Dear Isaac,
We have considered your newest proposal, regarding the earmarking of the earned sub rights income from the authors for production funding only (as opposed to NYMF's administrative expenses), and while we appreciate your offer of accounting transparency with regard to your proposed use of such funds, I don't think this really addresses our fundamental problem.
Before we can get into the number crunching and start negotiating how much of an author's sub rights NYMF is entitled to, after how much of a "windfall," and from which sources of revenue, which territories, for how long, etc., and then start factoring in the administrative burden on the DG to monitor such a mechanism (and then to do likewise with similarly situated groups doing similar things around the country who will then be encouraged to ask for such a participation, too), the underlying issues implicit in this arrangement still need to be adequately addressed.
As we have already discussed with you at length, the preliminary question is this ... WHY should the author be giving up ANY portion of his/her sub rights to a presenting entity (a co-producer, at best, with no liability for the production itself, yet retaining control over venue, ticket prices, marketing, etc, while collecting significant fees and the lions share of the box office receipts), where either the author and/or the producing "ap- plicant" (who is often the author, as a self-producing entity) is paying substantial monies to produce the show, and especially when such troubling circumstances are exacerbated by the fact that the authors are guaran- teed no more than six performances and are not actually guaranteed a fee or royalty of any kind?Your answer, as I understand it, is because the festival is spending a great deal of money that benefits the author, and NYMF has no endowment, so additional funds are needed to reduce production costs for subsequent authors in the festival, if the festival is to survive at all.
Our response: NYMF was organized as a tax-exempt non-profit entity to raise and spend money for that very purpose, and if it has been unsuccessful in raising revenues to sustain itself, then that is an administrative issue for your organization to address. The answer to this problem, as we have seen in our analysis of other groups facing similar circumstances over the years, is not in taxing the very group you've been given charitable status to support and nurture, but in becoming a more effective fundraising entity. Non-profits do not sustain themselves on the grocery money of writers; all that such encumbrances accomplish is to make it harder for playwrights and songwriters to keep doing what they do, thus earning for such organizations the enmity of the community of writers, while generally failing to generate enough revenue to make all the ill will worthwhile. A much more effective strategy is found in aligning with writers so that when, upon the rare occasion a show evolves that becomes successful, the artists involved, and the community as a whole, are more likely to support, rally around and sustain the organization. This is how universities, for example, succeed in their fundraising activities; they don't just tax all their alumni.
And so we must reiterate our condemnation of your new direction in assessing a sub rights obligation from authors in your festival. If you wish to negotiate a participation with the "Applicant" producing entity, to the extent such an entity is a 3'<l party that has a license from the authors to produce the show in the festival, then that is between you and the Applicant, in terms of how you each share costs and profits as co-producers. Bear in mind, however, that the DG's model AEA Showcase contract recommends that, when a producer presents a DG member's work for no less than 16 paid public performances in a showcase (including an official press opening), for which author has received a royalty or other compensation, such a producer might obtain up to a 3%/2-year sub rights participation (which does NOT include participation in revenues from foreign territories). The fact that you are demanding 2% (after the first$20k) for 10 years from ALL territories, for guaranteeing no more than six performances in your festival and with no authorial royalty guaranteed at all, simply indicates the disproportionate compensation being sought by NYMF.
That being said, the lack of "proportionality", while disturbing, is not the central issue here; it's the demand for such a participation from the authors AT ALL, under these circumstances, that we find so troubling. Your proposal regarding the use of the funds, or any other continuing discussion to modify the sub rights clause, fails to address this fundamental problem
With regard to whatever agreement you may come to with the "Applicant" producing entity, it should impose no greater obligation on authors than the authors' deal with the applicant already provides, nor should it impose any obligation directly on the authors or their work when the authors are themselves funding (or raising funds for) their show's presentation in a contest or festival
Now, whether NYMF continues to insist on contract terms that violate this standard, or chooses, instead, to delete the authorial sub rights clause, please be assured that we will continue to advise our members accordingly.
Sincerely,
Ralph Sevush
Basic Authorial Rights Are Not Subsidiary Issues
September/October 2010
Former DG president Robert Anderson has often been quoted as saying: "you can make a killing in the theatre, but not a living." Whether or not the quote is apocryphal, the sentiment is genuine. And for too long the Guild seemed to operate to protect the ability of writers to make a killing, without sufficient attention paid to the problems of making a living.
For example, at some point along the way, non-profit theatres got into the "for-profit" business, and we all went along for the ride.
We, both as individual artists and as a Guild, accepted the underlying premise proffered by non-profit producing entities around the country that, in exchange for their productions, authors owed the company a share of authors' future revenues. Sure, we drew some lines about how much of a share the theatre should get, and for how long, and from which revenues, so the contract demands could be standardized, and abuses could be regulated. But we conceded the central point: that non-profit entities were entitled to similar benefits (in kind, if not quantity) to commercial producers.
Why? Perhaps the 5%/5 year subsidiary rights payable by authors to LORT companies seemed relatively insignificant at the time; perhaps it was out of gratitude to those theatres for still being willing and able to produce new plays; perhaps it was a worthwhile tradeoff for getting LORT theatres to agree to some overarching contract terms that would benefit playwrights overall. I am not in a position to second-guess the significant sacrifices and gains made by some of our most prominent playwrights, like Wendy Wasserstein, who helped fight the LORT initiative some 20 years ago.
But as a result of conceding that central point, we have been on a slippery slope downwards ever since, with non-profits demanding more and more, and authors conceding more and more, to the point where authors may have so encumbered their work prior to a commercial production that the work becomes either commercially unproducible or the authors are forced to reduce their own compensation to such an extent that the work might as well have stayed unproduced.
Certainly, if a NYC non-profit theatre produces the work, the 20%40% of the author's revenues some of them have come to require, along with the 5%-10% going to an initialing out-of-town developmental production (and/or Equity workshop or showcase production), as well as possible percentages to directors, plus the share owed to an underlying rights owner, and commissions to agents and attorneys, would leave little left to pay the author's bills, much less leave enough to interest a commercial producer.
But the tide is beginning to turn.
Prominent Guild members like Richard Nelson and Craig Lucas started drawing attention to the subsidiary rights issue, and the Center Theater Group in L.A. renounced participation in authorial subsidiary rights. Subsequently, the Guild has had conversations with the Roundabout Company and Public Theater, both in NYC, and as a result both companies have modified their policies. It has also been reported to us that both Steppenwolf (in Chicago) and Manhattan Theater Club (NYC) have taken some preliminary measures in this area as well, and many other theatres are re-examining their policies.
It was in this context that we began speaking with the New York Musical Theatre Festival ("NYMF"), a PRESENTING organization (not even a producer!), which changed its contract this year to take subsidiary rights from both the producing entity in their festival and directly from the author. After much sturm and some drang, they reluctantly agreed to remove the offending paragraph from its contract this year. However, they've maintained their subsidiary rights claim against the Applicant/ Producing entity (which, in many instances, is the author, as well), and threaten to revisit the issue again next year.
We reported on these developments during the summer via our e-newsletter, and now here for your review is the final exchange of correspondence I had with NYMF's Executive Director Isaac Robert Hurwitz.
From: Isaac Robert Hurwitz
Dear Ralph,
The mission of NYMF is to support theatre artists, not to argue with them. We therefore withdraw our request to share in the subsidiary rights of authors participating in the 2010 Festival and will remove that section (Paragraph 5(E)) from our contract. Given the challenges of moving new musicals from the page to the stage and on to further productions, NYMF wants first and foremost to ensure that the shows in the Festival have the unified support of the community.
It has never been NYMF's intent to financially burden our participating writers. We have worked earnestly and with transparency to bring dollars as well as necessary services to each Festival production. For the record, NYMF spends $28,500 in out-of-pocket production and marketing costs for the average show in the Festival - not counting administrative overhead, staff time, or in-kind donations. Counting those contributions, NYMF brings over $100,000 in value to each production.
While it's true that individual shows must also bring resources to the table, their costs at NYMF are only a fraction of what it would cost to produce the show elsewhere. And when writers need help raising money or putting together a team, NYMF matches them with producers and outside funding to help them get their shows up.
We are proud of the many talented artists with whom we have collaborated over the years, and the role we have played in helping more than 60 new musicals go on to further productions.
It is common knowledge that many theatre companies who mount the first production of a new show receive a percentage of the writers future subsidiary rights. That's fair. Like all not-for-profit theatre companies, NYMF must consider every potential revenue stream in our effort to ensure that artists will not be priced out of participating as well as the future existence of the Festival. It is important that we come to an agreement on this issue with the Dramatists Guild for next season.
In the meanwhile, we are optimistic about the shows planned for this year's Festival. I would like to extend an invitation to you and your colleagues to attend the Festival this fall and to witness firsthand the work we are doing on behalf of writers and other musical theatre artists.
Sincerely,
Isaac Robert Hurwitz
Most reputable theatre news organizations reported on the incident over the summer in a clear and evenhanded manner, including Playbill, Backstage, Variety, NY Times and the Chicago Sun-Times, but the Wall Street journal got it mostly wrong, despite an extensive interview I had with the reporter.
The following is my letter to that reporter, which further describes my ongoing issue with the position maintained by the NYMF:
To: Ellen Gamerman
I found your article misleading, in the following ways:
"New York Musical Theatre Festival has backed off its attempt to stake a greater financial claim to shows that go on to become hits elsewhere."
First of all, they haven't entirely backed off, as they are still claiming a share of the applicant/producer's future revenues (which, as you know, is often the author self-producing in the festival). And they claim they will be making this demand against the author again next year. Where are these facts in your article?
Also, their claims were against shows that earned the author over $20k over a 10-year period. That's $2k a year. How is that a financial claim only on "hits"?
"But a spokesman for the NYMF, Keith Sherman, said Mr. Brown's blog post "misrepresented all the facts" and ignored the event's goal of helping young writers get their work seen. Mr. Brown declined to comment further on the dispute"
Which facts were misrepresented, specifically, in Jason Robert Brown's blog? Did you even ask? Well, ask me. I'll tell you which: none, to my knowledge. And their goals aren't at issue. It's their means that have been called into question. The road to hell is paved with good intentions and the empty promises of the well-meaning.
"The NYMF's executive director, Isaac Robert Hurwitz said he tabled the idea of tapping into a show's future revenue stream after many emerging playwrights came under "intense pressure" from established writers urging them not to sign the contracts. "The last thing 1 wanted was for these writers who had already arranged to work with us to be in any way perceived in a negative light as a result," Mr. Hurwitz said."
Wow. Did you run with this without verification? The only one under intense pressure was Mr. Hurwitz, including pressure from nearly a dozen of his own advisory board members who were calling and emailing him on this issue and demanding to have their names removed from NYMF's literature. The Guild has not pressured anyone regarding their participation in the festival, and writers were free to do as they chose, and were so advised in writing. If there has been any "intense pressure" by writers against other writers, I'd like some details to back up that wild accusation, or at least a quote from a writer making that claim, rather than a self-serving statement by the NYMF executive director seeking to deflect attention from the real issue while making themselves the hero corning to the rescue of the embattled writer.
"Mr. Hurwitz noted that the event does more than simply present the musicals: It spends about $28,500 for the technical and marl1eting elements of each production. Staff, administrative overhead and other services, he added, can push the funding closer to $100,000 per show."
So he claims ... have you seen the numbers? And what do the participants in the festival spend, including their payments to NYMF? How does it compare? Where is that in your article?
"Next to Normal," which ran at the event in 2005 under the title "Feeling Electric," debuted on Broadway last year and is still running. According to Mr. Hurwitz, the festival could have made up to $80,000 from the musical after its first year on Broadway had it been able to share in the success."
You omit the fact that the show had to go through numerous other productions at non-profit theatres both prior to and after the NYMF production. So what value did NYMF add? One could reasonably infer the answer to be "none." And if they had successfully encumbered the work with additional expenses, it might not have reached Broadway at all. It certainly wouldn't have been the first show that was short-circuited on the way to potential success because it became overburdened with 3rd party participations that made it a less desirable property for commercial producers.
"I understand the reality of where (the festival organizers) are coming from. What they’re trying to do takes a lot of resources, and those are hard to come by right now."
Choosing to end with this sympathetic quote from a writer misleads your readers as to what the overwhelming response by writers has been to NYMF's actions. It also fails to address the actual "resources" NYMF is already getting, including Up to $8k in upfront fees (from the applicant, often the author)
The lions share of the box office receipts (from audiences); donations, grants, subsidies and underwriting (from individuals, institutions, corporations and city, state and federal governmental entities); and a state and federal tax exemption (subsidized by the American taxpayer, including authors); And they get all this for doing what they now want to tax the authors for doing. I wonder how Wall St Journal readers would feel if they thought this was just a new kind of tax? But, apparently, that's not a perspective you chose to share with your readership, despite my having shared it with you prior to your publication.
Sigh.
Well, at least Playbill Online and other reliable theatre outlets got the story straight.
Sincerely,
Ralph Sevush, Dramatists Guild
The poor journalism of the Wall Street Journal aside, the sense of righteous entitlement evidenced by the quotes attributed to Mr. Hurwitz is infuriating. But rest assured, the Guild will not back off; in fact, we will push this issue further and harder than we ever have before.
Because writers not only deserve to make a killing, they deserve to make a living.
Back in 60.
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