Managers who act as Producers

[Joe Calabrese]

I was emailing someone today about managers who also call themselves producers and I thought I would share my thoughts about it here.

For those who don't know better, never, ever, ever, ever (did I forget to say never?) sign with a manager who would have the option to attach himself as a producer to any project.

My manager doesn’t and made that clear in my contract with him.

Let’s say your manager is sitting down with the development exec at Paramount. They read your script and want it, so your manager his client expects 2% of the budget with a floor of 200K and a ceiling of half a million. The exec says that sounds reasonable. Then the manager says, PLUS I (the manager) attach as producer with creative decisions, screen credit and 1% of all revenues from the film. Paramount naturally says "no way", so the manager returns with, “Listen my client is young and eager. How about I convince him to take a flat 100K, plus I will only take .5% of the net? Paramount says “Sure, but you don’t go anywhere near the set.. You're a producer in name only.”

The deal is set.

So, in effect, you the writer gets screwed out of hundreds of thousands of dollars and the manager gets his own paycheck out of the deal worth a million or more. Plus, to add insult to injury, he gets 10 to 15% of your 100K too.

These guys get this vast pool of scripts by optioning them for a year or two with no money down, with promise of really good money once sold. The deal looks good on paper to the young writer, but in fact the contract has so many loop holes you could drive a truck through it.

One such manager/producer was reported to have over 300 script options in one year alone. He ended up selling to a studio or producer only 3 scripts that year. Since it didn’t cost him anything to have the option for all of those scripts, he was out nothing and when he sold those three scripts, he made over 2 million that year.

See what I mean? Managers should be looking out for you, not the other way around. Also check out anyone you are thinking of repping you and always seek the advice of a reputable entertainment lawyer.

That’s enough ranting for today. Later.

[Enigma]

My manager blew through the roof when I told her about your posting. You'd think she was a "Jar Head" to listen to her rant. She wasn't sure but thinks that practice is outside the Basic Agreement when it comes to talent, but she insists it should apply to writers.

In literature/books, Preditors & Editors helps the writer sort out the good from the bad and ugly. The URL is www.anotherealm.com/prededitors/peswla.htm (http://www.anotherealm.com/prededitors/peswla.htm) There should be something like it for screenwriters.

But, like in any other business, almost, there are "funny" deals and then there are "funny deals" and in this business I'm finding there often is more creativity in the financing than the story. For the author of a book that will translate well into film, the "Irish Connection" is the mother of all (legal) funny deals but requires the author's cooperation, along with an understanding of accounting and tax law, which most writers don't have.

But here the subject is outright dishonesty, and it should be explored in detail, so rant on, Joe!

[Maryn]

What an eye-opener, Joe.

Man, instead of knocking myself out writing, maybe I should be managing the gullible!

[Enigma]

What an eye-opener, Joe.

Man, instead of knocking myself out writing, maybe I should be managing the gullible!

Shouldn't that read; "... mis-managing the gullible...?"

[NikeeGoddess]

not trying to discount anything you said, Joe
never say never - not every situation will be as you say - not every manager who wants to be producer can and will take advantage of your naivity - althou i'm sure it happens.

switch the jobs around and you can always make an argument against it
ie - never sign a writer who wants to direct their own story. we know this can be disasterous - and at the same time it can be a great opportunity.

[Enigma]

It all comes down to the writer checking everything and everybody out BEFORE he or she signs anything. e.g. - research; it's your life! Ask questions, yes, but always try to know the answer before you do, and always ask the same question at least twice, from a different angle - to see if you get the same answer. You'd be surprised.

The worst situation a writer could find himself in is to have a reasonably good script, and, maybe, a "Letter Of Intent" and, especially, a few "Letter(s) Of Interest" to go with it - and then approach an agent or manager on the Left Coast without knowing what could happen. Get a grip because one thing is for sure, like being in the Army - people, bad people, are going to shoot at you!

I don't know which is more fun, writing (the hard part) or raising money (easier, especially here in the southeast) BUT, finding people you know and can trust, and are competent, ah, that's the real trick.

For these reasons, I gotta go with Joe's point of view. "Innocent until proven guilty" ain't the same as "honest until proven dishonest."

[Joe Calabrese]

My point being that a manager who looks to attach as producer should automaticaly come under question regardless of how honerable his/her intentions may be. There's no reason for a manager to attach other than to make huge amountss of money for him/herself in addition to the meager 10-15% manager's fee from the writer's sale. With that in mind, it is a huge conflict of interest in representing your work. How can you trust that person?

So although it may be wrong to say "never" (especially as many times I did in one sentance) it is a big red flag everyone should be aware of and be cautious and certain before signing on.

I'm sure there are many reputable managers who produce as well and producers who manage too, but don't take everything they say and promise at face value. Get it in writing and get it checked out by a lawyer.

As for a writer demanding to direct, it never happens from a newbie writer, unless they have an established background for that job, or they make it themselves, in which case, they wouldn't need a manager.

[IWrite]

My point being that a manager who looks to attach as producer should automaticaly come under question regardless of how honerable his/her intentions may be. There's no reason for a manager to attach other than to make huge amountss of money for him/herself in addition to the meager 10-15% manager's fee from the writer's sale. With that in mind, it is a huge conflict of interest in representing your work. How can you trust that person?
Many managers become managers precisely because they want to produce. Not just take a fat fee for being given a producer credit but actually become producers. In fact I know several agents, Legit agents from well respected agencies (even ones they were partners in) who left the agencies and became managers - because they wanted to move into producing. Agents are precluded from producing by the state of California.

Agents must be licensed by the state of California and NY as well and therefore are are regulated to some degree, managers are not.

In California and NY managers are not allowed to negotiate for their clients to avoid just the scenario you described up top. That is why if you have a manager you need either an agent or entertainment lawyer to negotiate on your behalf - not just to vet the contract terms that your manager agreed to - legally, your manager should not be negotiating for you at all. I don't know what is and is not allowed in states where talent agents are not licensed - but the same conflicts of interest obviously can apply.

There is an inherent conflict of interest with managers who want to produce -
Hell, even Gary Shandling sued his managers - who produced the Larry Sanders Show because he felt that they put their interests as producers above his as a client.

However it is often a manager's passion to get into production that is behind their efforts to do more than an agent does to set-up a project for you in the first place.

A manager's demand for a producing credit can hurt a writer's chances of setting up a deal in some instances. Anyone can call themselves a manager - and sometimes it's just not worth it to have someone who knows nothing throwing around their weight as "producer" and wanting in on the decision making process. I've seen interest in a script turn to disinterest once the "manager/producer" card is played.

[Joe Calabrese]

Of course I agree that managers who act as managers and do not negotiate for you are there for valid and worthy reasons. All the shady ones (the ones I am refering to) do negotiate anyway and that's the hook they use on a newbie. They smile and say, "Sure we're not suppoed to but there's ways around it. Trust me."

Those who do not want to produce or are on the up and up, like my manager, actively seeks an agent to co-rep the client. My guy won't go near a negotiation with the exception of starting the initial talks. Thus far, when negotiations for compensation were needed to be ironed out, I used my laywer and manager for advice, but I basically did all the direct negotiating myself.

There's good and bad in any job. Just keep your eyes open.

*** and okay, I should have not said never, ever, ever....

[IWrite]

Hey Joe,

I guess I was just pointing out that the conflict of interest issue applies to those that are not shady as well. Whether he's negotiating for you or not, a manager's number one priority should be what's best for his client, and when they have other things on their agenda - it's just not possible.

Most of the big management firms - are either in or looking to get into production - because that's where the chance for the big money is. And because that's where the big money, and the road to power is - the interests of the client can become secondary. That's the reason agencies were barred from getting involved in production to begin with.

I was once offered representation by a management firm that drew a strict line in the sand between their client representation and their production activities. They would not produce their client's work to avoid that conflict of interest. I didn't sign with them because of that strict line. If I was going to have a manager (which I have never been to keen on in theory) and that manager was actively involved in production - I wanted to have the opportunity to have my work produced.

As I said, personally I've never been too keen on managers. They take a bigger chunk and you still need either an agent or lawyer to handle the negotiations.

If an agent is doing his job, you don't need a manager.

[Joe Calabrese]

I always have my fingers crossed for an agent, but I have to say I've been pretty happy with my guy. He's always available to hear my ideas and give feedback that is helpful (most of the time). Plus one person tooting my horn in LA is better than none at this point.

[Enigma]

"... That's the reason agencies were barred from getting involved in production to begin with...."

Did I once read where Wm. Morris and the other Two are now in all aspects of film making, including production, which if the producer of record is appointed by them and/or is one of their clients, would make them a defacto producer? Plus, since they are or might be into film financing, I would bet they are in to production. If all that's correct, then obviously there is a way around the rule, like there is every rule in this world. Either that or the Big Three are above the rules.

[JustinoXXV]

Go to www.wma.com (http://www.wma.com/)

and go to http://www.icmtalent.com/film/film.html

There's nothing on either of these agencies producing films. This is directly from the agencies themselves.

Now of course, a producer could be repped by ICM or WMA. But that's an entirely different thing.

William Morris and ICM, when they rep screenwriters, shop screenplays around and close deals on them. They cannot buy them and produce them. As IWrite said, this is a MAJOR violation of law in California and New York. They'd lose their licenses to be talent agency.

Now if some Hollywood Producer needs a rep (an agent), agents from ICM or WMA are more than welcome to represent them.

[Enigma]

Go to www.wma.com (http://www.wma.com/)

and go to http://www.icmtalent.com/film/film.html

There's nothing on either of these agencies producing films. This is directly from the agencies themselves.

Now of course, a producer could be repped by ICM or WMA. But that's an entirely different thing.

I disagree on it being a different thing. I'm 99.9% sure I read where WMA is in to financing projects and, in my sense of logic, they'd use their own people/clients first. Wouldn't you? Sure! Also, and on this I'd bet the farm, if it's their money, or if they raised it and/or control it, they make all the rules. Technically, they may not be called a "producer" but they could fired the "producer." To me that's being not just a producer but being above a producer.

Getting around rules is an art form today. Think about this; do you think SAG would dare punish WMA, ICM, Universal, and so on for a minor offense? I don't think so. And, besides, SAG or whoever made the rule, can't fine the offender without their permission, or send them to jail. Hack the big guys off and they'll form their own set of rules. My guess on the way they might be doing it, if the rule might be enforced and if they don't want to fight about it, is form another corporation, even in another state or country, and retain controlling interest in it.

The lady I'm seeing is a CPA and she once showed me the list (from their annual corporate report to shareholders) of corporations Universal either has controlling interest in, or a share, shares in financing, distribution, production, etc., or some kind of contract with. All the listings were vague and didn't include details, just that they had a vested interested in everyone on the list. The list had some 6,000+ entries. Many of them were production houses/corporations/productions.

If WMA is a publically held corporation, they would legally have to show the same thing on their annual report.

I'll search my HD and see if I can come up with any of the articles on WM.

[Enigma]

Go to www.wma.com (http://www.wma.com/)

and go to http://www.icmtalent.com/film/film.html

There's nothing on either of these agencies producing films. This is directly from the agencies themselves.

Now of course, a producer could be repped by ICM or WMA. But that's an entirely different thing.

William Morris and ICM, when they rep screenwriters, shop screenplays around and close deals on them. They cannot buy them and produce them. As IWrite said, this is a MAJOR violation of law in California and New York. They'd lose their licenses to be talent agency.

Now if some Hollywood Producer needs a rep (an agent), agents from ICM or WMA are more than welcome to represent them.

Check this out on WMA. I didn't try ICM.

http://www.indiewire.com/biz/biz_970516_wmafin.html

[JustinoXXV]

"



In a move that may secure their place as overachievers of the year, the William Morris Agency has pre-financed, via foreign sales, five independent feature films for thier clients to star in and direct. This marks the first time an agency will include the financing of a film in their packaging of talent. While it's obvious how packaging actors and directors for a project benefits an agency, supplying the money that will pay them requires some explanation. It seems to imply they want a piece of the box office (a certain conflict of interest) or a hefty fee from the producer (a less certain conflict of interest). During an interview with indieWIRE Thursday, Indie friendly agent Cassian Elwes insisted there will be no equity involvment on the part of the agency nor any fee charged to the producer for securing this money. "We're just trying to get more employment for our clients," Elwes stated. He also maintains that the agency will have no relationship with the producer of the projects. When pressed further, however, he added the agency "will probably represent the producer in negotiations once the project is finished." Three of the five already-financed films have been chosen. No word on who or how the agency will chose the remaining two."


Assuming what Cassian Elwes says is true, there isn't any equity involvement of WMA. They do not have a financial stake in the movie, like a producer would.

He did mention that the agency will represent the producer once the project is finished. So that's what's in it for them.

WMA is not RISKING any of their own money in this deal. Nor are they purchasing equity in the project.

It seems like the most, on the behalf of the producer, that their sending the script out to investors. Agencies like WMA can also send scripts to studios on the behalf of producers (because anyone can open up a production company, doesn't mean they know how to identify a good script).

And no, WMA cannot FIRE a producer because they don't OWN the copyrights. Said producer could always TAKE his business elsewhere.

"Think about this; do you think SAG would dare punish WMA, ICM, Universal, and so on for a minor offense? I don't think so. And, besides, SAG or whoever made the rule, can't fine the offender without their permission, or send them to jail."

SAG cannot make laws. The states of California and New York, as Iwrite mentioned, made these laws. They have specific departments that deal with licensed talent agencies, and they have the power to fine them or shut them down.

"My guess on the way they might be doing it, if the rule might be enforced and if they don't want to fight about it, is form another corporation, even in another state or country, and retain controlling interest in it."

Baseless speculation on your part. The WMA agency is going to move to Iowa or New Zealand, so far from all of it's clients and the industry. Uh huh.

Producers are ACTIVE investors in movies, and they do get a stake of whatever profits the movies earn.

WMA makes no profit whatsoever from any movies. They get money from deals they broker for producers, which doesn't violate California and New York State laws.

As for getting around rules, apparently you're fascinated by the idea, but Martha Stewart, Sam Waskal, Bernie Ebbers, and a host of other white collar criminal CEOs apparently REGRET attempting to get around the rules.

Get caught getting around the rules, not only can you do jail time or risk your business being shut down (Arthur Anderson, the auditor for Enron and Worldcom), the IRS may clean your clock with all your ill begotten earnings.

[IWrite]

Enigma - it's a very convoluted situation and I don't know all the details but I do know this. The agents have been trying to loosen the restrictions so that they could have a limited ownership interest in prodution entities - whether they can do it legally or not, I'm not sure - But I do know that the creative unions balked. The agents have been operating w/out an agreement with SAG for a couple of years now because of this issue.

Securing money from an outside source is not quite the same thing as if the agency had invested its own money in these productions.

But I agree it's a step in a bad direction. The fact is no matter how you slice it, if those representing you have a stake of any kind in entitites that are paying you there's a conflict of interest.

But at least agents are licensed by the state and therefore regulated, the same cannot be said for managers. There has been talk about regulating managers as well - but I don't think that has gone anywhere yet.

[bison]

Isn't this "Trust Me" in Hollywood?

[Chesher Cat]

Three of the five already-financed films have been chosen. No word on who or how the agency will chose the remaining two.

Hmmm...still looking for two more scripts? Time to jump off the absolute board and pound on the keyboard!

[Enigma]

I was advised by my ex-wife's attorney today that she intends on suing you for using her likeness as your avitar without permission - or payment. Especially payment.

Where did you ever get her picture? :)