Radio College | Seminar Transcript: 01.27.04

Seminar Transcript featuring Ernie Sanchez

Steve Rowland: Let's welcome one of the most experienced legal minds in all of public communications, Mr. Ernie Sanchez -- we are lucky to have him.

Ernie Sanchez: Thank you. You are very gracious.

Steve Rowland: Ernie, could you start by giving us a brief outline of things that should be considered in planning a radio series? We'll get to specifics later.

Ernie Sanchez: Defining relationships is always the beginning...Ownership, control...responsibilities.

Steve Rowland: OK, who owns a publicly funded radio series? Let's assume it an independent production.

Ernie Sanchez: Normally, whoever has secured the funding has the right to claim ownership. Usually the funder does not have a preference.

Steve Rowland: Are there gray areas about who actually 'secured' the funds?

Ernie Sanchez: By securing the funds I am referring the party that has submitted the funding proposal. There is no reason there should be any ambiguity unless the proposer is not clear. You can of course make your own choices as to how ownership might be divided. Sometimes ownership can be divided by sharing of revenues or rights.

Jon: There are situations in which an individual links up with an entity (a station or 501c3 organization) to produce a series -- I suppose ownership, credit, responsibility, etc. resides with the sponsoring organization?

Ernie Sanchez: You are referring to a fiscal agent arrangement. If you have a fiscal agent you need to define what role they will have. Generally, they would handle administrative/financial functions without having ownership or creative control. Sometimes a failure to define those roles causes major problems. Those problems can include confusion about program ownership. It is essential that the producer take the initiative at every step to avoid such confusion.

Steve Rowland: Ernie, I think the producer needs to understand this, and take control, with legal help, do you agree?

Ernie Sanchez: Yes. Closing your eyes and hoping for the best will not work!

Steve Rowland: It is important because these things could become issues years later, isnt that right? Some producers may want to avoid confrontation -- the 'nice guy' syndrome -- have you advice?

Ernie Sanchez: You won't have to wait that long. In a matter of days there can be confusion as to who is in charge.

Steve Rowland: No, I meant that if you DON'T claim ownership now, you could be sorry later.

Ernie Sanchez: Yes, I agree, any issues not defined up front will be problem later.

Steve Rowland: Here is a question from a producer about this that was sent in earlier:

"At the end of section 1, you mention: "Everything is negotiable in the ownership area."

What approach do independent producers need to take when heading into negotiations?

Ernie Sanchez: calm, well informed, You need to be calm. Polite, well informed. It's worth saying twice.

(Steve Rowland: Folks who are sitting in, please feel free to privately send me comments or questions using the 'menu' feature at the bottom of the screen.)

Jon: So is the key to get a lawyer to write formal contracts for every relationship in a project -- between the producer and the entity s/he works with, between the entity and each person people who contributes to the project, etc.? Or are letters and emails and notes enough? (I'm Jon Miller, btw)

Steve Rowland: good question, Jon.

Ernie Sanchez: Most important -- you have to be business like. A formal contract is not the best way to start most discussions... I recommend "deal points" -- a summary of the main proposed points of understanding... If you can reach agreement on the "deal points" you can consider how best to memorialize the agreement. Small transactions can be done with a detailed e-mail or letter. A big project may need a detailed contract -- but only after agreement has been reached.

Steve Rowland: Let's take a look at a model program... A producer comes up with an idea -- puts a team together...gets a fiscal agent, gets a possible distributor, and finds several grants...then hires some freelance producers...and some other help...and then, makes an ancillary deal for a book and an audio tape for sale...where do we need contracts, where do we need memos?

Ernie Sanchez: You need to start with defining the fundamental issues... Who is working for whom, who is in charge, who has ownership of the elements that going into the production, I think defining the working relationship has to come first... If the working relationships are clear, you can move to compensation and ownership issues. Don't think for a minute that working with friends eliminates the need for clarity. Nothing will strain a relationship like misunderstanding and differing perceptions.

By the way, a contract does not have to mean a huge, dense document. It can be a single page -- or maybe even shorter -- if you are concise. The contract has to set out the understanding and the relevant terms. Anything else can be icing on the cake.

Steve Rowland: So, are we saying that after control is established that the person in control should make agreements clearly with each person... or entity?

Ernie Sanchez: Yes.

Steve Rowland: And then, do we need short contracts, or deal memos? What is the difference?

Ernie Sanchez: I always recommend going from the simple to the more complicated. Don't start with the complicated.

Steve Rowland: Folks, I think this is going great. I'm going to post a question and then the answer that was previously submitted -- give Ernie a short "finger break".

Steve Rowland: Here goes...

1) Q: I'm executive producing a documentary project that involves contracting reporters to travel to other countries. Buying insurance for travel (particularly to poor countries and countries with active conflicts) is very expensive; we didn't budget for it and we haven't done it. We have included a clause in our standard producer contract that absolves us of responsibility should the person be injured or suffer material losses. Is this enough? How can we protect ourselves against lawsuits and/or huge bills should something go wrong while a contractor is performing work for our project?

Ernie Sanchez: A: The simple answer is that there is probably no legal -- or ethical way -- to successfully shift all the risk of death or serous injury to a contract employee.

Ernie Sanchez: In addition, trying to dodge the risk of death or serious injury to your employee is likely to backfire if anything truly goes wrong. Even if you are able to get a naive -- or misinformed -- contractor to give you a full written waiver, the courts are unlikely to enforce such a waiver. Ultimately the court will probably invalidate any such waiver on any number of grounds.

Ernie Sanchez: These could include unfair bargaining power over the contract employee, lack of genuine understanding and consent by the contractor or even a lack of legal right for the contract employee to waive rights which arguably should rightfully belong to third person such as a spouse, child or heir. In addition, the contract employer may be held to be the party who is most sophisticated and therefore possibly held to a higher standard in interpreting the contract. In summary, courts generally and juries in particular are likely to strongly favor a contractor who had little or no bargaining power and who may have been facing a "take it or leave it situation." This could certainly open you up to the possibility of having to pay punitive damages for conduct which is shocking to the conscience.

Ernie Sanchez: So what should you do? I would start by checking whether State Workmans Compensation coverage is available in your jurisdiction for your contract employee who is traveling abroad. You also need to look into what kind of pre-existing insurance the prospective employee might already have and whether that insurance would have any validity in the country where the contract employee is going. Yet another possibility is seeking "calamity" insurance coverage with high deductibles. That way you have affordable coverage, in case the worst happens, but your liability to limited only to the deductible amount.

Ernie Sanchez: If you truly want to protect yourself against lawsuits or huge bills, you really have no choice but to confront the liability issues -- in advance -- in a fair and upfront manner. If you do not try and share those risks fairly with the contract employee, you may find yourself bearing all the risks by yourself.

Ernie Sanchez: I don't want to be unduly tough on the questioner. But I felt that he was asking if I have any good advice as to how to rob banks and get away with it.

Steve Rowland: yes, your answers are important and appropriate -- I think we all need to read them and let them sink in a bit would you mind switching to discuss music licenses?

Ernie Sanchez: Our format today is like "Jeopardy".

Steve Rowland: yes, it is a bit like "Jeopardy" (the TV quiz show) -- any thoughts on these issues?

Steve Rowland: let's move on then -- "music rights for $500, Alex"

Ernie Sanchez: Sure. Let's talk music.

Steve Rowland: How do shows like Fresh Air and TAL sell tapes with music on them? Some producers know that they can include music for broadcast pieces, because rights are covered by blanket licenses with ASCAP and BMI. Can you explain this? Then we'll go a little deeper.

Ernie Sanchez: All of public radio and TV is covered by a series of music licenses. These cover all music included in broadcast programs. In general the licenses are not designed to cover most non broadcast uses, with the exception of face to face instruction.

Steve Rowland: What is "face to face instruction"?

Ernie Sanchez: Class room teaching.

Steve Rowland: So how does that exception work?

Ernie Sanchez: When the so called "new copyright law" came into effect in 1976, Congress recognized that public broadcasting needed to deal the music issue. Up to that point public broadcasting did not pay for the use of copyrighted music. Congress created a mechanism that allowed for public broadcasting to use any music that it wanted. But with the understanding that payment would be required if voluntary negotiations were not successful -- the Copyright Royalty Tribunal would decide what was fair. We have operated under this mechanism now for over 25 years with CPB picking up the tab for most of the public broadcasting system including producers.

Steve Rowland: Is this system of CPB covering the payments working well, and/or, is it likely to change dramatically anytime soon?

Ernie Sanchez: The theory of having CPB pay is based on the notion that costs can be controlled better if the negotiations are centralized with CPB as one of the major players. In other words, if every station and producer had to make their own deal with the music copyright owners the costs would be higher both in admin costs and the license fees, too.

Steve Rowland: Am I correct in assuming that we can therefore use music selections pretty freely on pieces to be broadcast, but we have to make special arrangements if we want to sell tapes / CDs / digital downloads, etc?

Ernie Sanchez: I think it was worked pretty well. There is no guarantee CPB will pay forever. Yes, your understanding is essentially correct.

Steve Rowland: Glad to hear that. So how do shows like Fresh Air and TAL sell tapes that have pieces of recorded music?

Ernie Sanchez: I don't know the specifics of either show but... minimum uses of music in a talk show might fall under the current license. Clearly, a musical program with full songs would need to be specifically licensed.

Steve Rowland: By minimum use, do you mean an excerpt? If so, how long can it be, or how do you figure it out?

Ernie Sanchez: I'm speculating here,but a few seconds of copyrighted composition used as a musical bed might fall under the existing license, a full song would not.

Steve Rowland: Also, could a documentary then be considered "under the current license"? This is very important for independents to be clear about.

Ernie Sanchez: It would be necessary to check the license carefully... It would be dangerous to speculate.

Steve Rowland: How can that be done?

Ernie Sanchez: This might be a good project for AIR to undertake.

Dolores Brandon: Can you elaborate on that? How would AIR do that?

Ernie Sanchez: As a service to its members, AIR could look at the existing music license agreements and explain to its members how they work and what they cover, and what they don't cover.

Steve Rowland: We have some more pre-answered things about music rights -- I'll post them later -- in the meantime, let's switch gears again -- Dolores -- please ask our Jeopardy question, "Lawyers for $400"

Dolores Brandon: Ernie, do you think producers in general are somewhat fearful of retaining lawyers to help them with their planning? If so, are their misconceptions that fuel this reluctance?

Ernie Sanchez: Cost is certainly a factor, but getting in trouble can be even more expensive... Also this is a very specialized area -- not very many lawyers are well versed on some of these topics, it can be frustrating to pay for legal advice if it is not practical.

Steve Rowland: Let's welcome the new folks who have joined our discussion -- thanks for spending a snowy evening with us -- even if you are in California.

Rose: Hello there, and apologies for getting here late. I'm still a newbie in this independent life. So, one of the things I did was contact the San Francisco Bar Association. They hooked me up with a lawyer (who had been a documentary filmmaker in a previous life) and he was very useful. For a mere $25!

Roger: thanks, I'm just taking in the conversation!

Steve Rowland: If you have questions for Ernie, you can ask directly, or if we are in the middle of something, just send it to me privately using your 'menu' at the bottom - and I'll fit it in.

Steve Rowland: Nanette asked a good question Ernie. She wants to know is there any kind of journal that discusses communications law?

Ernie Sanchez: There are many specialized publications, most are designed for lawyers and many are expensive. Don't reinvent the wheel. Tap the expertise out there.

Steve Rowland: Ernie, we don't have a lot of time left...let's move on to some new topics -- I'll post your pre-answered things at the end -- I have a question for you about 'releases' -- but you may have other issues that would make sense to include in our remaining time.

Ernie Sanchez: Releases are fine as a topic.

Steve Rowland: A question came in from a producer this week who asked this... "Should I have a release for interviews that gives me complete control of the material in other uses --- and if so, what if people won't sign it. How flexible should I be?"

Ernie Sanchez: Standard media releases normally give the producer full power of editing, use and ownership. Buy money is usually paid to get that kind of release. If you're trying to get the release for free you may have to be very flexible. It pretty much comes down to an issue of how badly you need that specific material and is there any reasonable substitute.

Steve Rowland: Aren't there ethical issues in offering to pay for an interview? Even if you are asking for rights?

Ernie Sanchez: I would say there are a spectrum of potential ethical issues, depending on whether you are interviewing say a public official as opposed to a professional performer. Actually those may sometimes be one and the same.

Steve Rowland: Now you are talking!

Nannette Drake Oldenbourg: Is there still something like a one dollar contract that's significant?

Ernie Sanchez: Nannette... the one dollar reference is an old legal concept...

Nannette Drake Oldenbourg: Don't date me too badly here!

Ernie Sanchez: ...that for a contract to be legal there had to be an exchange of something valuable between the parties. Rather than argue as to whether mutual promises have "value" contracts would sometimes get around that by specifying that $1.00 had been paid.

Steve Rowland: Ernie, for the record, I'd like to share a bit of my experience with releases, and have you comment on it -- OK?

Ernie Sanchez: OK.

Steve Rowland: I use a pretty standard release for all of my interviews. It gives me full use, in perpetuity, for all media -- or something like that. In other words, very broad rights are assigned to me and I do not offer to pay. Most of the time, people sign it, but in some instances, they object. When they object, we talk about it then and there and I try to address any concerns they have and freely amend the release to their liking. Is this approach ok, or do you see problems with it Ernie?

Ernie Sanchez: It seems sensible to me...

Rose: Steve, would you mind making a copy of your release public so others of us could use it?

Steve Rowland: Rose, while Ernie is thinking, I think AIR should do that, I will speak with Dolores about it and we can use mine as a model.

Ernie Sanchez: I don't think that "one size fits all" when it comes to releases. I think your approach makes sense. One comment about legal documents as models...

Dolores Brandon: I have a book titled, Business and Legal Forms for Authors and Self-Publishers. It has 20 ready to use forms, a negotiation checklist, and tear out forms on a CD. It's published by Allworth Press. I used it to create a contract recently and then had Ernie look it over. It made things easy for both of us. It includes release forms.

Ernie Sanchez: Model documents are a starting point, not the end. But they can help educate you. That's the value.

Steve Rowland: The key is to be aware what each issue is really addressing on the release, and to be able to adapt it to work for both parties

Ernie Sanchez: Exactly.

Dolores: Right. The contract I put together was a starting point ONLY. Ernie, added important points that weren't included.

Steve Rowland: I think it is very important to work with people and allay their fears/concerns...

Ernie Sanchez: But all too often people think that there is some magic in a model, so they end up with a document that they do not understand and cannot explain to the other party. One more point: a model agreement is like a recipe, it may or may not be right for your specific need. Use it to get educated, but don't be afraid to tailor it to your specific needs.

Rose: How about another sticky issue: music? I am working on a project that I want to commission music for. What do I need to do to get release, etc. for music?

Steve Rowland: Just one second Rose...

Steve Rowland: this is all important Ernie -- it gives producers a method -- a way to take control... Producers need to know when they can be in control, and when to call an attorney -- but the theme tonight, for me has been about taking control, and responsibility yes, now to Rose, and we have another question from Kathy Gronau, then we will wrap things up.

Ernie Sanchez: if you are Commissioning music, you will probably want a "work for Hire" agreement with the composer. A good reference work is "This Business of Music (9th edition).

Steve Rowland: one simple thing, Rose...is to make a deal, pay the musicians a flat fee, and get the rights to use the music in your production and perhaps allow them to use it in other ways. Or not -- there are lots of things that need to be worked out... a good example of Ernie's maxim -- work it out first, keep it simple, then make a contract...right, Ernie?

Ernie Sanchez: Yes.

Steve Rowland: Kathy, your question please...

Steve Rowland: "Double Jeopardy" Ernie -- can you hear the background music?

Ernie Sanchez: Time for "double dollar questions"

Steve Rowland: Kathy has a question about music on the internet... She asks, is there a legal issue for musicians playing live music on the internet?

Geo Beach: Thanks very much for your expertise, Ernie! I'll look forward to reviewing the transcript, as I've been forced to "multi-task" while on deadline for Anchorage Daily News column.

Ernie Sanchez: There is an issue if the copyright on the music is not held by the performer.

Steve Rowland: I am going to post some questions that were previously asked -- that Ernie answered. They will be here to read, now or later. Ernie, this has been very good -- I think we have learned a lot -- I know I have -- balance between business/control/law and ethics -- just like real life!!!

Steve Rowland: Thanks Ernie, on top of being smart and handsome, you are a good typist!

Ernie Sanchez: Thanks for being a great M.C.

Matthew D. Payne: This has been really great, Ernie: Many Thanks!!!

Steve Rowland: Thanks to all of you who joined us -- and to those who will be reading this in the future...

Matthew D. Payne: And thanks to our host with the most, Mr. Steve Rowland!

Steve Rowland: Goodnight all...

Rose: This has been really great -- thanks.

Nannette Drake Oldenbourg: quick and thoughtful minds around here!

Dolores: Yes, Ernie, thanks a lot -- you're a gentleman and a scholar!

Steve Rowland: Questions coming... look out!

2) Q: My question concerns music rights for audio documentaries that are not for broadcast. I'm working on a promotional documentary about a non-profit organization. The documentary was commissioned by the organization and will be printed on CDs and distributed free at their fundraising events. It's possible the piece will also be posted on their website.

I'm wondering how are music rights different for such a project and, specifically, can I use a piece of music that is way over 50 years old (Vivaldi's "4 seasons") without obtaining rights?

My second question is about sampling, or rather, chopping up bits of music to fit our needs. I'm sure we all do this, say, loop a piece of music or make it end sooner to fit the quote. How are rights different for that?

I know these are basic questions but I seem to get all sorts of conflicting answers.

Ernie Sanchez: A: On the surface, your question seems pretty straightforward. After all according to my Groves Dictionary, Vivaldi wrote "The Four Seasons" in about 1725 and he died in about 1741.

Ernie Sanchez: Under current U.S. Copyright law, works published before 1923 are generally now in the public domain. But there are any number of complicated exceptions which generally make it necessary to check on a case by case basis.

Ernie Sanchez: Keep in mind, that while Vivaldis original composition may be in the public domain, the printed score you are using may have still be under current copyright. In addition, the sound recording you want to use, unless it is a pre 1971 recording, is almost certainly still under current copyright.

Ernie Sanchez: Music is just too importantand too complicated for you not to have a good standard reference work like William Krasilovksys "This Business of Music" (9th edition.). While the answer to your specific question may not be in the book, this reference will help you understand what issues are associated with your question and how to go about finding an answer. Also of great reference value is the U. S. Copyright Office web site which is part of the Library of Congress web site at www.loc.gov

Ernie Sanchez: Music sampling involves two basis legal questions. 1) Is the music (underlying composition and/or the sound recording under current copyright protection? 2) Can the sampled music be legally used without permission under the legal doctrine of "Fair Use". Contrary to what you might have heard, sorting out fair use issues is very complicated legally. Fair Use does NOT relate to a set number of musical notes, measures or number of seconds in length. While the Copyright law offers some vague guidance, there is no substitute for professional analysis. As a starting point you may want to check out what the references mentioned above have to say on this subject. In general, sampling without a license is extremely dangerous from a legal stand point.

3) Q: How do you establish who will have creative control over the content of a program? I have had a number of instances where I was producing a show and the client was all over me trying to control every aspect of the content.

One time I tried to spell out specifically in a contract that I would have creative control, but the client balked. We ended up putting in vague wording instead. Then, near the bitter-end of the project (after the show was 99% in-the-can), the client's board of directors started demanding changes of the "mention-the-funders-more-prominently" and "mention-us-more-prominently" sort. We finally settled things by having a third party of requisite clout come in and moderate. But it was a mess that I want to avoid in the future.

Ernie Sanchez: A: The hard reality is that creative control is generally determined by whoever has control of the financial and copyright aspects of a project. The specifics of how and by whom creative control is exercised generally should be detailed in a written agreement. If you have been brought in as a hired hand ("A Work for Hire Employee") you should not expect to have much ultimate decision making authority. On the other hand, if you are the project creator you may have much more bargaining power to get the kind of creative control you are seeking. In my opinion, it is always a mistake to avoid sorting out issues of creative control, responsibilities and ownership until later. I think the suggestions in my "Basic Legal Planning" paper represent a good place to start.

4) Q: If I'm going to be producing a piece or a show for an existing program (Studio 360, ATC, Soundprint, etc.), and I want to maintain rights to my intellectual property, and they don't want me to, what are my options? It seems like it's "their way or the highway" because it's there show, after all is said and done. If I want to control the rights, but they say "You fork-over all the rights or we won't hire you," I need the money so I am inclined to give them what they want. But is there some way that I can go into a negotiation with SOME kind of clout?

Ernie Sanchez: A: The problem you have described is similar to when you are offered a job which is not quite what you were looking for, but which nevertheless offers some possibilities. You have three basic choices: 1) You can turn it down flatly as not meeting your criteria. 2) You can negotiate to try and improve the specifics of your duties and compensation. (In your context, this can mean, for example, improved up front compensation, program rights sharing or retention, credits, or creative control. 3) You can accept the job on the employers termsbut not permanently. This means having to educate the employer over some period of time as to the value of your work as well as the fairness and rationality of your point of view. If the employer believes that the services you are providing have no unique dimensionyou are probably not going to get anywhere in improving your situation. If you can convince your employer that you are harder working, more creative or more essential than anyone elsethan you are on the way to improving your working conditions going forward. If you take a less than ideal job or projectnegotiate up front with your employer to set a date when your issues of concern can be revisited. While sooner may be better from your point of viewmake sure you allow enough time to demonstrate a convincing track record.

Roger: Thanks Steve... Dolores and Nanette -- keep warm !

Steve Rowland: thanks Roger -- you too -- goodnight all

Dolores: Good sports, all

Roger: 'nite ..

operations: are we ready to usher everyone gently to the 'exits'? time to close things down so we can get tonight's transcript processed. cheers, all.