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This program was recorded on March 28, 2019
“Pay or Play” is an entertainment industry contract clause requiring a producer to pay a person providing services if the producer decides to terminate such person without cause. In an industry based on creative vision, whether the results of services are “satisfactory” is completely subjective, and yet, a producer will not want to alienate a services provider whom the producer may still want to work with in the future; what is unsatisfactory to one producer may turn out to be a huge hit when produced by someone else. So “pay or play” clauses permit a producer to terminate further services by striking a balance between having to find a reason to terminate for cause when there really is none and paying a person who set aside time to perform services and may thus have missed out on other work opportunities. It’s a crucial clause in a business built on creativity. Yet many lawyers think that inserting a clause saying that compensation is “pay or play” is sufficient, not fully understanding the intricacies of the clause and how to properly draft a “pay or play” provision. If such intricacies are not carefully considered and drafted, the results can be far from what the parties intended.
Thomas D. Selz
Thomas D. Selz is a founding partner of Frankfurt Kurnit Klein & Selz focusing on all aspects of entertainment law. Mr. Selz’s practice includes advising on documentary film, fictional and fiction-based-on-fact feature films, television pilots, tv series and miniseries, live stage productions, publishing, music publishing and sound recording, and clearance work for problematic material to make the product acceptable to networks, publishers and Errors and Omissions insurance carriers. Mr. Selz also counsels clients on copyright (including termination and renewal rights under the 1976 and the 1909 Copyright Acts) and trademarks, from clearance searches to deciding which classes to file in, to registration, and the need for additional US Patent and Trademark Office filings.
1 General Credit
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- The background to “pay or play” agreements
- Why “pay or play” matters
- To what it applies
- How these clauses can be made enforceable as a practical matter