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THR Esq. reports today that Jeremy Piven’s mercury poisoning excuse for leaving the Broadway production of “Speed The Plow” last season is sufficient, and he’ll not be liable to the producers for breach of contract, or other claims.  Here’s the story:

Arbitrator accepts Jeremy Piven’s sushi explanation–THR, Esq. – Entertainment and Media Law.

Interestingly, the show managed to recoup its investors’ money before it closed, partly, some suspect due to the publicity around Piven’s departure, and replacement by the likes of Norbert Leo Butz and William H. Macy.  So, had the producers prevailed in their complaint against Piven, the measure of their damages is anything but clear.

“What’s the difference between a lead Producer and a Producer?”.

Download audio file (EntertainmentLawUpdateEpisode4.mp3)
Download Episode (right click)
Approximate Running Time: 1:14

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It all came crashing down late in the decade, when it came to light that the company had been engaged in some very creative accounting.   Max Bialystock has nothing on these guys!

In 2002 Drabinsky and his colleague Myron Gottlieb were arrested in Canada and charged with fraud and ere convicted  earlier this year.  On August 5th, after proposing to the Court a sentence involving community service and a speaking tour (it seems the song-and-dance never stops).. the two men were sentenced to seven and six year sentences, respectively.

Although the sentences seem short, they’re appropriate under Canadian law,since both men have serious health problems.  Both men remain free on bail pending appeals.

The two men are still wanted in the U.S., where they’ve been charged with additional counts of fraud.

After the implosion of Livent in 1998, the company’s properties were purchased by SFX Entertainment, now operating as Live Nation.

Download audio file (EntertainmentLawUpdateEpisode3.mp3)

Download Episode (right click)

Approximate Running Time: 1:06

SHOW NOTES can be found at http://entertainmentlawupdate.com

In this episode:

Copyright Fees are increasing effective August 1, 2009

• http://www.copyright.gov/docs/fees.html

Pandora Web Radio reaches a settlement on music royalty rates.

• http://www.pastemagazine.com/articles/2009/07/pandora-agrees-to-new-royalty-plan-will-start-char.html
• http://www.hispanicbusiness.com/technology/2009/7/10/riaa_negotiates_rates_with_pandora_online.htm
• http://gizmodo.com/5309421/pandora-agreement-saves-internet-radio
• http://www.marketwatch.com/story/internet-radio-saved-at-a-small-cost?siteid=nwhpm

ASCAP wants to be paid when your phone rings

• http://www.eff.org/deeplinks/2009/06/ascap-wants-be-paid-
• http://feedproxy.google.com/~r/InPropriaPersona/~3/XzhJ0lIJCWM/

CASES

Jammie Thomas – Rassett loses file sharing suit brought by RIAA – $1.9 Million Verdict!
Capitol v. Thomas, No. 06-1497 (D. Minn., 2009)

• http://en.wikipedia.org/wiki/Capitol_v._Thomas
• http://www.wired.com/threatlevel/2009/06/riaa-jury-slaps-2-million-fine-on-jammie-thomas/
• http://news.cnet.com/8301-1023_3-10268199-93.html
• Comprehensive List of Links to Commentary
• Comprehensive List of Court Docs

JD Salinger prevents publication of new book
Salinger v. Colting, No. 09-50905 (S.D.N.Y. 2009) Order

• http://www.askbeforeyouact.org/blog/post/A-Sequel-to-Catcher-In-The-Rye.aspx
• http://www.askbeforeyouact.org/blog/post/Chapter-Two–No-Sequel-To-Catcher-In-The-Rye-In-The-US.aspx
• http://entertainmentagentblog.com/2009/06/30/catcher-and-the-lye/
• http://feedproxy.google.com/~r/wsj/law/feed/~3/Ei1C17yNSAk/
• http://www.1010wins.com/pages/4512245.php?contentType=4&contentId=4099583

YOUTUBE CASE OF THE MONTH

Google Class Action: No foreign plaintiffs without US Copyright registrations may be part of the class. (The Football Assn. Premier League v. YouTube)

• http://www.youtubeclassaction.com/
• http://www.youtubeclassaction.com/

TENENBAUM LITIGATION

(THE CIRCUS CONTINUES)

• Labels have made Motion for Summary Judgment re Tenenbaum;s fair use defense.
  • http://copyrightsandcampaigns.blogspot.com/2009/06/tenenbaum-court-dismisses-counterclaims.html
• Counterclaims re Abuse of Process – Dismissed, Motion to join RIAA – denied, Questions unconstitutionality of Statutory Damages – deferred
  • http://copyrightsandcampaigns.blogspot.com/2009/06/tenenbaum-court-dismisses-counterclaims.html

• Tenenbaum’s attorney in the crosshairs.
  • http://copyrightsandcampaigns.blogspot.com/2009/07/labels-reply-to-nesson-on-recordings.html
  • http://copyrightsandcampaigns.blogspot.com/2009/07/nesson-responds-to-osc-re-taping-claims.html
• Some other links about the Tenenbaum case: http://www.entmedialaw.com/?query=tenenbaum

FAIR USE CORNER

Does an Anti-Plagiarism Service Violate Students’ Copyrights when it maintains a database (i.e., copies) of student papers?

• http://www.theiplawblog.com/archives/-copyright-law-does-an-antiplagiarism-service-violate-students-copyrights.html

Supreme Court Denies Cert in Cablevision online DVR case.

NOVELTY CASE OF THE MONTH

Man sues over use of canned music in British production of a musical… and wins! (UK case)

• http://www.timesonline.co.uk/tol/comment/columnists/richard_morrison/article6661672.ece?openComment=true

Lindt Chocolate Bunny trademark dispute? (Belgium? Switzerland? EU?)

• http://jetl.wordpress.com/2009/06/15/lindt-defends-chocolate-bunny/

Yes, Lindt does have a US trademark registration for “Chocolate, chocolate products, namely, a chocolate bunny in a foil wrapper.”

Link to screen shot from pto http://www.jdsupra.com/post/documentViewer.aspx?fid=3d26257d-7d8d-46d3-bb2a-4189816626c3

The application was based upon a priority filing date from a foreign application. The US application was initially refused with the examining attorney claiming the proposed mark comprises a configuration of the goods that is not inherently distinctive and would not be perceived as a mark. The refusal was overcome by filing a distinctiveness claim (provision 2(f)) based on continuous use of over 5 years and a claim in an earlier filed US trademark application. The question remains, if the EU registration is cancelled, could the US registration be cancelled because of the priority claim relating to the EU registration, or would the US registration be amended to show a later date of first use?

Guest: Adrianos Facheti, Esq.

DEFAMATION

GUEST – Adrianos Fachetti, Internet Defamation Law Blog http://www.defamationlawblog.com/

• New Jersey Court rules Blogger is not a journalist and not subject to reporter’s privilege or shield law
  • http://lawprofessors.typepad.com/media_law_prof_blog/2009/07/new-jersey-judge-rules-blogger-cannot-claim-protection-of-shield-law.html
  • Where’s the line between journalist and citizen-on-a-soapbox?
  • Is a blogger a “media defendant”?
  • Does NY Times v. Sullivan elevated standard of “Actual Malice” apply?
• By Contrast, California courts have held that Bloggers ARE journalists:
  • http://www.mediabloggers.org/california-courts-rule-bloggers-are-journalists
  • Apple Barred From Obtaining Source Of Blog’s Article – O’Grady v. Superior Court – 139 Cal. App. 4th 1423, 2006 WL 1452685 (Cal. App. , 6th Dist., May 26, 2006)
• Sarah Palin resigns, attorney threatens media, bloggers, etc. (Adrianos’ Blog post commenting on state of journalism)
  • Would she have a claim? Public Figure? Couched as opinion? Reporting on the fact of rumors?

We’re definitely not in Kansas anymore!

A british theatregoer has prevailed in his lawsuit against a theatre that used recorded music in staging its production of “The Wizard of Oz”.

In a time of increasingly tight budgets, many theatre groups are opting for recorded musical accompaniment, in lieu of paying for an orchestra, conductor, and the additional audio requirements a large orchestra can impose on a production. The savings can be significant, but at what artistic cost? Critics complain that the ‘canned’ music or “tracks” as they’re sometimes called, drastically reduces the vibrancy of the performance given by the actors, singers and dancers on stage.

In England, the cost can be even greater. Adrian Bradbury sued the producers after attending a production of “The Wizard of Oz” that used tracks instead of live musicians.

Bradbury, who is the son of a clarinetist in the BBC orchestra, claimed that the billing of the show as a “Musical” violated the U.K’s “Trade Descriptions Act,” which bans false advertising. Bradbury’s claim centered on the idea if a person had bought tickets to a show billed as a “magical family musical” he or she would be entitled to expect live musicians. The Judge Agreed, awarding him a refund of the ticket price.

Here in the U.S. the licenses granted for most stage productions explicitly prohibit the use of recorded music, and require that the show be performed exactly as written, with all instrumental parts covered, etc.

It is, however, increasingly common for the publishers of musicals to offer ‘tracks’ (sometimes under trade names like “band in a box”) as an alternative. Renting the equipment and recordings to the producers in place of the musical scores.

Could american theatregoers bring similarly successful claims if disappointed at the lack of live musicians in the orchestra pit? It’s certainly possible. The United States’ Lanham Act, and many State Unfair Competition statutes prohibit deceptive advertising in a fashion similar to England’s Trade Descriptions Act.

The big question, then, is how to accurately advertise a “musical” that uses recorded tracks? Should the word “Musical” carry a footnote in all advertising?  In Bradbury’s case, one expert witness  stated that, without an orchestra or musical director, “a performance of The Wizard of Oz is best described as karaoke”.

INTRODUCTION

Raising the financing for any theatrical production is a challenge, even in the best of times. With the current economic climate (which I suspect will remaim the norm for some time), it’s even more difficult to convince investors to fund production of a stage production.

For every cloud, though, there is a silver lining. Many investors’ traditional notions of risk/reward have been turned topsy-turvy by the volatility historically “conservative” investments. So, clever producers may indeed be able to persuade financiers to put their money into projects they believe in from the heart.

FINANCING MODEL FOR L.A. PRODUCTIONS

I’m often asked by clients about the prevailing model for financing commercial theatre projects in L.A.’s small theatres of 99 seats or less.

Typically, the investors in a show contribute (as a group) the entire ‘going-in’ production budget, and in exchange receive 100% of the net profits from the production until their initial investment(s) have been repaid in full (called recoupment). From then on, until the closing of the production, the investors share in 50% of the show’s net profits.

So what, you ask, happens when the L.A. Producer later produces the same show off-Broadway or on Broadway in New York? Uusually, the investors’ contributions to the L.A. Production afre ‘rolled into’ the entity used to raise funds for the New York Production, with the L.A. production’s investors receiving a share of the New York production’s net profits equal to that proportion which their original investment bears to the funding raised for the New York Production and the L.A. production combined.

So, for example, if the L.A. production received $50,000 and the New York production is budgetted at $450,000, the New York production would be capitalized at $500,000, with the original investors receiving 10% of the total investors’ returns.

It is increasingly common for the authors of a new show to give the L.A. investors a small percentage (e.g., 2-5%) of the “subsidiary rights” in the show for a limited period of time following the original production. Thus, if the show is adapted as a film or TV show, or is published, or produced elsewhere, within, say 5 years after the original production, the initial investors would recieve 5% of the Authors’ earnings from those other exploitations of the material. Typically, the subsidiary rights participation is triggered only after the L.A. Production has reached some milestone of commercial success, such as running for a certain

DEAL STRUCTURES

The deal structures used for financing shows using the above-model don’t vary greatly from those used for larger scale projects. I always recommend that each production be structured as its own entity, either as a Limited Liability Company, Limited Partnership, or a Corporation.

Each of these entity types offers some benefit and some down-side, and no one type is ideal for every production. Consulting with an experienced theatrical entertainment attorney will help determine what’s most appropriate for the circumstances.

SECURITIES REGULATIONS

Unless the investors are on-board before formation of the entity, it will likely be necessary to comply with some securities regulations. If all investors reside in the same state, that state’s laws will control. If, however, investors are located in several jurisdictions, the U.S. Securities laws will apply.

Unless an exemption applies, this involves a complex, costly and time-consuming securities registration with the SEC.

Exemptions exist for small, limited, private offerings of shares/interests, provided that the opportunity is not advertised, and is kept limited to a small number of offerrees. (usually 35 non-accredited investors).

Even if the project is subject to one of the available exemptions from registration, it is important that the producer fully disclose all material information which might influence a prospective investor’s decision to participate. This document, the Private Placement Memorandum (sometimes called an offering circular), is a lengthy discussion of the project together with the financial structure, projections and risk factors.

The Private Placement Memorandum should be prepared by a lawyer experienced in entertainment financing. No two deals are the same, so it is unwise, even for a seasoned producer, to rely on forms, models or previous projects’ documentation.

CONCLUSION

It’s always been difficult to raise financing for commercial theatre projects in L.A., but the perceived riskiness of the current investment climate for ‘conservative’ investment might actually be a boon for producers who can infect investors with their passion for worthwhile projects. The help of an experienced entertainment lawyer is invaluable in navigating this exciting territory.

Elaine Stritch

John Lahr

When Elaine Stritch opened her Tony award winning “Elaine Stritch At Liberty” in 2000, she did so with help from theatre critic and author John Lahr, best known for his essays, reviews and reportage at The New Yorker magazine.   Lahr received a “reconstructed by” credit in the Playbill for Stritch’s show when it opened on Broadway after an initial run at the Public Theater.

According to the complaint filed in the Manhattan Supreme Court, Lahr is entitled to a royalty from each production of the show, including special engagements, but Ms. Stritch has allegedly failed to make payments in accordance with their agreement.

John Lahr is the son of actor Bert Lahr, who played the Cowardly Lion in the 1938 MGM motion picture, The Wizard of Oz

(Hat tip to Susan Grace’s Gracenotes blog)

What a show. Host Neil Patrick Harris was terrific, and the musical numbers were just right.