process to resolve their claims. The actual dispute between the parties -- whether "Judge Alex" owes Preston fees for his services -- has been delayed by their squabble over whether they are required to arbitrate the case. The case made its way to the US Supreme Court, and took three years to do so.
Even with the Supreme Court's decision, the California courts still need to issue final orders "consistent" with that opinion. So it would not surprise me if the parties do not actually begin their arbitration until 2009, almost four years after the dispute first arose.
Hardly an "expeditious" process.
]]>According to NBC's complaint, Wolf takes the position that the parties agreed that the 2 season guarantee means that, should NBC terminate any of the Law & Order series, he is entitled to 2 years of producing fees, essentially as a severance or "kill fee." NBC disputes that interpretation. NBC claims that the parties agreed that NBC's promise of a 2 season guarantee means that, if NBC decides not to order an additional season of episodes, NBC would be on the hook only for the remaining year on the prior 2 year order.
The parties were unable to resolve their differences during pre-lawsuit negotiations -- and rumors abound that one or more of the Law & Order series are in trouble and could be cut from NBC's lineup.
Courts are generally loathe to change the terms of written contracts. So NBC has its work cut out for it to convince the court to re-write the agreement to conform to its understanding. And NBC claims that the agreements themselves are confidential in deciding not to file the documents with its complaint. So while it's difficult to analyze the exact dispute between the parties over interpretation of unseen documents, those details will eventually become public if the parties continue to litigate the case in the courts.
As the strike by Hollywood's writers enters its third month, studios have started to terminate overall talent deals with producers and writers. Dubbed "Black Friday" and "Black Monday" by the trades, virtually every major television production arm terminated deals this past Friday and Monday. ABC Studios started the carnage on Friday, January 11. On Monday, January 14, CBS Paramount Network TV, Universal Media Studios, 20th Century Fox Television and Warner Bros. TV followed suit with their own cuts.
The studios' efforts to jettison these deals raises interesting issues and brings to the forefront potential strategies by artists who can use contractual rights to apply pressure to their studios.
]]> WHAT IS FORCE MAJEURE?The legal doctrine of "force majeure" was historically related to the defense of "impossibility" -- i.e., that it was physically impossible to abide by contractual terms, thus excusing performance. The early application of the doctrine related mostly to "Acts of God." The Civil Code states the defense as follows: "[P]erformance of an obligation . . . or any delay therein, is excused . . . [w]hen it is prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States." So the historical legal doctrine of "force majeure" (generally) does not include "human acts" such as labor strikes.
Modern entertainment contracts, however, need not rely upon the historical "force majeure" legal doctrine. Most modern agreements expressly include "strikes," "lockout" or "labor disputes" within their definition of "force majeure events." And by now, the industry custom embraces the concept that guild actions such as the ongoing WGA strike falls within the standard "force majeure" definition in industry agreements.
TYPICAL CONTRACT REMEDIES
Whether a strike or a labor dispute is included within the "force majeure" definition is only the first step of the analysis. Industry agreements generally provide for a remedy in the event of "force majeure" for the producer/studio or the talent or both. Most agreements permit the suspension of the agreement if "force majeure events" prevent the development or production of the project. If that event continues for a longer period of time, the agreement typically allows the producer/studio right to "terminate" the agreement. Studios have begun to do just that in the past week.
However, I have seen some agreements which give the artist the right to give "notice of intent to terminate" the agreement upon the studio's suspension of that agreement. The artist's notice then puts the onus on the studio to "reinstate" the agreement or allow the agreement to terminate.
WHAT'S HAPPENING NOW
Studios suspended their deals with writers when the WGA went on strike. As the studios now announce the termination of talent deals, studios seem to be selective in selecting which deals to cut. Variety reports that ABC slashed only deals with producers and writers who are not currently working on major series -- and not deals with any who are crucial to current projects. In other words, studios seem to be thinning their herd but continue to hold on to their most crucial talent assets.
So, I foresee a very interesting game of chicken in the upcoming weeks if the WGA strike continues. The top talent, who presumably have all had their deals suspended, can exercise any contractual right to terminate their deal. I would expect that only the top artists -- the artists most coveted by a studio -- would have that right and that those deals would be among a studio's richest. Such a move could force studios to choose between losing valuable creative assets or reinstating expensive deals.
Rumor has it that some studios are countering this possibility by taking the position that, instead of "force majeure" being the cause of any suspension, that the talent suffers from a "disability" and unable to perform -- thus preventing talent from attempting to terminate their deals. That argument seems to be a stretch, given that "labor disputes" are routinely included in the "force majeure" definition. Given the potential stakes, that could be an issue worth litigating.
These are stressful times. And while blogging about strategies and machinations is interesting, the economic toll on those who are caught up in this tussle cannot be forgotten. Artists with overall talent deals and their representatives need to analyze whether pressure on a studio can be brought to bear through the exercise of contractual rights.
]]>The widely anticipated agreement now increases the pressure on the writers, who are entering the third month of their work stoppage. Whether the writers think the directors' agreement is sufficient remains to be seen.
]]>The WGA has signed "interim" agreements with independent production companies and smaller studios, which could signal a break in the ranks of the studios which have held firm against the writers' demands. The Weinstein Company, the newly revamped United Artists and David Letterman's Worldwide Pants Production Company are among the companies who have reportedly signed such interim agreements with the WGA. Those companies are now free to resume production on their projects.
In addition, the Directors Guild reportedly has achieved some progress in its "pre-negotiations" with the AMPTP. Reports suggest that the directors can reach agreement with the AMPTP in a matter of a couple of weeks.As Barry writes, these recent events give some hope that the writers' strike can also be resolved in short order.
However, the WGA and the studios/networks have recently taken adverse actions against each other, which suggests that a resolution is not imminent. The WGA has pressured networks and studios by refusing the grant waivers for the upcoming awards season. Having reduced the Golden Globes to a reading of award winners, the Oscars and the Grammys -- usually a time for celebration in the entertainment industry -- are now in jeopardy. On the other side, ABC Studios, CBS Paramount Network TV, Warner Bros. TV, 20th Century Fox TV and Universal Media Studios have started to terminate overall deals with writers and producers. Representatives of the terminated talent vow revenge. Thus, the end result of both sides continuing to draw blood from each other is that nothing is getting produced in Hollywood.
If both sides persist in continuing this fight, the obvious conclusion is that darker days for the industry lie ahead.
]]>A Los Angeles Superior Court judge ruled that Buena Vista Home Entertainment (BVHE) breached its US video distribution agreement for the motion picture The Patriot when it deducted millions of dollars in alleged distribution costs. The judge also held BVHE liable for improperly terminating the video distribution of the picture, ruling that BVHE's failure to distribute the picture violated the implied covenant of good faith and fair dealing.
After years of complicated litigation, BVHE was ordered to pay over $6 million.
]]> THE LONG CHASEA Korean investment company, Ilshin Investment Co., loaned millions of dollars to the production company which produced The Patriot. The picture was never released theatrically in the United States and starred Steven Segal. The move was released in the home video market in the United States in 1999.
In 2001, Ilshin sued the production company and obtained a $6.6 million judgment. When the production company could not pay that judgment, Ilshin sued BVHE in 2006, claiming that BVHE improperly withheld millions of dollars as impermissible "costs" from the video distribution of the picture. Ilshin's suit sought to recover what was in essence the "assets" of the production company. After prolonged proceedings and a trial before the judge, BVHE was ordered to pay to Ilshin over $6 million, including prejudgment interest.
DISTRIBUTION COSTS CAP
BVHE's distribution agreement with the production company limited the amount it could spend -- to $900,000 -- for distribution costs in the United States unless BVHE obtained the prior consent of the production company. BVHE exceeded that limit by almost $3,775,197 but never sought consent to exceed those limits.
During the litigation, BVHE claimed that the limitation on distribution costs was a mistake, applied only to "marketing" costs" or that the production company and its successors waived those limitations. (I was actually involved tangentially in the case, representing one of those third-party successors, Comerica Bank. One of my partners, Michael S. Sherman, represented the bank in connection with the bank's secured interests in the motion picture. I also represented Sherman during his testimony in the trial in this case.)
Ilshin countered by stating that the cap on costs was necessary because BVHE did not provide the production company with any advances or guaranteed payments.
In holding BVHE liable to the production company's creditor, Ilshin, the judge rejected all of BVHE's contentions. The court ordered BVHE to pay the amounts it withheld in excess of the $900,000 cap -- an amount totaling $3,775,197. The court also awarded prejudgment interest of $1,769,709 plus $1,034.30 per day after October 4, 2007. Through December 13, 2007, an additional $72,401 in interest is due to Ilshin, bringing the total amount awarded for this claim to $5,617,307.
BVHE ALSO ORDERED TO PAY LOST PROFITS FOR FAILURE TO DISTRIBUTE PICTURE
BVHE stopped distributing The Patriot in October 2005. BVHE contended that its distribution agreement for the picture incorporated by reference their standard provision for "Distribution Control" -- which permitted BVHE to terminate distribution at its discretion. The court rejected that contention.
Accordingly, the court ordered BVHE to pay an additional $800,000 in damages based upon expert testimony of what the expected sales would have been during that period.
Thus, the total amount BVHE must pay to Ilshin, as of December 13, 2007, is $6,417,307.
LESSONS TO BE LEARNED
BVHE allocated video distribution costs of over $4 million for its US distribution of The Patriot -- a motion picture which was not released theatrically in the United States. In this case, BVHE was unable to rely upon many of the standard Disney contractual provisions which permit distributors to recoup virtually limitless distribution costs and/or terminate distribution altogether. Obviously, the negotiations on the distribution agreement are critical to ensure that the production company -- and any profit participants -- are protected against excessive recoupment claims.
The more important lesson from this case may be the scope of the creditor's (Ilshin's) perserverance and patience in pursuing its remedies. Litigation over movie profits is complex and difficult. Most settle before going to court. However, perhaps the most important factor in pursuing such claims is the patience (and resources) to withstand years of difficult proceedings to vindicate your rights.
Even now, this case is not over for Ilshin or BVHE. The parties are still fighting over remaining claims in court. Accordingly, the parties' patience and determination in litigating their various contentions against each other will continue to be tested.
]]>Not surprisingly, the Filipino-American medical community was highly offended by this remark.
ABC has since issued an apology and promised to excise the offending remarks from future showings of this episode.
Not every member of the Filipino medical community has been placated by ABC's actions. Some have called for legal action against ABC for "defamation." As dumb and insensitive as the offending line may have been, equally dumb would be any litigation against the show or ABC. If ethnic groups or women could file litigation as a result of a negative portrayal of that group in the media, our already-overburdened court system would quickly collapse from the weight of the new cases.
I am all for taking ABC and the show to task for being insensitive and callous in their portrayal of the Filipino medical community. That is our right under the First Amendment. But any lawsuit would equally offend those principles -- and would be counterproductive and a complete waste of resources. Hopefully, cooler heads will prevail.
These are obviously my personal views and not necessarily those of my firm or my partners.
]]>Back in the day, the ways in which movies were financed called to mind the adage about never wanting to see how sausages are made. Producers using credit cards and borrowing money from friends and family to get their movies to the silver screen were legend. Others tell of the wealthy spending millions of dollars on films to satisfy a desire to mingle with the stars or see their names on the screen.
Times have changed.
These institutions are investing not just in studios and their slate of blockbusters. Wall Street institutions now partner directly with individual producers to back those with successful track records on their future projects. According to the New York Times ("Wall Street Woos Film Producers, Skirting Studios" October 15, 2006), producer Joel Silver ("Lethal Weapon" and "Matrix") reportedly inked a deal with investment firm, CIT Group, for $220 million to produce 15 motion pictures. Ivan Reitman ("Animal House" and "Ghostbusters") reportedly has a deal worth $200 million for 10 pictures with Merrill Lynch.
HOLLYWOOD ACCOUNTING
The influx of traditional financial institutions accustomed to standardized accounting practices and returns on their investment could have an impact on how Hollywood conducts its business in the future.
"Hollywood accounting" has long been the subject of jokes and (more ominously) lawsuits. Gary Wolf, author of the book on the film "Who Framed Roger Rabbit" was based, sued Disney when Disney claimed that the picture failed to turn a profit. Art Buchwald sued Paramount Pictures over the film "Coming to America" when the studio claimed that movie never made a dime. More recently, Peter Jackson, director of the picture "Lord of the Rings," sued New Line Cinema over certain "accounting practices." That these profit participants in such significant movies would need litigation to sort out their participation in the movie's "profits" speaks volumes over the way studios accounted for "profits" on motion pictures.
Wikipedia describes it this way:
Hollywood accounting is the practice of distributing the profit earned by a large project to corporate entities which, though distinct from the one responsible for the project itself, are typically owned by the same people. This has the net result of reducing the project's reported profit by a substantial margin, sometimes even eliminating it altogether.
In other words, Hollywood accounting practices do not always comport with "generally accepted accounting principles" – GAAP – which traditional investment institutions take for granted.
WHAT DOES THIS TREND MEAN FOR PROFIT PARTICIPANTS
The optimist in me says that the influx of venerable financial institutions could only help the individual profit participant. These institutions will demand that studios and distributors make only arms length transactions involving the properties in which they invest and that any expenses charged to the movies be above-board. Moreover, the institutions will have the resources to challenge the studios on any questionable transactions or charges – all of which you could expect to deter any "funny business" from taking place.
However, the cynic in me says that nothing will change and that only those with sufficient "clout" in the industry will benefit – same as it ever was. So while these institutions investing hundreds of millions of dollars will have the resources and the power to negotiate favorable profit definitions and contractual rights for reports and accounting, the "regular" profit player will still be subjected to profit definitions which favor the studios.
In addition, the consolidation under one corporate umbrella of studios, television and cable networks and new media outlets continues unabated. Thus, transactions among corporate affiliates are more prevalent than ever. Whether the "sale" of rights to exploit a motion picture to a studio's network affiliate is consistent with what a sale in the open market would bring for those rights will continue to be a concern for most profit participants.
Accordingly, profit participants must continue to be vigilant in negotiating their deals and definitions as well as in monitoring the transactions transferring the rights to those pictures. In other words, just because these institutions might be able to "clean up" some of Hollywood's most notorious practices for their own deals doesn't mean that the individual profit participant is going to reap much benefit. Lawyers and auditors who are tasked to keep studios and production companies in check will still be needed.
That’s my opinion, based on almost twenty years in litigating these kinds of disputes. Wall Street’s participation in the industry is certainly a trend worth watching since this is likely to affect the industry for years to come.