Glitz, glamour and contracts

Media and entertainment law has always had a touch of glamour about it, conjuring up images of lazy days spent by the pool, helping the stars negotiate their multi-million pound contracts. If the reality is rather more prosaic, it is only slightly so. This is an industry expecting good times and a practice area that is fast expanding.

Today's media and entertainment lawyers need to be conversant in any number of areas – from multimedia technology to recording contract disputes, from advertising law to mergers and acquisitions. Many media lawyers work closely with their corporate finance colleagues. There is also lobbying work to do for trade associations.

Tony Ballard, head of communications and media at Allison & Humphreys, sums up the problem: “We never know what to call our department. It used to be simple – it was entertainment. Now we do everything from hiring artists to advising on space law. You have to have a lot of skills which just do not overlap.”

It is surely a sign of the times that football is now considered part of the entertainment industry. Media group Caspian's purchase of Leeds United Football Club is an illustration of the fact. Exciting times are ahead for the commercial development of football, and that will translate into good business for lawyers.

Football club flotations are catching on across Europe, with European Cup winners Juventus planning to list on the London Stock Exchange.

For Nigel Bennett, media partner at the Simkins Partnership, the exploitation of sports events is just beginning.

“Football clubs will become part of larger leisure complexes, like Newcastle football and rugby club,” he says. “And I believe that clubs like Manchester United will all have their own local pay-per-view television stations.

In the British film industry an injection of National Lottery cash and sector-wide restructuring are expected to produce something of a renaissance. The City is also regaining confidence in the industry after the disasters of the 1980s. Berwin Leighton media partner Andrew Somper says: “There is a lot of activity in film funding which simply was not there before.”

The National Lottery awards will be made through the Arts Council to fund consortia rather than individual films. As much as £39m will be available to each consortium over a six-year period.

Somper says it is a fun industry to be involved in. “Working for producers, a lawyer plays quite a different role and adds more value than in a normal legal relationship. You can be instrumental in bringing together the finance necessary for the film. That is satisfying.”

The television industry is a also a growth area for legal work. For example, the merger between Mentorn Films and Barraclough Carey Productions this month has fuelled talk of rationalisation and consolidation in the independent television sector. The industry is certainly crying out for it with as many as 1,500 production companies comprising the “cottage” television industry.

At the larger end of the industry there are some very well structured and capitalised companies, including the likes of United News and Media, Granada and Pearson, which have the potential to compete on the world stage. These companies have significant growth opportunities.

“UK companies should look more at expanding in Europe because there are some very interesting opportunities there,” says Somper. “South-east Asia and India are also popular.”

The “next big thing” in television is digital broadcasting, where cable will battle with satellite for market domination. Bennett says: “It is anybody's guess which will triumph. It took the video market 20 years to settle down.”

Ballard thinks terrestrial television appears to make more commercial sense. “You may get more channels via satellite but the terrestrial cost base is so much lower,” he says.

Some industry watchers thought the Broadcasting Act 1996 would produce a surge of activity in the sector. But those lawyers expecting a rush of mergers and acquisitions to take advantage of the loosening of cross-media restrictions under the Act have been disappointed with the lack of response.

Another growth area for some legal practices is fashion and character merchandising. Paul Mitchell, intellectual property partner at Taylor Joynson Garrett, says television companies are very keen to pick up literary rights, with the greater likelihood of commercial success and all the spin-off activities they entail.

The advertising industry also has potential. Acting for the advertising industry, in such matters as copyright, passing off, and defamation is a growing area of practice for many law firms. The industry is relatively under-lawyered and demand for legal services is set to rise with the increasing use of global advertising campaigns.

One of the most recent and untested legal areas of the media is entertainment multimedia, which covers educational and recreational electronic publishing. The electronic storage and delivery of multimedia can create headaches for creator, publisher and user, explains Alan Williams, multimedia partner at Denton Hall.

“If you are a creator you will be concerned that material can be copied perfectly 10,000 times at the touch of a button, whereas analogue copy deteriorates every time you copy it,” he explains.

“Publishers must contend with copyright, libel and obscenity issues. There are opportunities for manipulation and problems of authentication. Multimedia delivery systems do not respect borders and the law must come to grips with that.”

Craig Eadie, head of the media, communications and entertainment group at Frere Chol- meley Bischoff, thinks publishers in the interactive games sector should watch out. “They have been commissioning a lot of games and throwing money at them, so the price per game has rocketed. Developers have become very rich but not all the games will make money. There is bound to be a shakeout and some companies may get into serious trouble. A few games will make a fortune but an awful lot will not.”

Companies are dreaming up ways of bringing the Internet effortlessly to our doors. Probably the most ambitious plan is for a “super internet” of 200 satellites in the sky which can be accessed by the subscriber from anywhere in the world. Putting lots of satellites into orbit could lead to another profitable area of activity for lawyers – litigating over the damage done by space litter. No-go areas for satellites are already beginning to develop.

Lawyers operating in the music industry are keeping an eye on the latest moves to alter its legal structure. Polygram has a new agreement with copyright body MCPS under which it will do its music publishing accounting centrally in the UK without involving any overseas collection societies. Says Eadie: “That may not sound sexy but it is very important for the structure of the industry. The French have already retaliated by terminating their arrangements with MCPS. We will have to wait and see to find out if all the contracts are renegotiated.”

All in all, the future looks bright for the media and entertainment sector. As Somper says: “Lawyers can expect a rich harvest in this sector.”