Films to be produced under American Jobs Creation Act
HOLLYWOOD — Union Square Entertainment and CAA have entered into an agreement aimed at producing indie films eligible for federal tax incentives under the American Jobs Creation Act of 2004.
Under the deal, which is CAA’s first U.S. fund pact, percentery will provide advice to Union Square, aid in distribution negotiations and consult on development, production and distribution for the shingle.
Union Square is nonexclusive to CAA and the agency is not an equity investor under the deal. Details of CAA’s compensation were still being worked out but it will probably take some kind of backend participation.
Agency hopes that Union Square and its incentive-oriented model will help with studio slate deals, encourage other companies to adopt the same approach and eventually get more films made.
The American Jobs Creation Act gives tax breaks to films budgeted between $1 million and $15 million that are produced in the U.S. and meet certain spending requirements.
CAA is not the first major agency to pact with a film financing company. In 2003, the William Morris Agency joined forces with client Bob Yari to launch El Camino Pictures. Shingle produced last year’s John Travolta starrer “A Love Song for Bobby Long.”
Such arrangements were banned under the SAG master franchise agreement until 2002, when guild members rejected a revised agreement. The major agencies have operated without a SAG franchise since.
Agencies are forbidden from splitting profits with employers under California’s Talent Agency Act. The WMA-El Camino deal passed muster under the act because El Camino called itself a financing entity, not a production company.
Founded in early 2004 and headed by Jason Berk and Matt Lane, Beverly Hills-based Union Square specializes in mid-budget indie films and looks to bring new investors into the film industry.
Company develops projects internally as well as financing projects from outside producers. It expects to announce its inaugural production slate — a mix of international co-productions and U.S. productions — in the next four to six weeks.