INTRODUCTION

While there are many examples of independent and specialty pictures directed, produced, and written by the same individual, this sort of multi-tasking has hardly become the standard. More often, in this age of moral rights and visionary, individualistic filmmaking, the producer will find himself involved in the demanding and often Byzantine negotiations for the services of even the most enthusiastic and easygoing would-be auteur/director.

Since the director is often one of the first persons engaged on a motion picture (after the writer), and generally is the last person to complete his services on a motion picture (other than the producer) the negotiation of the director’s deal involves a broad range of issues that are in certain cases unique to directors deals. Depending on the personality, the status of the director in the entertainment industry, his experience, the budget and nature of the production, the resolution of who ultimately is in control of the production, who controls the creative issues, who has the final cut, who has the business and financial controls will ultimately set the tone for the negotiation of the other terms and conditions in the director’s agreement.

CONDITIONS PRECEDENT
Customarily, two and sometimes three major conditions precedent, or contingencies need to occur prior to the obligation to use the director’s services and, more importantly, pay his compensation. First, the producer must have a written agreement with the writer of the screenplay and the owner of the underlying rights, if any. Only after the producer has acquired all the necessary rights to produce the picture can serious negotiations with the director begin and the producer becomes obligated to pay the director.

A second condition precedent which is common in director agreements, but is generally resisted by representatives of directors and certainly would not be applicable in situations where the director is directly involved with developing the property,  is a requirement that the producer has obtained all the necessary financing for the motion picture project. Directors’ representatives generally don’t like to see these types of conditions precedent in director’s agreements, as they generally serve to delay payment of compensation and the official commencement of the director’s engagement. But these conditions are common in a director’s agreement and should be noted and dealt with accordingly.

A third condition precedent of the director deal may be the requirement that the producer has engaged one or a number of principle cast members, and has approved the final screenplay, the production budget and the production schedule.

DIRECTOR’S SERVICES
In many cases, the director will be brought onboard to the project as soon as the writer is engaged and will be asked to supervise the further writing, development, and general shape of the project to suit his and the producer’s vision. The director may also be asked to supervise preparation of  a budget based on the screenplay, to conduct and assist in location surveys, to actively participate in the casting process, and to assist in obtaining a completion bond based on the budget and the screenplay.

Customarily, these services are often referred to as development services or pre-production services. Once the star, the cast, the final screenplay, the budget, the production schedule and the locations have been approved, the director will be required to direct the picture, in accordance with the screenplay, the approved budget, and the production schedule.

Additionally, the director will often be responsible for supervising the editing of the picture in accordance with the post-production schedule and the anticipated delivery date for the final, locked cut of the motion picture.

The director often will also be required to supervise the shooting of any re-takes, changes in the movie, the recording and soundtrack, process and special effects shots, added scenes, looping, dubbing, the preparation of the titles and the theatrical trailer, and customarily participate in publicity tours and interviews, and festival appearances.

The issue of how much time a director will have during pre-production and post-production is generally a subject of negotiation. Depending on the budget of the picture, and when the director is actually engaged, it is customary to have an approximately eight week pre-production period prior to the commencement of principal photography, during which time all of the necessary preparations will take place for the production. Directors like to have as much time as possible for the actual shooting time for the film. As a result, may times negotiations will include in the director’s contract the specific number of days the director will have to shoot the film. The negotiation will also customarily include a specific period of time allotted to the director to edit the film and deliver a director’s cut.

While the Directors Guild Of America (“DGA”) Basic Agreement provides ten weeks from the time of completion and delivery of the film editor’s first assembly of the picture for a director to create and deliver his cut. Of course, many independent films that are produced are not subject to the DGA basic agreement and as a result a specific post-production period within which to deliver a director’s cut is prudent to include in the director’s contract, so that budget and post production schedule are not exceeded.

The question of the director’s exclusivity will customarily be negotiated. Typically, directors are engaged on a non-exclusive but first-priority basis for the period of pre-production, exclusive during production and post-production through the delivery of the director’s cut, then non-exclusive thereafter. Many times a director’s representative will insist that after the completion of principle photography, the director’s services are non-exclusive but first-priority rather than exclusive.

THE PAY-OR-PLAY AND THE PAY-AND-PLAY ISSUE
As is customary in actor’s deal, directors generally like to be engaged on a “pay-or-play” basis and prefer to be engaged on a “pay-and-play” basis. Pay-or-play means that the director is paid his compensation whether or not the producer uses the director’s services, subject of course to the director’s breach, disability, death, or events of force majeure (which are essentially acts of God beyond the producer’s control). Pay-and-play means that the producer is not only obligated to pay the director, but also to use the director’s services in connection with the picture. From a financier’s point of view and a producer’s point of view, the pay and play provision is particularly dangerous, especially if there are creative differences, and the production is not on schedule and on budget, or other problems involving the director arise.

Depending on the bargaining position, stature, and leverage of the director, producers can customarily negotiate pay or play provisions which are contingent on the full financing of the picture and usually the engagement of one or several of the cast. However, banks, completion guarantors, and producers generally resist or at least limit the pay-and-play provision by guaranteeing that the director will at least have the opportunity to direct the first three days, the first week or the first two weeks of principle photography prior to the producer having the ability to terminate the director for breach or for creative reasons. The pay-and-play provision is of course always subject to the director’s death, disability, events of force majeure and the ability of the producer to terminate for creative differences after a certain point in time during principle photography.

DIRECTOR’S COMPENSATION
Director’s compensation is customarily dependent on the budget and/or the director’s prior quotes and accordingly varies to a large degree. The DGA agreement provides for a minimum compensation that is fully negotiable to be approved on a case-by-case basis by DGA representatives for a director of a low budget film -- defined as having a budget no greater than $3.5 million. In films budgeted between $3.5 million and $6 million, the director must be guaranteed 13 weeks of work at a total pay rate $99,313 plus a minimum contractually-guaranteed back-end fee of $55,000.00 if and when the film reaches a break even profit status. Once a film’s budget passes the $6 million mark, the DGA guarantees a director’s compensation at $141,947.00 total with any back-end optional.

Since many independent films are not produced under the DGA basic agreement, we have negotiated director’s agreements that start as low as $10,000.00 for all services and go up to well over a million and a half dollars. Richard Donner, the director of such large-budget, star driven films as Maverick, the Lethal Weapon series, and Conspiracy Theory, reportedly earns six million dollars up front against five to fifteen percent of the gross receipts of his film. However, his pictures often have budgets exceeding sixty million dollars, and commercial expectations are for robust business in theatrical and ancillary markets. In the case of Woody Allen, who makes films which invariably cost less than fifteen million dollars, a recent New Yorker article pegged his cash compensation at $450,000.00 against fifteen percent of the grosses -- although Allen serves additionally as writer, and often star, of his pictures, and his presence virtually guarantees name actors working for less than their normal rates in supporting roles. Further down the budget scale, it isn’t uncommon for independents like John Sayles and Nick Gomez to work for a nominal five figure up-front fee and an even larger chunk of the back-end proceeds.

And, as is well documented in this age of Sundance rags-to-riches stories, most microbudget debut filmmakers -- who often serve as producers of their own work -- decline to take a fee on their pictures, and instead provide for deferments for themselves and key cast if, and hopefully when, the film gets picked up for distribution.

For established and studio directors, though, the cash compensation for services is generally paid over a schedule as follows: 20% during the pre-production period, 60% over the course of  principle photography, 10% on delivery of the director’s cut, and 10% on delivery of the answer print or the delivery of the locked picture to the distributor. Sometimes payments are also made on the completion of dubbing or scoring. These payments periods are customarily negotiated, the director’s representative obviously wanting the compensation paid earlier and the producer wanting to hold monies back pending final delivery of the completed film.

DEFERRED COMPENSATION
When the negotiated cash compensation will not meet the director’s current quote for working on a picture, many times a deferred compensation provision will be negotiated which will ultimately get the director up to his cash compensation or his current quote plus whatever increase, if any, the particular artistic demands and/or commercial prospects of the picture entail. The point at which the deferred compensation is payable is general the subject of heated negotiation, as the term “back-end” can have several definitions.

Obviously, directors want deferred compensation paid as soon as possible and with as few possible priorities, i.e., for investors, distributors, producers and the like before the director’s deferred compensation kicks in. The point at which deferred compensation is payable to the director is also dependent on the stature of the director, and will also vary based on the type of picture being produced and how it is financed. In purely independent motion pictures, when private investors fund the entire movie, a director’s deferred compensation will generally start to be paid after the investors have recouped their initial investment plus whatever premium has been negotiated on top of the investment. For example, sometimes this will be negotiated as a point after which the investors have recouped 125% to 175% of their investment.

On a studio motion picture, deferred compensation could be payable at the point which the studio receives 2.5% of the negative cost of the picture, or at the point in time immediately prior to the payment of the net profits of the picture. Generally, the director’s deferred compensation will be paid pro rata and pari passu with any other deferred compensation payable in connection with the picture, such as that of the producer, writer, or leading actors.

The subject of what actually constitutes “negative cost” will also be a matter of negotiation. Does negative cost include simply the cash cost of the picture? Does it include any interest? Does it include financing costs and fees? Does it include any other deferments? Does it include any studio or producer overhead -- which can amount to 15%-25% of the actual budget of the film, depending on the producer or the studio? The ultimate definition of the negative cost will generally determine how soon the director receives his deferred compensation.

ADJUSTED GROSS RECEIPTS/NET PROFITS
The subject of adjusted gross receipts/net profits is one that has been written about considerably, mostly due to the maze-like accounting practices associated with the production and distribution of feature films. Suffice it to say, numerous books, articles and lawsuits have dealt with this issue ad nausea. See Fatal Subtraction by Pierce O’Donnell for one of the definitive treatments on the subject. As a general rule, net profits will be reached after the distributor takes its distribution fees, which range from 15%-45% of the gross revenues, the negative cost of the picture, including any interest and financing charges, overhead charges, all gross participations, if any, all deferred compensation, if any, and finally, the net profits kick in.

The term adjusted gross receipts is essentially a modified net profit definition, that eliminates or reduces the overall deductions referred to above in the definition of net profits. Generally, the director’s contingent compensation either is payable from the adjusted gross receipts or the net profits and will range anywhere form 2.5% to 15%, but as noted above, specialty talent often have their own preferred profit cuts of the picture staked out long before the deal is signed. As always, the status of a director and his bankability is a key factor in the profit breakdown.

One way to agree on a definition of net profits/adjusted gross receipts is to tie the definition to the most favorable definition accorded to any other participant in connection with the picture, particularly a star or a strong producer’s definition. This is easier said than done, however. The Hollywood Reporter recently noted that “Armageddon” director Michael Bay -- the helmer of two previous major hits, “Bad Boys” and “The Rock” -- did not receive gross points on the picture despite the fact that he shared producer credit with Jerry Bruckheimer, who did receive gross points. Star Bruce Willis also reportedly has a large back-end take on the film. Invariably, the larger the budget of a picture, the fewer the profit points that will be available for negotiation.

When the director is the strongest and most experienced creative player in the film, as often are Donner, Allen, and Sayles, the other cast members, the producer, and the writer will attempt to tie their definition to the director’s.

In any event, in order to cover the downside risk, it is certainly a good idea for the director and his representatives to make the director’s definition of net profits/adjusted gross receipts no less favorable than any other participant involved in the picture, while at the same time, negotiate the best possible profit participation and definition one can for the particular director involved.

CREDIT
In DGA pictures, the director’s credit is rarely the subject of much negotiation, simply because the Director’s Guild -- long an advocate of the director’s innate “authorship” of a motion picture -- has legislated in its collective bargaining agreement with its signatory companies, the director’s credit as the last credit to appear in the main titles on the screen in a size no less than seventy percent of the non-process animated title of the picture. Additionally, the Director’s credit is required to appear in all paid ads subject to customary distributor limitations and exclusions. Directors also generally negotiate an additional credit know as the “film by” or possessory credit (currently the subject of considerable debate with the Writers Guild of America), which usually appears as one of the first credits on screen and one of the first credits in all paid ads. Customarily this “film by” credit will appear above or below or below the title both onscreen and in all paid ads.

Where the DGA is not involved it is important to remember to negotiate on behalf of the director both credit provisions to specify when and where these credits will appear. The “film by” credit is considered particularly prestigious and in many cases will not be haphazardly granted to first-time directors, although it appears to be becoming more prominent even for first time directors. It is also customary to negotiate whether or not the credit will appear in posters, on billboards, on the video box artwork, and on soundtrack album covers or liner notes.

Generally the size of the director’s credit is a certain percentage, somewhere between 50% and 100% of the size of the picture’s “regular” title and anywhere from 15%-35% of the size of the artwork title of the picture. The regular title is generally the title used in the billing block  for the advertisement for the picture and the artwork title is the stylized unique graphic version of the title used in most display and electronic ads for the picture.

Co-director credits have become more prevalent in the past few years. They are not permitted under the DGA Basic Agreement unless the directors are siblings (where the credits have read, for instance, simply “A Hughes Brothers Film” or “A Farrelly Brothers Film”) or a specific waiver is granted by the Guild. It is important to negotiate and determine whose name goes in first position both on screen and in paid ads when co-director credits are involved.

APPROVALS, CONTROLS, FINAL CUT
As a general rule the producer will have the complete and unconditional right to cut, edit, add to, subtract from, arrange, rearrange and otherwise revise the picture in any manner the producer may in its sole discretion determine. The producer also retains total access to all phases and production and post production including all rights to view the dailies, the rough cut and all subsequent cuts of the picture. Although the producer maintains these rights, it is customary to allow the director to complete his initial cut of the picture. Under the DGA agreement, this cut is customarily referred to as the “DGA cut” or the Director’s Cut.

Many independent films are not made under the DGA agreement, but some are. As mentioned above, the DGA cut is the cut made by the director immediately following the editor’s first assemblage of the film. Some prominent directors have been able to negotiate final cut for themselves, but this usually happens when the director is also one of the film’s producer’s, or when a director agrees to provide a final cut which must contractually meet a specified MPAA rating. Other directors are not able to negotiate for final cut for the theatrical release version of the film, but may attempt to negotiate for the right to create a “special edition” or “special director’s cut” specifically for the film’s release on home video, laserdisc, and/or DVD.

Certain unique producer/directors -- the Oliver Stones, Stanley Kubricks and Steven Spielbergs of the world -- generally have long (even unlimited) periods of time to prepare and deliver their respective Director’s Cuts, and as producers of their own films, the release version will differ very little if at all from the Director’s Cut. As for the rest of the world, this Director’s cutting period will vary depending on the budget of the picture. Typically the time used to prepare the Director’s Cut has been carefully allotted and budgeted as there are release requirements and bank loans with interest running that have to be repaid. Hollywood is replete with stories of first time directors who were unable to deliver a sensible product  in the time allotted, or abused their rights to create a Director’s Cut. Most recently, director Tony Kaye, a respected commercial and video director, has been embroiled in an ongoing dispute with New Line Productions (a division of DGA signatory New Line Cinema), over the editing of his debut picture “American History X.” The press has documented Kaye’s displeasure of New Line’s revisions of his DGA cut, however, New Line’s rights to change the editing of the picture were perfectly within the DGA Basic Agreement as well as their contract with Kaye. Still, the editing, revision, alteration or modification of a director’s original “vision,” regardless of the legal and collective bargaining controls, remains a touchy subject in Hollywood.

The editing of the picture brings up several contractual negotiating points in its own right. Many times directors will ask to have at least consultation and sometimes approval over the location of the editing and post production of the picture. In the independent financing arena, post production may indeed take place almost anywhere in the world and as a result of various financing and production subsidy programs, producers will often require certain services to be performed, and/or facilities to be used, and/or monies to be spent in those jurisdictions, which are providing either government or other sources of financing for the picture. Canada, France, the UK, and Germany are particularly popular places to perform post-production services, as a result of the incentives, financing opportunities and subsidies available in those territories. Directors may or may not want to travel to those locations so it is important to agree on up front where the post-production, editing, and additional effects and sound work will be performed.

It is also customary to specify in a director’s agreement that the picture, when completed, will be delivered with a specified MPAA rating. Usually that rating is to be no more restrictive than R®. Additionally, it is customarily specified that the picture, when delivered, will be no less than ninety five minutes as well as no more than one hundred ten minutes in order to meet certain territorial and broadcast time requirements and so that it will not be so long that it will affect the budgeting of additional costs and expenses needed to complete the movie as well as to make prints, and also so that it won’t affect the number of theatrical runs the picture can expect to have on a daily basis.

Because many directors like to test the movie for live theatrical audiences before they deliver their final director’s cut to the producer, it is also customary to negotiate, if the budget permits, one or two paid public previews to assess the audience reaction to the picture as well as additional cutting periods beyond each preview, so as to be allowed to cut the film in response to the previews. Customarily, directors will ask for two cuts and two previews, although many independent films have neither the budgets to perform those previews nor a director willing to subject his vision to decision by committee.

Directors are also asked in many cases to deliver a “television version” which will satisfy the prevailing United States network and cable broadcast standards and practices departments and enabling the picture to be broadcast and transmitted into homes with children on those outlets as well as on foreign network television.

Directors will also many times request that they be involved in the supervision of any and all additional cuts and edits of the picture which may be required for airline versions, non-theatrical versions, the laserdisc and/or DVD release of the picture, and any other versions that may be required to be made for ancillary exploitation of the picture in various media formats.

Directors generally want at least full and meaningful consultation and sometimes negotiate for approval of the individuals engaged for the director of photography, art director, assistant directors, the productions designer, editor and composer of the picture, as well as locations and other key creative decisions affecting the picture, while a producer will customarily retain the final approvals with respect to all of the foregoing.

The producer will also want to have a special clause indicating that the director has approved the budget and will direct the picture and post-produce and edit the picture in accordance with the budget. Additionally, both the completion guarantor and the producer will require an inducement letter signed by the director stating specifically that he has reviewed the budget and the schedule and that he will be able to deliver the picture on time and on budget, and as a material inducement for the completion guarantor, to enter into the completion guarantee agreement whereby the guarantor guarantees delivery of the movie, the guarantor has indeed relied upon the director’s statements in the inducement letter to furnish the completion guarantee. As a result, many times, if the picture appears to be beyond schedule and over budget, the guarantor will have additional leverage with the director, by means of asking the director to reduce his salary or furnish a portion of his salary toward a the budget of the picture, if indeed the picture is not on budget and on schedule. The guarantor will also have the potential of holding the director in breach for failing to stay on schedule and on budget.

In order to be able to comfortably and efficiently do his job, depending on the budget of the film, the director will usually request that he have available to him for exclusive use an office and/or an assistant or secretary (at least during the pre-production phase and the production phase until the picture wraps). In many independent films, this is certainly a luxury and is simply not available. On modest budget films, the negotiation will generally focus on the number of weeks that the assistant will be available to the director during the production and thereafter during post-production.

SUSPENSION AND TERMINATION
Suspension and termination clauses in any motion picture contract are important, but due to the nature and influence of the role of the director in any motion picture, suspension and termination clauses are essential and must be carefully negotiated. Most directors agreements allow the director to be suspended and/or if applicable, terminated in the event of the director’s incapacity, death, the occurrence of events of force majeure, or any willful or negligent failure or refusal or neglect by the director to report to work and render director services in accordance with the terms of the directing agreement.

Additional clauses for termination which customarily appear in directors agreements include: the picture being more than ten percent over-budget and/or the production schedule being more than ten percent behind. Another clause that is beginning to appear more and more in the suspension and termination sections of the director’s agreements is the right to suspend or terminate for the inability or failure to render services by reason of the ingestion or injection and/or intoxication by drugs or liquor. Director’s representatives obviously resist this clause as much as they possibly can, but they do appear to be relatively common in director agreements. One of the ways that directors representatives can limit the harshness of these restrictions is to negotiate a “cure period” which allows the director somewhere between 24 and 72 hours to cure any material breach of the agreement. Additionally, depending on the length of the production schedule, the director will customarily have five to ten days of disability or incapacity before the director’s services can be suspended and/or terminated for illness, sickness or some other sort of incapacity.

It should be noted that if the picture is properly insured, most of the picture’s costs and expenses incurred in connection with the director’s incapacity should be covered under the insurance policy, which could mean shutting the picture down for the duration of the incapacity.

EFFECT OF SUSPENSION
In the event that the director is suspended for breach, disability, or force majeure, the agreement will customarily remain in effect for the duration of the suspension. As a result, the director will not be allowed to render services for any other entity in the entertainment industry during the suspension. During the suspension, payments are customarily terminated until the lifting of the suspension. The director’s representatives will argue that in the event of a suspension of the director for an event of force majeure, then the producer would have to suspend all other personnel in connection with the picture, as well. If the producer is unwilling to suspend all other personnel, then the suspension of the director would be contractually unavailable. It is also customary to provide that, in the event of force majeure for more than eight consecutive weeks, then either party, the producer or the director thereafter would have the right to terminate the agreement. In the event that the director terminated the agreement, the producer would customarily have the right within one week of the notice of termination to reinstate the director.
The director also customarily negotiates a provision that says that if the producer reinstates anyone else during or as a result of events of force majeure, then the director would also be reinstated himself.

EFFECT OF TERMINATION
Generally if the director is terminated for any sort of material default or breach, no further sums, either cash or contingent compensation, would be payable to the director. In some cases, the agreement specifies that if the director had been previously paid any money, that either the director return the sums paid or that the producer would be entitled to, in addition to any other rights and remedies it may have, to bring an action to recover the amounts paid to the director. The theory underlying this position from the producer’s point-of-view is that it is the essence of the agreement that the director complete and deliver all materials of the picture to be delivered under the contract and that the aggregate amount to be paid to the director constitutes payment for all services and materials to be delivered and is not allocable to portions of the movie as the same are completed and delivered to producer. The director’s representatives will argue that the director is entitled to the same proportion of the negotiated fee as the proportion of the total services that the director actually performed. The party with the most leverage will usually prevail.

If the termination is based on an event of force majeure or disability, the director is customarily entitled to receive and retain all compensation which has been due or is accrued prior to the termination for disability or force majeure.

With regard to deferments and contingent compensation, it is usually agreed that if the director is suspended for disability or force majeure and ultimately the picture is completed, then the deferment and contingent compensation would be payable in that proportion and that the footage that was directed by the director and appears in the picture bears to the total amount of footage in the picture as actually released. Sometimes this amount is reduced by one half of the contingent compensation, if any, payable to the director who actually completes and delivers the picture.

DIRECTOR’S & PRODUCER’S REMEDIES
In the event that the producer breaches the agreement, the financing entities, banks, and completion guarantors, as well as the studios customarily require a provision that states that the only remedy available to the director for the producer’s breach would be an action at law for damages. In no event would the director be entitled to terminate the agreement, rescind the agreement, obtain an injunction against the distribution or exploitation of the picture, or seek and obtain any other equitable relief. On the other hand, the producer, which will have invested considerable sums and services in connection with the production of the picture, generally has a provision in the director agreement which allows the producer to obtain an injunction against the director if the director chose not to honor the agreement or attempted to work for some other entity during the exclusive period during which the director was to be engaged by the producer.

REMAKES, SEQUELS, PREQUELS, AND TELEVISION PRODUCTIONS
It is customary for directors to negotiate a clause that provides that so long as the director did not breach the agreement and timely completed and delivered the picture in accordance with the budget and the shooting schedule, and provided further that the director is then available and ready, willing , and able to perform directing services, and that he is then active as a director in the motion picture and/or television business, then the director would have at least a first negotiation and sometimes the last refusal, to render services as the director of a remake, sequel, prequel or television movie or pilot for a television series based on the picture. In a situation where the director has written a script as well, and the parties do not want to spend a lot of time negotiating what would happen on future projects based on the film, producers and directors sometimes agree that any remakes, sequels, prequels, and television series would then be frozen and thereby controlled by both parties unless and until an agreement is made by the parties for the services and/or passive payments to the original writer/director of the picture. There is usually a provision which is included in the remake and sequel clause which provides that in the event the picture is a theatrical remake or sequel, then the floor of the financial terms of the agreement would be the terms of the initial agreement engaging the director for the first picture. It is extremely important to specify that this “floor” applies only to theatrical remakes and sequels, as I’ve encountered situations in the past where the negotiated floor was a blanket floor for all productions and where a director received significant compensation on the initial theatrical motion picture and the floor for the negotiation of the director’s fee on the television pilot (which would necessarily be produced for far less money than the theatrical feature) would obviously be way out of line for the budget of the television pilot.

WORK FOR HIRE; WAIVER OF MORAL RIGHTS
In the United States it is customary for the director’s agreement to include a clause which states that the director has performed all services as a “work-for-hire” for the producer, and that all rights in and to the director’s work, including the copyright therein, will automatically vest in the producer as the “Author” of the motion picture in accordance with the U.S. Copyright laws. This clause is essentially required to preserve the producer of the financing entity’s ownership rights in the picture under U.S. law.

It is also customary for the director to sign a waiver of moral rights. Moral rights are predominant in Europe but at this time not extensively recognized in the United States. Moral rights are the rights considered to be innately ascribed to the creator of a work of art. These rights entitle an artist to maintain the integrity of his work. Through the Artists Rights Foundation here in the U.S., several major directors are attempting with some success to preserve motion pictures in their original version as well as instituting a labeling system for television and airline versions of films that have been altered from their theatrical version.

However, because of the way motion pictures are financed here in the United States by banks, completion bonds, other lending institutions and studios, the concept of moral rights is often unacceptable and most director’s agreements include a moral rights waiver.

TRANSPORTATION AND EXPENSES
When a director must travel more than fifty miles from his principal place of residence to render services, a provision will be included in the director’s contract to provide for first class transportation (under the DGA) as well as a first class hotel, per diem and transportation to and from the set and to and from the airport. The per diem will generally be a function of the director’s prior quotes. Many times the agreement will simply specify that the director’s expenses will be that of those which are included in the budget of the picture. Directors are now typically negotiating provisions which provide for transportation and expenses to all major premieres, preview screenings, screenings and debuts at major festivals and markets such as Cannes, Sundance, Berlin, and New York and the director will customarily ask for and obtain the right to bring a guest to these functions as well. On large budget movies, the director will also attempt to negotiate a provision which provides him with a trailer equal in size and amenities equal to those accorded the star of the movie.

PUBLICITY SERVICES & PUBLICITY CONTROLS
Because the director is considered the “auteur” of the motion picture in many territories around the world, and because the press and festivals generally want to interview the director and/or incorporate him into the presentation of the motion picture, director agreements generally have provisions which require directors to perform reasonable publicity and promotional services in connection with the picture at no additional cost other than travel expenses and per diem, subject of course to their current availability. The producer will also obtain the right to use the director’s name, likeness, photograph and biography in connection with the advertising and promotion of the motion picture, so long as the director is not depicted as using, endorsing, or promoting any product, commodity or service without his consent.

On the other hand, director’s agreements customarily also have restrictions on the director issuing any publicity or statements which are derogatory to the picture and indeed the director’s agreement will almost always have a provision which states that the producer will have the right to  control any and all publicity relating to the picture other than the director’s incidental reference to the picture and the fact that he directed it in his own personal publicity releases.

When dealing with directors who are also actors or are for whatever reason more visible in the artistic community than is the norm, producers may have to bend on certain publicity provisions. Kevin Costner, Clint Eastwood, and Mel Gibson, all of whom have directed major studio pictures in which they have starred, are known to be mercurial in their negotiation of publicity appearances, as excessive interviews and press junkets may impact their separate acting careers negatively. In any event, these individuals will often negotiate only a few key appearances on the major shows as opposed to agreeing to participate in a multi-day, full scale junket in support of the picture. As a rule, when dealing with an actor-director, the producer will want to carefully negotiate appearances and interviews to maximize the visibility of the picture without marring the director’s public image.

INSURANCE MATTERS
Director’s agreements generally require that the director submit to a medical exam so that the director can be insured against losses arising out of the director’s incapacity or disability as well as for purposes of obtaining a completion bond. The press recently reported that legendary Italian director Michelangelo Antonioni failed his insurance required medical exam, and as a result, was forced by the producers of his new film to appoint a “back-up” director in case he was incapacitated for any reason.  Most agreements provide that unless the producers can obtain an insurance policy at a reasonable or budgeted premium, then the producer may terminate the agreement. The director on the other hand will negotiate a provision requiring his right to have his own personal doctor present during any examination, as well as to get a second opinion in the event that an examination renders the director uninsurable. The director will also negotiate a provision which allows him to pay any extraordinary premium or cover an extraordinary deductible in the event that the director cannot be insured at customary premiums within the budget of the picture. The director will also customarily obtain a provision which provides that the producer will name the director an additional insured in the production’s general liability insurance policy and the producer’s errors and omissions insurance policy and provide the director with a certificate of coverage under those policies. The coverage of the director would be subject to applicable deductions, deductibles and exclusions, and would only cover claims or liabilities arising out of actions within the scope of actions, duties and services under the director’s agreement.

VIDEOCASSETTE, LASERDISC, VIDEODISC AND 35MM PRINT
The director will usually negotiate a provision providing that the director will be entitled to a free copy of the picture on videocassette, laserdisc, videodisc, and DVD when each such device becomes commercially available. Major directors will also usually negotiate for the right to retain a free 35mm print of the picture. The producer will generally require the director to sign the producer or distributor’s customary anti-piracy/private use lending agreement, which provides that the device is being lent to the director and is not to be released or otherwise copied or used for anything other than the private, non-commercial use of the director.

NO QUOTE DEAL/CONFIDENTIALITY

Many directors agreements also provide that the terms and conditions of the director’s agreement are strictly confidential and will not be quoted to any third party unless required by law. This provision benefits the director and the producer or studio where the director has agreed to work for less than his normal fee or the studio has broken certain studio precedents or policies to land a certain director.

CONCLUSION

Perhaps the most challenging aspect of drafting, negotiating and executing the director’s agreement is the sheer weight and importance of the task. In hiring the director -- and engaging in active discussions over the points discussed above -- the producer is closing the deal for an individual who has to be his key artistic partner during the making of the film. In this regard, director’s agreements are often the most sensitive agreements negotiated on a given motion picture. The potential for budget overages, bruised egos, and/or the director feeling his artistic credibility being undermined before a reel of film is shot, is high.

Generally, it is important to engage the director as early as possible in the process of making the picture. Bringing a strong visionary and a born leader to the team after ironing out all of the issues raised above can only help in making the production run as smoothly as possible.