Q: So I wrote a pilot with a colleague of mine and we agreed that I would retain copyright, and therefore control of the script, and he would be a 50% profit participant on the sale of the pilot. We also designated the script credits as “Written By” me alone, and “Created By” both of us. Now I’m putting together a production company and I’m going to shoot the project. If/when it comes time to sell the show, how does that affect the deal between my co-creator and myself? How does the studio’s purchase reflect my participation as a production company? I want to keep this as simple as possible… Help.

A: When time comes to sell your show, it’s important that your agreement with your colleague (let’s call him “Jimmy” for the ease of reference) is in writing and signed. If it’s not, the buyer will insist that Jimmy also sign the agreement with the buyer — not just you, and that could lead to all kinds of “misunderstandings” and “differing recollections” about your agreement with Jimmy.

Technically, by writing the pilot together, the two of you are joint “authors” of the pilot as far as the US Copyright Act is concerned. When Jimmy agreed that you would retain the copyright, that was actually a transfer to you from him of his share of the copyright. An exclusive copyright transfer has to be in writing to be enforceable. In any case, all of this legal mumbo jumbo aside, the buyer will want to see a clear chain of title for this script, which among other things will need to prominently feature Jimmy’s signature somewhere.

But as long as your deal with Jimmy is clear and in writing, the formation of the production company should have no impact on it. Make sure, however, that your deal explicitly allows you to assign the rights to the pilot to whomever you want, including your production company. You’d have that right anyway, but it doesn’t hurt.

Also, and this is a commonly unaddressed issue with arrangements like this, when you sell the script, the question of how to allocate Jimmy’s 50% will come up. Of course, if you sell the script for $1 and will have no further involvement with the project, Jimmy is simply owed 50c. But what if you sell it for $1 and get hired to produce the show, which comes with episodic fees and backend? How much of your fees and backend, if any at all, is attributable to the sale of the pilot? After all, you have a financial incentive to sell the pilot for nothing or as little as possible and to capture what you give up on the sale price by increasing your fees and backend.

For example, if the buyer offers you $100,000 for the pilot script and $20,000 for executive producing the pilot episode, this means Jimmy and you split $100,000 50/50, and he ends up with $50,000 and you with $50,000 plus $20,000. But what if you sell the pilot script for $20,000 and you are hired to executive produce the pilot episode for $100,000? Jimmy gets $10,000 and you keep $110,000. By reallocating these numbers on paper, you just made and Jimmy lost, $30,000, and the buyer paid the same total amount.

I’m not suggesting you would do this on purpose, since I’m sure you’re a man of utmost integrity and principle to whom money is just a bourgeois means to an enlightened end, but these allocations are inevitable, and often give rise to disputes.

Your participation as a production company is not really affected, as it would be the studio buying the script who will produce the show, not your production company. All you would hope for is a production company credit for yourself.

By the way, a note about credits: “Written by” you and “created by” you and Jimmy are inconsistent credits. These credits are terms of art under the WGA and generally in the industry. While “written by” is somewhat closer in its technical meaning to its intuitive common sense use, “created by” means nothing close to what its common place meaning is. “Written by” on a pilot script means that you wrote the story of the script and the script itself. “Created by” means you wrote (not just created, but wrote, not conceived, but wrote) the story of the pilot (plus a bunch of other complicated requirements under the WGA which I’m not going to go into here). The only way to reconcile these two credits is to have it “created by” both of you, with “teleplay by” for just you. This would mean that the two of you wrote the story, but you alone wrote the script. Of course, if you wrote the story and the script together, then the most appropriate credit would be “created by” and “written by” both of you.

Now, until this is all under the WGA jurisdiction, you can contractually agree on any credit you want. You can take “masterfully penned by” or “came to me in a dream” credits if you want. But at the end of the day, if it becomes a WGA production, the WGA will determine the credits according to their rules. There are some complex ways to agree on credits among writers to get not quite around the WGA rules but more like along side them, the discussion of which would require more of a treatise compared to this blog. If you feel like getting a headache or getting a bigger one, check this out.

Happy merry Christnukah and Whatnot! Don’t drink and call your ex.

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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