February 1st, 2002: Contract disputes Pt. 2

February 1st, 2002

    Been going back and forth with Spectrum. I get a bad feeling about them. It started when the president, a woman named Yvette, told me there was no way she could give us 70 percent of the take. She said, and I’m closely paraphrasing here, “I’d go out of business if I gave that kind of percent. I've never heard of a percentage that high in all my years of business.

    I mention—not argumentative, mind you—that I’ve talked to quite a few people who all mention that it’s pretty standard. Yvette says I should find out who those companies are then, and sell it to them. She didn’t say it snidely or anything, and she qualified it by saying they’d really like to take the movie, they just couldn’t do that percentage.

    On the other points, she didn’t have a problem with my clause stating that if they haven’t given us 125 grand in three years, the contract is null and void.

    I asked her how many units she thought she’d move. She said they don’t talk in units any more(something I found strange, since her other rep told me they’d move 6000 units at Blockbuster alone). She said they talk in terms of gross dollars, and she thought HH would make between $275,000 and $450,000.

    She asked me how much our budget was and I told her eighty-five thousand. She said making that back shouldn’t be a problem.

    Now all this is great, but none of it’s in the contract. And one thing I’ve learned is that if it’s not in the contract, it’s not in the contract.

    One big sticking point is that she said they couldn’t budge from giving us only 25% of the take after recoupables on any DVD receipts under $24.94(which she claimed is “sell-thru”). I asked her why the cut was so much in her favor.

    She said they have to make some of their money back. I asked how that works, since they’re taking all the recoupables from my end. She laughed a little uncomfortably and said they still have out-of-pocket money they need to get back.

    Last but not least, they want a clause taken out that was put in by Saleman that says we need to get a copy of any deal they do and that Spectrum needs our approval on them.

    Now, the approval part is a little unreasonable, but they claim they want the whole clause taken out, because if they sell our film in a package deal, it would violate the privacy of the other films in the group.

    I tell her I’m gonna consult my lawyer. I call Saleman. He says it’s a load of crap. If they don’t tell us how much money they made us, the only way we’re gonna know is if we audit them. And, as Saleman pointed out, if we audit them, we’re gonna find out the terms anyway.

    So I mull it over. The whole package thing sounds like a bad idea to me anyway. Here’s why: Say Spectrum packages ten films(including HH) together and sells the rights to Germany for $100,000. Now, what if the percentage Spectrum is earning for the other nine films is more than HH? What’s to stop Spectrum from saying that $99,000 of those dollars are for the other nine films, and only $1,000 is for HH? In that way, Spectrum would gain more money and I’d be screwed out of the deal.

    I decide to put a clause in saying that there can be no package deals where HH is concerned unless the amount paid for the package is at least proportional to the number of films. I left in the clause about letting us know how much they get in each deal, because I don’t want to be forced into auditing them(which will cost me money).

    I mail the new contract back with a note to call me when they’ve reviewed it. A few days later Yvette calls me back and leaves a message that says she needs to talk to me about four points in the contract.

    I have no doubt about what they are. But I’ve made up my mind that if they insist on the 25%, I won’t sign with them. I’ll shop HH around a bit, since we’ve only sent out about ten screeners. I’ve also looked into self-distributing, which looks feasible if we can pool about $25,000. More on that later.

    I call Yvette back, but it’s Friday, and I think they all left early.

    Then we get hit with some good news for a change.

    Friday night I’m skimming the newsgroups and I see a notice about the winners of the DIY film festival. I’d asked Rick to send a copy of the movie in, but I didn’t know whether he did.

    I see a film called Ocean Park has won Best Film. I figure, Rick didn’t send HH in or also likely, he did and we just didn’t win.

    Imagine my surprise when I scroll down and see “Best Screenplay award goes to writer/director Kevin Kangas, who wrote the dark drama "Hunting Humans," a cold look into the mind of a serial killer that features a unique twist on the theme.”

    This is big. This is great. The first festival we enter, we win an award. The award is big for two reasons: First, it’s a hell of a boost for me right now, as I’m feeling drained and uninspired lately. There’s nothing like success to give you a boost of inspiration.

    Second, any award you can put on the video/DVD box is an incentive for someone to take home your movie, which is increased incentive for Blockbuster or Hollywood Video to put it in their stores.

    Tried to call Rick, but his phone’s off. Too bad, I’m dying to give him the news.