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Subsidiary Rights — Ralph Sevush/David Faux

June 13th, 2011 2 comments

Subsidiary Rights

I went to several presentations by Ralph Sevush, Executive Director for the Dramatist’s Guild; often, he was accompanied by David Faux, Director of Business Affairs, whom I met at the Cleveland event hosted by CPT: Holding Our Tongues: Censorship in the Theatre. These were some of the most valuable and astonishing talks. Probably the most astonishing point, a truly horrifying point, brought up during the talks being attempts by directors to attach copyright ownership to playwright scripts for changes in stage directions. My God!

Faux began by discussing the terminology of Subsidiary Rights: common understanding being — corporate — wholly owned subsidiary — this thing that exists for the benefit of the other thing. They both went on to discuss that in any main production of a play/musical — certain rights are triggered; and that these rights exist purely due to the main production; successful productions have other descendants: for instance, a successful play may result in publication, which is a subsidiary right: another production elsewhere at a higher level of prestige, a movie, etc.


Probably one of the most troubling things that Sevush pointed out is that there are works can get encumbered to the point that they are unproduceable. This led Sevush to caution that playwrights must pay attention to what is happening at the front end of the process. For example, a play gets produced in 2 LORT theaters at 5% each and has an equity showcase at 5% and a director has attached some % to it; by the time the show gets to NY there is already upwards of 15%-20% taken off the top. This may result in not enough of a %age left to make a producer interested in the show: and so it never gets produced. That is frightening.

Often subsidiary rights have to do with proximity to the event or direct lineage of benefits (subsequent to). That is, if a show is doing great and someone in the audience says, hey we should make a movie of this, there is a connection between the production and the movie, that triggers certain subsidiary rights. However, if a movie of a play is made 10 years after it has been staged, that connection is no longer direct and subsidiary rights may not be triggered.

Additionally, during a production contracts often grant rights to a producer–stage production, tchachkes, souvenirs, albums (ancillary); but there are rights that you reserve.

For the explicit record, a playwright owns his/her play.

During any production the producer gets limited license; as the playwright you own the right to re-license; tabloid productions; derivative works; subsidiary rights are rights subsequent to a production and do not have anything to do with the main rights—or Grand Rights, of ownership of the script property.

Producers make profits from the production, as do investors. But often it may not be enticing enough for the investors to simply back a play; so they are enticed by participating in a revenue stream that goes beyond the production; that is, by promotions, souvenirs, etc., producers assert that “we have added value that goes beyond the original production” (producer) – and that investors will get a piece.

Sevush notes that this line of thinking was important when shows had to pay for themselves; but that as time goes on there are changes, especially with non-profit “producers” entering the picture. Further, that it is not the same rationale for NonProfit theaters to advance the initial rationale (revenue stream); that ForProfit producers advanced.

Broadway model of subsidiary rights: 40% of revenue for 18 years subsidiary rights share (model from broadway) just to open (that is, the play opens one night and then closes). Think “The Producers” begging for a flop.

Sevush proffered an equation: %, duration, territory = parameters get negotiated (how much, for how long, where). That is, the percent of the revenue share, the amount of time over which that share will persist; the scope of the territory or domain in which that rule applies.

Broadway producers get the greatest commercial share of subsidiary rights, usually descending (40% 10 years, 35% next year, 30% next, etc.); get a certain percentage for film over the lifetime of the deal.

40% for 10 years (off broadway); 21 performances with a press opening gets 10%; 32 performances gets 20%, etc. scales. Industry standard

LORT = 5% for 5 years (standard) concession by DG; though a concession based on not fighting about it; this is being re-considered now by the Guild.

For a show produced on Broadway the territory is US and Canada.

Sevush encouraged those in attendance to think of subsidiary rights as a rock in a pond (broadway is a big rock). There are different rights based on the venue and purpose of the event: equity showcase; LA equity waiver for spaces with less than 99 seats, etc.

Sevush posits the question: what value have the producers added? reviews? etc

Sometimes they’ll ask 2-3% equity showcase; what does the author get on the front end? if the producer gives you no $$ / royalty, etc. then they should not be asking for $$ on the back end. If you paid me nothing, why am I paying you?

What has troubled Sevush is the expansion of this approach to taxing subrights for developmental workshops and festivals; as Sevush points out, theaters haven’t even produced your work, you have self-produced (in a festival) fee to apply, likely a participation fee, pay a chunk of the box office (if you get anything), and you don’t control the schedule, location, press, etc. AND these theaters want subsidiary rights, perhaps something like 2% for 7 years.

Sevush is even more incredulous when looking at Not-for-Profit; that these theaters get the benefit of tax exemption and exist for charitable purposes so they should be taking the risk of a for-profit theater w/o sticking it to the artist.

I both agree and disagree with this perspective; having received a Certificate of Non-Profit Management at Case, I know that the notion that Non-Profits not profit from something is misconceived. The signature point of Non-Profit status being that any financial benefits may not “inure” to any individual. That is, money that goes into a Non-Profit must, by law, go to the organization and not to any individual, i.e. shareholder, as in a For-Profit corporate model. I do agree with Sevush that there is a charitable purpose for which these organizations exist and that the “shareholder” who should benefit (or one of them) from the operations of the NP is the artist; and that NPs that gouge artists are looking in the wrong place; as Sevush points out in his article in the Sept/Oct 2010 issue of The Dramatist. (However, I will point out that PBS has suffered for never adequately taking steps to recoup %ages from Sesame Street back in the day.)

Some definition was given to theater classes:
1st class (broadway 1,000 seat theaters, actors, etc at top of their rates)
2nd (500 seat houses, etc)

Middle tier theaters tend to be non-profit; often plays will be produced with regional theatres and those theaters will take the hit but a certain % will be loaded into contracts so that they benefit from future rights in NY if it goes to Broadway, for instance. Pay option rights for future.

Must keep in mind the question “What is the value added?” Not just perception, but the actual amt of $$ they’ve invested in the production. For instance, Sevush asks, “If you’re produced in Peoria are you getting the same value as if you’re produced in NY?” For instance, Samuel French will not publish the print copy of a play if the show has not been produced at a commercial or Non-Profit theater in NY.

Goal for contracts will try to get the larger production share to be picked up by the next producer up–so if you option 5% of your subsidiary rights to Peoria and the show goes to Broadway where they take 40%, you want to get a contract that has the initial 5% absorbed into that 40%.

Probably one of the most troubling things that Sevush pointed out is that there are works can get encumbered to the point that they are unproduceable. This led Sevush to caution that playwrights must pay attention to what is happening at the front end of the process. For example, a play gets produced in 2 LORT theaters at 5% each and has an equity showcase at 5% and a director has attached some % to it; by the time the show gets to NY there is already upwards of 15%-20% taken off the top. This may result in not enough of a %age left to make a producer interested and the show: and so it never gets produced. That is frightening.

You own the property; if they want a piece they have to come to you.

Examples of when %ages might be requested: Actors where there is an improvisational component; Directors might want; 0-10% based on a “good production”; Dramaturg might want a piece (RENT case).

The Playwright licenses the play to the producer who then hires the director; so you as a playwright should NEVER sign any agreement with the director.

Scenic designers can get re-use fees if the design is re-used, but the producer should pay this fee and it should not come out of the playwright’s contract based on %ages.

Book doctors/script doctors. Commmercial. Producer can replace the author if the work is based on an underlying original work. The producer owns the underlying rights of the work.

SDC (society of directors and choreographers) they are a union; they are employees; they get paid fees, have health insurance, etc. That is, a writer runs the risk of never getting anything (no read, no produce, etc) but a writer is not similarly situated with a director–who has certain benefits.

Article — DG is attempting to role back some of the rights that np theaters have presumed to take with regard to subsidiary rights. For instance, the NY Public has waived its interest in the first $75,000 the author makes after the production. Still 10% over 10 years. “Windfall”. There’s other ways, fees up front and % of the door to the theater, with no subsidiary rights. LORT 5-7%.

Publication rights (Sam French) if the play wins the festival. When you sign up for the festival there are certain things that you agree to.

Other People’s Property

June 15th, 2011 No comments

Real People and Musical Scores

Other People's Property

Real People

Using real people in your fiction or playwriting can throw you into a truly tricky environment.  Generally, if the real person you are using as a character is no longer alive, you’re off the hook.  However, this doesn’t mean that you still can’t be sued (of course). One of the stickier points with regard to using a real person, living or deceased, has to do with what are called “publicity rights” or the Right of Publicity. These rights concern the property right that any person exercises over his/her public image.  As a rule, it seems, the intent of using a public figure’s image or likeness has to be purely for commercial purposes in order for a Right of Publicity suit to work. This is to say, that using a real person in a play or fiction is an artistic use of a person and can be held to be an act of speech, which is protected by the First Amendment–which trumps the Right of Publicity. However, if you’re writing copy for a radio advertisement that uses “Heeeeerrre’s Johnny!” as one of the lines, you likely have used the late Johnny Carson’s Right of Publicity, and, as it is a property right, lives beyond his death and his family/estate can sue you for the use of it.

The Right of Publicity is a property right in many states, and the enforcement is left to the statutory definitions passed in the legislature.  The Right of Publicity is not a federal statute, nor is there any such thing as a privacy right or a right of privacy to which to point (legal fiction).  See Griswold v. Connecticut; and Roe v. Wade.

Beyond the question of the Right of Publicity is the question of defamation. There are several factors that must be considered when determining if there is defamation:

  • Statement must be untrue
  • published to 3 parties (publication)
  • must related to a living person (identification)
  • lower the reputation of the person (damages)
  • knowledge of untruthfulness (malice)

Note that defamation can also apply to a corporation for all of you activist, anti-corporation playwrights out there. 

There is also a thing called defamation per se (false statements that are immediately considered harmful)–saying that an accountant is a thief; saying that a love rival has an STD; suggesting that someone engages in criminal activity; etc.

For clarification (and the record) libel and slander are forms of defamation (libel is published; slander is spoken).

In the talk given by Sevush and Faux, Faux stated adamantly that “dead is good”; that there is no libel or invasion of privacy for deceased people.  Again, you would have to consult the intent and purpose of the work to determine if Right of Publicity concerns rise to the surface.

With regard to well-known or public figures, the so-called “public figure doctrine” applies (from which the phrase “absence of malice” originates). This doctrine states that “prominent public persons must prove actual malice on the part of the news media in order to prevail in a libel lawsuit. Actual malice is the knowledge of falsity or reckless disregard of whether a statement is true or false.” citation So, you can feel  free to use a public figure in your play, but you had better be certain that your intention is not malicious and that your assertions are absolutely true or are likely true given the inference of certain verifiable facts.  That being said, Sevush pointed to a growing trend amongst high-paid lawyers to engage in what is called “venue shopping” for suits.  For instance, the United Kingdom as a far lower threshold for proving defamation than does the United States, so lawyers might sue you in the UK, get the ruling they want, and then seek to have the ruling imposed in the United States. From what Sevush and Faux stated there are efforts underway in the US to stop this sort of activity from occurring; as it undermines US law.

According to Faux and Sevush, these factors regarding Defamation and Right of Publicity make themselves pertinent to you whenever you license a play to a producer.  That is, you often must sign a statement to the effect that you “warrant and represent” that you own the rights to whatever it is you’re publishing or licensing for performance. The contract might also make you “warrant and represent” that there is nothing defamatory in your work.  Sevush cautioned that playwrights should not make “over-broad declarations” in any contract that they sign–nor should you be forced to–for instance, that your play is not obscene.  Sevush noted that obscenity is decided locally and producer has to decide what he/she/they want to produce and where to produce it–NOT THE PLAYWRIGHT.

Again, the discussion of the Rights of Publicity came up, with a few relevant past cases being highlighted — celebrity (pecuniary, name/likeness for commercial purpose)

Often the contract that you sign with a producer can be accompanied by E&O Insurance, short for errors and omissions.  Faux and Sevush encouraged that you should ensure that you are included on this insurance policy if a producer gets it.

Found Scores

Should you use music in your play?  If you are, chances point to the fact that you should get permission to do so.

There are several places that you can go to license music:

When it comes to licensing there are small rights and there are grand rights.  Here is a link to a website that outlines some of the rights that pertain to music and performance. According to the website I link to above, small rights are called “nondramatic performance rights;” and grand rights are called “dramatic performance rights”.  Unfortunately, that sounds clearer than it is.  For instance, simply using the song in a play is not in-and-of-itself the “dramatization” of the song, and so may only require “small rights”–as a song is not inherently dramatic.  If, however, you are “dramatizing” the song, you will need to get “grand rights”.  So, if for some reason you decided to make a play out of the song “Me and Bobby McGee” you would have to get “grand rights.”  Grand rights are usually held by the writer of the song.

Faux and Sevush pointed to ASCAP, BMI, and SESAC for small rights.  Faux and Sevush also noted that grand rights can pertain to the whole of a work — but might also qualify if you are using music to advance the plot or character development in your play. Regardless, they both note that you should assume that you should have to get permission.

Grand rights are what playwrights own with regard to their script (use of songs in a narrative or dramatic way).

Sevush and Faux also discussed parody (fair use, valuable form of comment and criticism) on the subject that is being discussed. They pointed to the use of Roy Orbison’s song “Pretty Woman” by 2 Live Crew.

Parody/Satire Distinction

Parody is directly making fun of one thing, but Satire is using one thing to comment on or make fun of something else (Dr Seuss / OJ Case)

Licensing Music for Your Play

Music should be licensed by the producer.  Sevush was careful to point out that if you, as a playwright, are indicating the use of music in your play that you should note the following distinction:

  • Use the words, "and then a song like comes on the radio…"  producer pays
  • Use the words, "and then Born to Run by Bruce…" comes on the radio playwright pays

One question that I had, which I didn’t get to ask, is what happens when you contact one of these companies on multiple occasions and get no response?  For my part, in my most recent play Patterns, I went right ahead and used the music.  I figured, if some music publisher made a stink about it, I had the multiple unanswered emails to demonstrate that I had made an effort.

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