AFMA’s services assist ‘the little guys’

Org helps with contracts, supports production in the U.S.

The AFMA’s American Film Market is certainly the place to sell indie films to a wide range of foreign buyers. But although the organization started as a market, its continuing year-round activities have become just as important to indie producers and distributors.

When the association was formed 22 years ago, the overseas film business was something of a free-for-all.

Although producers such as Dino de Laurentiis had pioneered pre-sales and independent overseas distribution, there were no standard contracts and no way to enforce payment by foreign buyers. It may have been the lucrative heyday of the video business, but a million-dollar sale was worthless if the producer couldn’t enforce the contract in foreign courts.

“The initial services were related to bringing order to the industry,” says AFMA president and CEO Jean Prewitt. “The standard form contracts are considered to be the bible — before, everybody had their own version, so one of AFMA’s initial focuses was to come up with some standard terms and conditions.”

“AFMA puts power in the hands of the little guys — with all the independents together you have some kind of clout,” says ECG Worldwide’s Barbara Mudge. “The deal memos and long-form contracts are invaluable.”

Foreign contraction

With overseas video and theatrical sales on the downturn, Mudge finds AFMA’s new simplified television contract to be particularly useful for reaching the medium that makes up the bulk of the smaller distribs’ sales. The cost of hiring attorneys to draft contracts and file suits would be prohibitive for the smaller companies, she says. “I’ve had lawsuits in foreign countries before and it goes on for years and years.”

That’s where AFMA’s arbitration service becomes invaluable even to bigger players. AFMA arbitrator Gerald F. Phillips recalls an arbitration for Largo Entertainment where a Korean distributor would not complete payment on “City of Industry.”

“I was concerned whether the Korean court would confirm my decision, or favor its own national. If this case wasn’t confirmed in Korea, then it could make contracts meaningless between Korean buyers and their suppliers,” says Phillips.

Fortunately for the sellers, the Korean court agreed with Phillips’ decision and compelled the buyer to pay. Without an arbitration clause in the contract, it would have been nearly impossible to resolve the disagreement.

After spending the first 20 or so years concentrating on issues overseas, AFMA is turning its attention to helping support production in the U.S. “Our members are troubled by the high cost of shooting in the U.S.,” says Prewitt. “They ought to be able to stay home and shoot economically if they wish — it’s a way of giving members more choices.”

Backyard boon

Prewitt says legislators became interested in the idea of keeping production at home when the org explained how towns such as Bakersfield, Calif., had doubled their town budgets when “Erin Brockovich” and “Planet of the Apes” shot in the area, and AFMA is currently backing a production incentive bill in the Senate.

It may be a brutal time for independent producers, but AFMA’s range of services at least makes it more affordable and more efficient to do business. The collections service, for example, has put more than $20 million dollars in the pockets of member and nonmember companies, collecting royalties from performer and author societies all over the world.

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