Q&A: How Do I Attach, Benefit, and Protect Myself With a Script Brought to My Attention to Help With Funding?
Q: How do I attach, benefit, and protect myself with a script brought to my attention to help with funding?
A: My second child was born recently. A precious, fragile, adorable miracle. It’s moments like this that make you re-focus on what really matters in life. The spotlight of clarity turns brightly on, your eye lashes are taped to your forehead, and you up and see what’s at the core of it all: money. Babies are expensive. Just one year at some Westside pre-schools costs more than four years of college tuition cost me. All you need is love? That’s cute. Tell this to a hungry baby, and the baby will laugh in your face while dialing child protective services. Money can’t buy you love? Maybe not buy love, but it certainly can lease it for you. Of course, I’m exaggerating. Money is not all that important, if you have a lot of it. And clearly the people who brought you this script don’t have a lot of it.
It’s unclear from your question whether you have “money” connections that you can bring to the table or if you’re contemplating using your own money to help fund the script. Depending on which it is, the answer to your question is different.
If it’s money connections that you will be bringing, then the logical and customary way to reward you for your efforts is a finder’s fee. A finder’s fee is typically thought of as 10%, but it’s often more in the 2% range for bringing in movie financing. Before you introduce your funding source to this project, you should make and document a deal with the “money” or with the people taking the money or with both that you will be entitled to a certain percentage of the funds you help bring as your fee.
If it’s your own money, then the logical and customary way to reward you …hold on a second, using your own money to help fund someone else’s script is neither logical nor customary nor, in my psychiatric opinion, sane. As you probably know, while I’m not a licensed psychiatrist, most of my friends, colleagues, clients, co-workers, acquaintances, schoolmates, neighbors, and relatives have been in intensive and hugely successful therapy for most of their childhood and adulthood. Of course, it’s different if “your own money” is the money of your estranged spouse or the money you found in a suitcase someone left at a gas station. Let me offer a piece of free advice, and I’ve never done that before. Free advice goes against the long line of legal precedent and the very spirit of the legal profession. Just last month, an undercover sting operation caught a lawyer dispensing free advice, and he was summarily disbarred without a hearing. But I’ll do it just this one time. Spending your own money on anything is a foolish idea. All things being equal, spend other people’s money. There.
But assuming, very hypothetically, that it is your own money, you’d want a deal which provides that the first money generated by this project goes to you to repay your investment, with interest or with some other sort of premium (1.5 times your investment, for example), and once you’ve recouped your investment with interest or premium you will then participate in the “profits” of the project.
Whether it’s your own money or you will be simply connecting the script with someone else’s funds, you will also want an executive producer or another producer type credit (but of course not “produced by”) and depending on the circumstances an executive producer fee.
A cautionary note: to make your chances of actually being paid your finder’s fee or your money back somewhat more realistic, your contract should state that until you’re fully paid you will co-own the copyright to the script and project or will at the very least have a first priority lien and copyright mortgage on the script and the project to secure the obligations to you. And the papers granting you the copyright ownership or the lien and mortgage should be recorded in the Copyright Office.
Of course, these types of arrangements have a ton of other bells and whistles, and you’d want someone who’s done these deals to go over the contract to make sure you’re protected. But one more extremely important thing. My infant is screaming, and my toddler is biting my foot demanding I read her the “owl book.” In the “owl book,” baby owls wake up to find their mother gone. They’re concerned. They wait and wait and eventually she comes back with food for them. In the version of this book for potential film investors, mother owl flies away after she borrows money from baby owls, and they never see her or their money again.
This blog was originally published as part of Legal Ease, Film Independent’s weekly column on legal matters pertaining to the entertainment industry. To see other LEGAL EASE columns please click here.
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I believe that payment of a finder’s fee is illegal in CA unless the “finder” is a licensed securities broker/dealer. My understanding is that if a non-licensed finder is used without the financier’s approval, the financier’s remedy for a violation can be to demand the return of all funds invested.