Table of Contents

This issue of LawGram features news, topics and information on hot issues in film, television and music from our Attorneys regularly practicing in the entertainment law arena.

As you may know, the Writers Guild of America (WGA) recently settled their long standing strike. Also, on May 27, 2008, the American Television & Radio Union (AFTRA) settled their labor issues and have signed an agreement with the Producers (AMPTP). This leaves the Screen Actors Guild (SAG) who will either return to the negotiation table to settle their labor issues or, potentially call for a strike. Are we headed for an actor's strike that will affect the film industry?

Following are few issues and some information that affect everyone in the film and television industry. If we can help you in any regard, do not hesitate to contact us. If you have any entertainment related or other topics, subjects or issues you want addressed or for us to talk about, please send them to us. We look forward to your feedback, providing service for you, and sending you our next newsletter.

NEW STATE INCENTIVES FOR FILM AND TELEVISION

When will the states stop trying to out do each other to get your business? A majority of the states provide state tax credits, refunds and other incentives for film production in their states. New Mexico has led the field for a long time with a 25% rebate incentive on all qualified expenses paid in the state. New Mexico studies have shown that the return on its investment spent on rebates paid shows a return of 10 to 1, that is $10 of revenue for every dollar paid in state rebates goes to businesses in New Mexico which produces other revenue to that state. Quite impressive! Over the last few months, several states have passed legislation to become major players in the film production incentives business. Wisconsin has a 25% refundable state tax credit. A Wisconsin based theatre chain will consider booking films meeting their standards, which is tantamount to a guaranteed distribution opportunity www.filmwisconsin.net. Any Wisconsin tax credit given to the production company which is not used, will be refunded in cash to the production company. Typically, a production company would owe little or no tax to Wisconsin, which can be very beneficial to investors.

STATUS OF FEDERAL INCENTIVES UNDER SECTION 181 OF THE AMERICAN JOBS CREATION ACT, 2004

Section 181 permits deductions for qualified production expenses up to $15 Million (or potentially $20 Million) in the year paid rather than potentially amortizing those amounts over several years. The benefits under Section 181 sunset and terminate, unless extended, at the end of 2008. There are currently pending U.S. Senate and House Bills to extend and amend Section 181 and increase certain benefits to the taxpayer. For example: Senate Bill (SB) 2375 and House Bill (H.R.) 6049, which have been read into record and referred to committee.

ACTOR STRIKE NEWS

The Screen Actors Guild (SAG) and American Federation of Television and Radio Artists (AFTRA) contracts expire at the end of June, 2008. SAG covers film and AFTRA covers television and radio. Many actors are a member of both SAG and AFTRA. Since AFTRA and SAG do not necessarily see eye-to-eye on the same issues, each is negotiating separately with AMPTP (Alliance of Motion Picture and Television Producers). SAG has already stated and authorized that if there is a strike, all actors under SAG can still work on independent films that are 100% independently financed. This means that, if there is a strike, actors will have a choice to act in and get paid for those independent films that are independently financed, or not work at all until the strike is over, an independent filmmaker and/or producer may have greater access to actors. As a result, this could be a big benefit for independent films which are independently financed.

MUSICIANS - TREAT YOUR BAND LIKE A BUSINESS

From the 5th Beatle to Sting and the Police, the oftentimes tumultuous relationship between band mates lead to emotional and costly breakups. The media picks up on the break ups and, depending on the notoriety of a band, inside fighting and conflicts between bands can be great fodder for tabloids. Embarrassing exploitations on Inside Edition aside, a band member leaving a band can have a long standing and sometimes devastating effect on an artist's career and future in the music business.