Exclusivity. Who doesn’t want exclusivity? Would you rather fly in the “exclusive” first class cabin, or do you actually prefer squeezing in to a coach seat near the bathroom?
Adult film studios are the same way. Most adult film producers, given the option, would prefer to present actors who appear exclusively in their films. If fans are enthralled by a particular performer, they are more likely to subscribe to a website that provides exclusive access to their favorite actor. Meanwhile, if an actor appears on every other porn website, he or she isn’t exactly a rare commodity—and thus content featuring that actor is diminished in value.
Studios sign talent to exclusivity deals for the cachet of having “exclusive talent,” and more often, they do so out of a desire to take advantage of a simple economic principle—the law of supply and demand. If the studio controls the supply of an actor’s performances, then the studio can charge more for content with that actor in it.
Exclusivity may be a tool with which to manipulate the law of supply and demand, but when a studio or an actor enters into an exclusive talent contract, they are not only dealing with the law of supply and demand but also complicated principles of contract, employment and entertainment law.
If a studio has a properly written exclusivity contract, it can prohibit its talent from working for other studios, and gain a distinct economic advantage over the competition. Further, a properly drafted exclusivity contract can be used against other studios that poach exclusive talent. However, the key term is “properly written.” In my career as an adult entertainment attorney, I have seen far more poorly written and unenforceable exclusivity contracts than I have seen effective and properly drafted agreements. In fact, most exclusive talent contracts in the business today are likely unenforceable.
So what makes a properly drafted exclusivity contract? For starters, we have to remember that an exclusivity contract limits an actor’s ability to work—and thus, courts will mandate that the contract be limited in time and scope. A contract that says that an actor may never work for another studio would not be limited enough in time. A contract that prohibits an actor from engaging in any other work at all for a year will be too broad in scope.
In order to be enforceable, an exclusivity agreement should only restrain an actor from working for other studios for a limited period of time. How limited? That depends on the consideration that the studio provides to the actor. If a contract provides for a one-time payment of $500, then the exclusivity clause will likely not be valid if it is for longer than a few weeks. However, if the studio doubles or triples the actor’s scene fee in exchange for exclusivity, that would tend to cut in the studio’s favor.
Another issue to consider is which state’s law governs the contract. These agreements, for the most part, are creatures of state law, and state law varies widely.
For example, a non-compete agreement is presumptively valid (at least in terms of its duration) in Florida if it lasts for less than six months. On the other hand, there is a presumption against its validity if it is longer than two years. Furthermore, a Florida exclusivity contract must protect legitimate business interests, and it must be reasonably necessary to protect those business interests.
While Florida is a generally pro-business state that provides only limited protection for workers, other states will have more complicated requirements. Most notably, California considers most contracts that limit a person’s ability to work to be presumptively invalid. An exclusivity contract drafted under any other state’s law is most likely going to be unenforceable in California.
Given California’s status as the epicenter of the entertainment industry, the California legislature has drafted a set of statutes that govern exclusive talent contracts. While their operation could be a treatise unto itself, the short version is this: If you want to lock talent down to an exclusive contract in California, then the law requires that you pay the actor a certain guaranteed sum per year, and that sum increases each year thereafter. The amount is not that high, and a studio must only guarantee an actor $9,000 for the first year of exclusivity. However, the number is high enough that most adult entertainment studios are unlikely to try and lock down each and every actor without giving serious thought to how much value exclusivity brings.
As is usually the case, this article is designed to give the reader a general overview of the legal issues herein. If you are a performer or a studio seeking more education on exclusive talent agreements, you are encouraged to consult with an attorney who is experienced in adult entertainment matters.
Marc J. Randazza has a practice that primarily focuses on the areas of First Amendment litigation, adult entertainment, trademark and copyright litigation, and domain name arbitration disputes. He serves as general counsel to Corbin Fisher and has represented many other adult companies, including Kink.com and Reality Kings.
