Having a film at the Toronto International Film Festival can create opportunities that took years to reach and some decisions that may need to be made very quickly. For a first-time filmmaker, TIFF may be the first time you are dealing with distributors, sales agents, other producers, financiers, or other industry players who want to discuss your film or your next project.
The excitement is real, but so are the legal consequences. Here are ten practical legal considerations to keep in mind.
- Take Your Time with Contracts
Being presented with a contract can feel like an opportunity that needs to be accepted immediately. Usually, it does not.
Ask for time to review the agreement and understand what you are signing. Be cautious if someone insists that a significant agreement must be signed immediately or discourages you from obtaining legal advice. A deal that took years of work to create deserves more than a few minutes of review.
- Money Is Not Everything
The largest number on the first page is not necessarily the most important part of a deal.
A distribution, sales, or directing agreement can determine who controls your film, how long rights are granted, where the film can be exploited, what expenses can be deducted, whether you receive additional compensation, and what happens to the rights if the other party does little with them.
A slightly better upfront payment may not be worth giving up substantially better long-term rights.
- Understand Exactly What Rights You Are Giving Away
Pay close attention to the scope of any rights being granted. Are you granting Canadian rights or worldwide rights? Film rights only, or television, streaming and other media as well? Are remake, sequel, prequel, merchandising, or other derivative rights included?
Also consider how long the rights last and whether they eventually come back to you. Broad language such as “all rights, throughout the universe, in perpetuity” should not simply be treated as harmless boilerplate.
- Know Who Actually Owns Your Film
Before negotiating a sale or distribution deal, make sure you understand who legally owns the film and its underlying rights.
Copyright may be held by a production company rather than the filmmaker (producer or director) personally, and producers, financiers, writers, performers, composers, or other parties may have contractual rights that affect what can be sold. A distributor will typically expect the producer to demonstrate a clear chain of title before completing a significant acquisition.
- Be Careful with Exclusivity
Exclusivity can appear in more places than you might expect. A sales agent may want the exclusive right to sell your film. A producer may seek an exclusive relationship for your next project. A company interested in your film may ask for an exclusive negotiation period.
Before agreeing, understand exactly what you cannot do during that period, how long the restriction lasts, and how you can get out of the arrangement if nothing happens.
- Understand Distribution and Sales Agent Fees
If someone is selling or distributing your film, the headline percentage is only part of the financial equation.
The agreement may allow the distributor or sales agent to deduct marketing, travel, legal, festival, delivery, or other expenses before you receive revenue. Those expenses can significantly affect whether money ever flows back to the filmmaker.
Look carefully at fees, expense caps, approval rights, accounting obligations, reporting requirements, and audit rights.
- Protect Your Credit and Creative Connection to the Film
Your first feature can become an important calling card for your career. Make sure your agreement clearly addresses how you will be credited and, where appropriate, whether you have consultation or approval rights over matters such as edits, marketing materials, trailers, or other uses of the film.
Creative control will vary significantly from deal to deal, but it should be discussed rather than assumed.
- Be Careful What You Promise in the Market Room
Not every deal starts with a formal contract. Conversations at festivals can move quickly, and discussions may later be characterized differently by the people involved.
Avoid casually saying that someone “has the rights,” “has the film,” or has an exclusive deal unless that is what you actually intend. When discussions become serious, put the proposed terms in writing and make clear when negotiations remain subject to a formal agreement.
- Think Beyond This Film
Success at TIFF may generate interest not only in the film being screened but also in you as a filmmaker. That can lead to directing agreements, representation agreements, first-look arrangements, development deals, or offers involving your next project.
Those agreements may affect your career for years. Pay particular attention to exclusivity, options, future services, compensation, credit, termination rights, and restrictions on working with others.
- Know When to Call a Lawyer
Not every conversation at TIFF requires a lawyer. Once someone sends you a contract, term sheet, letter of intent, distribution proposal, sales agency agreement, or other document that could affect your rights, however, obtaining legal advice before signing can be invaluable.
The best time to identify a problematic provision is before the contract is signed. Once the deal is done, your negotiating leverage may be significantly reduced.
Enjoy the Festival – But Protect What You Created
For a first-time filmmaker, TIFF can represent years of work finally reaching an audience. It can also be the moment when decisions are made about who controls that work, who profits from it, and what opportunities come next.
Enjoy the meetings, screenings, parties, and unexpected conversations. Just remember that enthusiasm and careful deal-making are not mutually exclusive. Take your time, understand what you are giving up, and make sure the legal deal is as good for your career as the opportunity initially sounds.
Article by Michael Duboff of Duboff Edwards Schachter Law Corporation.
