LEGALLY SPEAKING, IT DEPENDS: Movie Turnaround

Christopher Schiller is a NY transactional entertainment attorney who counts many independent filmmakers and writers among his diverse client base. Follow Chris on Twitter @chrisschiller.

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It's not that line from the Bonnie Tyler early eighties pop song Total Eclipse from the Heart (But now you've got it as an ear worm too, huh. I've had it ever since I chose the topic.)

It's not the thing you scream at the screen when watching those stupid college kids who find themselves in a cheesy horror movie. (How'd they ever make the grades to make it into college is what I wonder.)

It's not the series of images of a character animators sketch to know how their creations will look from all sides.

In the film world the mention of a project in turnaround sends shivers down the spines of anyone within earshot. It is a death nell for the hopes of filmmakers and the threat of it sends nightmares into the dreams of producers and studio execs alike.

Although the examples are many and varied in their nature and makeup, in general turnaround can be defined as a currently halted movie production that has incurred a substantial but potentially recoverable debt for the holders of the rights to the production. The original owners do not want to move forward anymore but are not willing to fully write off their losses especially if another party could show interest in taking over the project from them.

It's not just a dead project. There's still the potential of life with a reinvigoration if the right party has the gumption and a workable plan. That hope for a resurrecting future is what keeps the project in its holding pattern sometimes indefinitely. It is the attachment of the previous spend to the restart of the failed project that creates the “turnaround” conditions.

There are key elements that make up a project in turnaround. These elements that affect or are influenced by the property rights holder are:

1) Significant pre-production or actual production has stopped for reasons
2) “recoverable” debt has been incurred
3) The rights to the project are securely and tightly held by the rights owners
4) The owners are disinterested in going forward any more themselves

Each of these elements must be overcome or adequately addressed by any potential new producer before they can take over the project.

The reason the production stopped must be considered. No one spends money to make a film without a good idea of how they plan on finishing it. When trouble arose it was likely unexpected and may still be an obstacle to anyone else's moving forward. Was the adaptation of the source property into a film script found to be impossible to film? Has the subject matter garnered baggage that made it unpalatable to an audience? War or tragedy tends to do that. Has the right time to make a film on this subject already passed?

The production of the film Casablanca was rushed into production before the script was finished and the cast the producers initially wanted were available because the filmmakers wanted to take advantage of the recent Allied liberation of Casablanca while the event was still newsworthy and in the minds of the public. Their fear was that the window of interest in a fluff of a film set in an obscure foreign town based on an unproduced stage play would quickly wane. With the war winding down and Casablanca's moment in the news spotlight waning it was acutely possible that the film's production would have gone into turnaround if it took too long to get to the theaters.

If a new producer can determine whatever obstacle stymied the first attempt is either no longer an obstacle or they've figured a way around it, then they face the next hurdle.

The problem of raising money for a producer seeking to remount a project in turnaround is larger than those of a regular production. You have to pay to get the property out from under the current owner's control. The price tag is more than the cost of buying the original property. The previous producers spent a lot of money themselves before they shut down production and if there is an opportunity for them to recoup that outlay they're going to try. Here's where it can get sticky. A clean and clear accounting of the previous money spent is needed to know just which debts are legitimate to the current value of the production and which, if any, were wholly external, frivolous or even the cause of the production's need to shut down in the first place (was it really necessary to spend money on that?) This is usually a walking on egg shells across a tight-rope proposition to navigate in order to reach a point where the original producers do not feel their original investments were in vain or are being cheated, but, also does not burden the new producers with too much debt to recover mounting a new production.

In justifying the cost calculus of both the funds already expended and the new purchase cost's limits many factors need to be considered. It is likely the original acquisition costs were calculated as fair value for the property by the original investors. The additional development costs are on top of that. How much of these costs are for transferable assets that the new company can take over and utilize in their new production (scripts, sets, costumes, etc.) and how much, though legitimate when made, are of no current benefit to the new producers (salaries, rentals, etc.?) The final fair price tag to move forward could grow too big for anyone to swallow.

Even if a mutually agreeable price can be found there are other considerations that must be handled before a new producer can take over. Namely, how will a new try will impact the original producers?Reputation is a large part of this business. It is not overstating things that ego is a factor in all producing. If you are unable to pull off the production you imagined your ego takes a hit. If someone else can succeed where you could not your ego takes another. If you are still in control of the property how inclined would you be to step aside and potentially suffer that blow? A new producer has to approach the old with respect for the efforts expended and propose a plan that doesn't devalue that try if they are ever to have a shot at getting the rights they need to try.

And which rights are acquired are big determinants in the followup production's chance of success. The source rights may not be transferable to a new producer unless those rights were assignable in the contracts. Then the new owner would have to return to the original rights owners and renegotiate for the right to get to the same point the first producers got, likely costing time and money just to get back to square one.

Paying a bit more for the rights to the previous scripts as well as the initial property might be the key to taking a new approach to make a successful film. Without them you'd have to start from scratch and be careful not to tread the promising path previously chosen by those earlier writers or risk copyright infringement of scripts that can't be used for anything else.

The writer's lot in a project in turnaround isn't an easy one. They may not have any ownership rights or interests but their fates are still tied to the production that falls into that hole. Scripts take time to write and without an end result to show for it, it is difficult to maintain a “working writer” mystique if there are gaps in your production history. Even if you retain a right to use the scripts you write for personal purposes (teaching examples, writing samples, even publishing it in a book form) how useful is it to show around town a writing sample from a film that didn't get made? Whether you show your work or not there's always the question of why the film didn't get made. Was it because of the writing? It is easier to distance yourself from a bad film that gets made where, if you're lucky, the WGA arbitration will show how little you had to do with the final result. An unfinished film is always a question. Better to be a traditional “blacklist” script that is brilliant but thought to be unproducable (until someone tries, then they may indeed go into turnaround if they fail.)

There are a few viable but difficult to negotiate ways of attempting to avoid falling completely down the turnaround rabbit hole. If you are an initial rights owner you can attempt to place a rights reversion clause in your contract. That is a provision that stipulates if after a significant period of time there is no progress being made towards a finished film, the rights acquired revert back to the original owner. It's a touchy negotiation point to finesse, but, if honestly set it won't interfere with an active, vibrant production. If the span of time is long enough for all honest efforts to be exhausted in the usual manner then the initial owner (who likely has a keener vested interest in seeing the final work become a film) can take over. These clauses can stipulate which costs, if any, can be recovered by the producers if a new mounting takes place. Setting the top end of what they can hope to recover can help both in evaluating a struggling production early (if they've already spent too much) or give a quick stoppage and quick access to turnaround if the cap is approaching and no resolution of the problems are in sight.

It may seem a daunting challenge to take a film out of turnaround and successfully make a viable film. But there are times and circumstances that might make the efforts and costs worth it.

Times may have changed since the last try. Audiences tastes change so a project that was sour before might find an audience hungry for it now. Genres go in and out of favor. Technologies change. What could have been too expensive to mount properly before might be cheaper and better with current tech.

The availability of fresh faces might make a difference. A change in cast or principals might have a world of difference in getting the funding, etc. needed to remount a production.

And fresh blood behind the wheel may do the trick. Let's face it, not every producer can produce every film. Sometimes the fit just doesn't work. It might take a different mindset, someone willing to consider options that would never occur to the original team. And if that new team has a dogged determination to succeed it just might work.

Turning around a film is damn hard. It can be done. But it's not easy. With planning, attention to detail and a little luck, a great film can rise from the ashes like a phoenix. Like the song says, every now and then...turnaround. But, as always... it depends.

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