Business and Entertainment in The Golden State
Handshake agreements’ days are over in Hollywood, dealmakers say
By DONNA PARKER, The Hollywood Reporter, 1993–
LOS ANGELES — When the jury found in favor of Main Line Pictures on Wednesday in its breach of contract suit against actress Kim Basinger, Hollywood feared it may have lost one of its oldest traditions — the verbal agreement.
Reaction to the $8.92 million verdict resounded through the entertainment industry, with agents, reducers and lawyers anticipating changes in the way they make their deals.
“Let’s face it, for one thing, lawyers are going to start telling their clients, ‘Before you decide to walk off this movie, you better think it over,'” said one Hollywood attorney who preferred anonymity. “And from now on, it’s going to be the talent, not the studio lawyers, that want their deals on paper. You’re going to see a lot of actors, directors and writers signing more contracts. And this was a warning to all talent — you can’t walk off a picture with impunity.”
Though the amount of the award may have shocked the town, some agents said they are not surprised that someone finally put the handshake to the test in the courts.
“I’m not that surprised with the verdict,” said United Talent Agency Partner Jeremy Zimmer. “I don’t think anything the independent production company did caused the situation. I think the independent operated under the normal guidelines. If it were a studio the outcome would have been the same.”
Producer Howard Rosenman said the verdict may make it tougher for an independent producer to get meetings and make contact with bigger name stars.
“It’ll be harder for the independent to do business,” said Rosenman. “Actors will be leery and agents will be leery as well. It’s going to be only producers with big-time credibility who will be able to submit stuff and get meetings with actors and actresses. It’ll be harder for little producers to get to bigger actors.”
“The line ‘Hollywood is a town that’s based on the handshake,’ is a sweet phrase that no longer applies,” said Sean Daniel. “The way business is done — the way inquiries and meetings are handled between production companies, agencies and their clients is in for a review.
The verdict, Creative Artists Agency agent Rick Nicita said, is actually a double-edged sword.
“It’s murky,” he said. “On one hand it seems to uphold the concept of the oral agreement and on the other, it makes people scared as to what’s construed as an oral agreement. It’s going to inject more fear in an already cautious business.”
Said attorney Neville Johnson: “It goes to show that Sam Goldwyn was wrong when he said, ‘An oral contract isn’t worth the paper it’s written on.’ And that with competent counsel, a jury can understand the machinations of the entertainment industry and will enforce a handshake agreement where needed.”
One top agent who requested anonymity said the effect the verdict has on the business will go deeper than its effect on the acquisition of talent ot put together a deal.
“This is really going to disrupt the ability to make pre-sales on independent films,” said the agent. “With an independent producer why would you ever want to attach an actor or an actress to make presages and then get burned because it takes months to actually close the deal? From now on, we’ll have to include an ‘out’ clause in contracts.”
Linda Lichter, a partner in the entertainment law firm Lichter, Grossman & Nichols agreed. “The independent business has always been dependent on the goodwill of the actors,” said Lichter. “It may create a climate of suspicion, which isn’t positive for the independents, and it may contribute to what is already a brutal negotiation and legal process between talent and the studios. That would be a shame.”
Said one Hollywood dealmaker: “If Basinger backed out of an oral agreement she should pay. People just don’t usually take actors to task. When Woody Harrelson walked away from MGM’s ‘Benny & Joon’ to do Paramount’s ‘Indecent Proposal,” MGM sued and there was an undisclosed settlement. Sinde this was an independent production, she probably figured she would get away with walking out. She didn’t.”
Zimmer added he isn’t surprised at the reaction of the Hollywood community to the verdict. “It’s a business that operates on verbal agreements,” he said. “We all have learned to live together that way.” — Donna Parker