Disputes do not need escalation Guest: Alper Koç

IE: Hello and welcome back to another episode of We Can Find A Way, a podcast about conflict resolution. My name is Idil Elveris. This is a podcast that pioneers a culture change in handling conflict because conflict is everywhere. It is also the only bilingual podcast that addresses conflict on an international scale. We Can Find A Way is sponsored by Koc Attorneys at Law, the Istanbul and Antalya based boutique law firm. In this episode that I'm releasing on the centenary of the Republic of Turkey, I'm talking to Alpar Koc from the law firm. He will tell us the approach taken to conflicts in the entertainment media business with businesses or with talents, including the Disney series about Ataturk released also today. Alper and I spoke on 19th October, and you can find a short CV of him at the end of this episode.

So Alper, can you please talk about disputes that you see in entertainment media sector?

AK: What constitutes a bigger chunk are the license disputes, the copyright disputes, and the disputes that spin off from the license and copyright disputes. What you understand as this entertainment media, on the very basic notion is made of two distinctly different transactions: business to business transactions, where you would see Netflix doing business with, local producers, or Amazon doing business with broadcasters. But at the same time, you would have network broadcaster, daytime TV, making contracts with script writers, directors, actors, and other creative people, which in the general scheme of things are called in the industry “talent” or business to talent transaction, that you would have one party is a business and the other party is an individual. What happens is that in business to business transactions, you would have big corporations signing contracts with each other, and then they assigning work to each other. Netflix saying to the local producers, I need that type of movie, this type of TV series, and show me what you got at your disposal, and I want to hear your thoughts and the scripts that you have acquired the rights to. And we will decide which ones we will be transposing to a fully fleshed out movie.

And in the process of doing so, the producer and the studio enter into this agreement where they list all the financial details of what they are trying to achieve. It's like a construction work, it's an undertaking work. When you produce something, the contract is, what will you be delivering to me; for what budget will you be delivering it to me for; and for what time? So there are three components: quality, time, and budget. And to the extent you are able to deliver all three, as expected, then you are a trustable business partner. And your disputes and your contractual breaches here and there will likely be tolerated. And because you are the repeat player, you're a trustable advisor, and people will want to be doing business with you for the next show, for the next TV movie, for the next documentary series. Trustable partners are a handful. Maybe this is the assumption, but you will see repeat players in the media business. And this is not only in Turkey and Middle East where I am working. It is pretty much the same all around the international media sphere. You would have the same dynamics blowing out in Hollywood, Los Angeles, and you would have the same dynamics materializing in Mumbai, in Bollywood as well.

IE: Then, they don't really bother to resolve the dispute through formal mechanisms, I would say, if they see each other as reliable partners, at least in the business to business side of the matter. So why would they go to a court? I wouldn't.

AK: But you exactly got my point. Business to business transactions, you don't see as much court action because people do have an understanding that those contractual breaches are, can be mendable or tolerable or can be approachedalternatively. Because media production is a business of unknown, you don't know what you will be building from day one. There will be deviations from the original script, there will be deviations from the original cast, definitely deviations from the original budget, and some things will pop up and you'll have to adopt and cross that bridge when you get there. So that definitely breeds contractual breaches. And I'm not saying that because I'm proud of it. It just happens. But of course, what matters is that it is something that is manageable. It is something that is worth watching. It is something that is within the tolerable budget and it is something within the tolerable time frame. You want to deliver the summer blockbuster, you better deliver it in the summertime.

IE: Time is of the essence when it comes to that?

AK: Always. But again, you are dealing with this unknown, and people are prepared for the unknown, and so are the media lawyers and the entertainment lawyers. We are also prepared for the unknown. We are prepared for the 11th hour. That comes with the package and everybody understands that. But if you are a notorious contractual breacher, not only this budget, but also the next show, and also the next TV series, and you are known for it, and then you get to be known as this difficult business partner who maybe you don't want to work with the next project. That is not a court process, that is not an arbitration process. But market players take their position as to pick and choose who they will not be working with for the next show.

IE: So one of them actually produces in one of those businesses, the other provides for that production a platform so that that production doesn't go in vain, but is shared or reaches wider audiences. But as you are saying, they are repetitive players that continue their business for a very long time. It's not just like a retail sector. You have new entrants every year. There is like a limited number and limited roles in this sector, if I understand it correctly.

AK: You are absolutely right. Much as I would love to see new players coming into spotlight every now and then, it is always tough penetrate into a market of trusted players, repeat players. It is the essence of the economic nature of the media business as a whole. People invest their money into something that has the biggest chance of return on their investment. And if you want to have the biggest chance of your return on investment, you have to go with the smallest risk. And that comes with a trusted partner. Again, at least this is how the market players behave and how we as media lawyers adapt to those situations. And whenever it is a dispute between those trusted partners, Netflix sometimes turns a blind eye to its producers’ shortcomings and the producers sometimes turn a blind eye to their subcontractors’shortcomings. And then it goes on. I keep bringing Netflix but just it is so imaginable for people. This is why, I'm putting their name. But Netflix is just one. Apple TV, NBC, Middle East Broadcasting Corporation.

IE: You name it.

AK: But you're also right in terms of this is mostly a transaction of buy and sell. The one who produces, sells and the one who gives a platform, buys. And be it a license acquisition agreement for the ownership of the copyright, I am comfortable in defining it buy and sell terms. Media entertainment is a creative industry and you have to work with creative people who we refer to as “creatives” because they're the ones who create those great shows, those great stories. And we are just boring lawyers, attaching ourselves to these spectacular people and just hoping to get some of that spotlight. The name definitely defines what they do. They are the talent, the word talent captures not only the actors; not only scriptwriters; not only the writers; but also non-scripted showrunners like yourself or me as a guest and contributing to your content. And the ones who perform, the ones who improvise, the ones who adopt and redefine and put their unique creative contribution to something that was not there before. And that is a great thing. And then that is the essence of why we are in this business. Because we rely on these people to create those wonderful stories we are so much eager to watch and so much eager to read, so much eager to consume. And understandable so. Any dispute that involves personally them directly has different dynamics and unfolds differently. As a media lawyer, if I have a dispute involving for example, you and your copyright, because “we can find a way” a brand is your copyright. You have contributors that are coming and making their own contributions and probably you will be signing other deals, copyright deals with other broadcasters and platform providers.

But at the very essence of what is going on is that you are creating something that was not present without your involvement. You would be reacting not so tolerantly if you were going against a corporation or going against a third party who you think plagiarized a portion of your copyrighted material or in the entirety of your copyrighted material. And as a media lawyer but, I wouldn't be expecting you to act like a robot and I wouldn't be expecting you to act like a corporation. I would understand that you would be passionately going after your copyright. So this is, I think, what draws the line between a business to business media dispute and a business to talent media dispute. Emotions are high, passions are high. And I'm not saying that in a negative way saying that emotional equals to illogical. I'm saying that, emotion as in you own that and you definitely show how much you own that thing and you passionately defend your position. This is something we are less exposing ourselves to under disputes between producers and broadcasters. But when it comes to script writers; when it comes to actors; when it comes to performers; when it comes to directors;musicians it is always an element of passion. And it's a passion of you being this human being which we should, as lawyers on the other side of the fence approach you as such. And that means doing our best not to escalate the matters to a legal matter and then try to understand what your entitlements perceived entitlements are. Maybe we can find a solution to it. Maybe we misunderstood each other. But, the problem is this Idil: People like to see new stories, but as much as they like to see new stories and fresh stories, we also want to see the same stories retold. We always want to see this new version of the Peter Pan story. We always want to see this new version of this Aladdin story. So we always want to see this new version of this rich guy falling in love with poor girl story. And we are in this new phase of the streaming where everybody produces ten times more than what they used to produce ten years ago, 20 years ago.

IE: The volume creates disputes, but at the same time the difference in the business there is this element of personality or personal involvement that creates difference because you have just said in a business to business dispute it's almost like clash of interest that can be negotiated-rehandled. But when it comes to human beings, it's relationships, it's value differences, personal emotional involvement that is less seen in a corporation

AK: Exactly

IE: Which is why you try to de escalate and work on the relationship almost like a mediation. I mean, the role of the lawyers sounds like a mediation process to me. You don't have a conflict resolution role, but you're handling things differently.

AK: You're absolutely right. It comes from the very fact that we are dealing with very creative people. We are dealing with people who we pay to think outside the box, to be a little bit outside the norms and go above and beyond and then come up two days later with something so beautiful that we'll be crying watching. We want different people to be involved in this and we want our creatives to be not repeating our everyday lives, but to be telling us different stories. So you expect that person to have this different mindset. This is why we are hiring them. And of course, they will come back and act differently, act unusually and act, not in a corporate bubble when their interests are infringed or they perceive their interests to be infringed. So creative people have their own ups and downs. And we as a support staff, because I see myself as a support staff, I'm just trying to make things not fall apart. But of course, the real contributors, the real makers of things are those very creative people that we are relying so much on. So I wouldn't be surprised if they did not come back with a normal corporate response, with a legal demand that I think in the first sight would be unusual, unheard of. But, it is, again those people that we wanted to be different and they are being different, which is okay. As a lawyer, I always see myself in this backseat role and then trying to work out those disputes without offending the creative person and without killing their motivation to go to the jungle and bring out new stories for the next run. They have to be motivated. They have to be rewarded. And as dispute handlers, we don't want to kill that.

IE: So what is your conflict strategy to handle disputes that arise in the sector? Because as far as I can tell, it needs a different approach when it comes to business to business than the creators that you so much cherish.

AK: I tell my staff and I, tell the production teams also, “don't escalate the matters to us” to lawyers, because it's the easiest thing when something escalates in the contract negotiations, the actor wants this much, they want that much. We are ready to give this much. Or the script writer believes their script has been altered so many times, it is now outside their contractual obligation to give us a new script. Usually, the production teams, when they know their stuff, they try to sit and handle themselves. But sometimes when they are so tired, so fed up, or maybe they are not very experienced in this and they escalate the matters to us, and they use the word, “you'll be talking to my lawyers”, which is not a good thing. Don't do that. We're the last resort, not the first resort. And then whenever you escalate it to us, no matter how friendly and how funny I want to be, I try to be just… I am a lawyer. And then that title is scary. And then it is difficult to de-escalate from that point. So my first reaction is making sure that production teams or studio teams escalate the matters to us as a very last resort and not as a first step. I would say the first preemptive measure that we are always trying to employ is drafting good contracts and making sure the production teams and creative teams understand the value of that. And I'm not saying that because I'm a lawyer and I'm trying to, boost the deal. I really can see that when you give the much needed time to contract negotiations and much needed time to both parties understanding what is it that they are getting into as an actor; how many days of that week you need to show up to the set; how many hours you need to be present in the set; what are the flexibilities that the production teams will want from you; maybe we will be changing the shooting dates from October to November, and we want you to be ready to that last minute thing. We want to pay you this much but if it happens that we don't shoot ten episodes, but also cut it down to nine episodes because the studio wants us to provide nine episodes as a maximum, then we will be paying you not this much, but that much. So that is fleshing out the possible scenarios, fleshing out our sensitivities at our end and your sensitivities at your end, and then let us digest and give it a couple of days if it's needed, a couple of weeks if it's needed, and then sign the agreement. And we will be knowing what we will be facing afterwards. And trust me, if we do that, definitely if we gave enough time to the contract, those bad case scenarios that we thought about, that will come and that will be already formulated as a provision in the agreement. And then we will already have discussed that. The point stands:The more digested agreements we come up with and the more pushback that we are able to give to talent and their agents, those agents, they want that agreement to be signed so fast too. And production team, they want it to be signed so fast because they have a timing commitment and their timing commitment dictates that, okay, in two days, we will be signing with the actors. And in two weeks, we will be doing all the shooting. And in two weeks, we'll be wrapping it up. And then come October, you will be having our show on TV. So that there's a time pressure. And as lawyers, if we yield to that time pressure, ah, we give them a bad contract and we give them potential disputes.

IE: And lastly, what makes this area of your business different than other sectors?

AK: It is, of course, the glitter and all the, spotlights. What is unique about entertainment is celebrities and a spotlight. So that is number one. But number two is it is an industry made up of I'll go back to the same case, repeat players and then that repeat players committing to long term relationships with each other. Actually, they are committing to one off relationships. So I will be doing you this show, Transformers Twelve, as a blockbuster. It is a one off agreement that we will be having. But, if you are going with Transformers Twelve, the twelve installment of the Transformers franchise with the studio, you have an understanding that if it goes well, there will be Transformers 13, 14, 15 on the line, which is a one off transaction. But it comes with the implication that we want to do a long term business with you because we need trusted partners. At the end of the day, it becomes this industry with big investments floating around that is handled by a number of repeat players that have this long term trust relationship among them and they tolerate and absorb those one time disputes. Something went wrong in Transformers Twelve. We are hoping you will be fixing it in Transformers 13 with the hope, with the understanding that those disputes will be handled by the next installment. And the biggest sanction that normally players impose on each other is not this I will be taking you to court, I will be taking to Arbitral Panel, I will be taking you this or there. This is a very simple statement that, you know what, I won't be working with you anymore. And trust me, this is huge. Receiving that statement, it has huge implications. People get that message. This is why in business to business transactions, we are always trying to go with the preventative measures of drafting good and also making sure that entertainment players understand that the end game is having a long term relationship and not as a one off cheat code. And then you run away and not do business again.

IE: So how do you see its development then?

AK: I think we are getting to a point Idil where we are producing bigger and bigger shows with higher volumes. Like we did Ataturk this year and was in the tune of $15 million. And then it is the biggest ever made in Turkey. I don't know about the Middle East. In the Middle East as well. So last year, NBC had this show that invested $40 million in a total of one season. These are not still Hollywood budgets but it's getting there. Which means there will be a point where the disputes will no longer be able to be tolerated by good intentions, friendly manners and long term business understandings. It will get to a point where you definitely will want to have a lawyer and you will probably want to try your chances on the court because the volume is big and you don't want to miss that. If you cannot afford to leave it to Transformers 13 or Transformers 14 you have to deal with right here, right now, because your investors are pushing you to.

IE: So if I may ask, how was this dispute handled? The ataturk one?

AK: I can only say that, everybody did their best to make this show happen and everybody put in so much work to make it happen. And then just the sheer volume of the labor, passion and love going into this. As a lawyer, you just stand in respect. Anything that has this much labor going in, I think deserves to meet its audience. So that's what I will say. Other than that disputes do arise and the disputes do get handled and this one was not that much different from any other. Well, what I'm saying dispute is that there was no legal dispute on the ground floor but just a roadmap as to how we will be handling the decisions that are taken by the global decision makers and how we will be applying it to the national level in Turkey.

IE: Thank you very much. Is there anything you would like to add?

AK: Well, no. Well, thank you very much. I mean, not everyone wants to talk to me about media law and I'm very honored that you found what I do interesting and thank you very much Idil. I really appreciate your work and I really am a big follower of, what you do. I think that is great. We really need this not only in media, but on all sectors. Anyone who is actively involved as you are making their contributions as dispute resolution makers, I think deserves to have, more than a podcast. I really hope to see you on screen one day as a documentarist.

IE: Thank you. Hopefully it will happen. Thank you for your continuing support of this podcast. Coach has been advising clients on a vast spectrum of Turkish corporate law matters for over 15 years. His practice focuses on mergers and acquisitions. He also specializes in corporate governance matters and advises his clients on daily governance issues. He has represented his clients in various disputes before court and international arbitral tribunals. He is one of the go to arbitration practitioners in Turkey.

I hope you enjoyed this episode. I thank my sponsors, Koc Attorneys at Law, who are staunch believers of using dialogue and finding common ground to resolve conflicts. They support this podcast in the hope that it will help advance the much needed discussion on deescalation and reduction of polarization in conflict situations within the legal practice as well as in the public discourse. Please follow the podcast, its website, like it and share it. You can also write a review. Also, please like the excerpts I share in my YouTube channel or in the Instagram account of we can find a way. I would like to close by thanking my marketing manager Julia Nelson and musician, Imre Hadi and artist Zeren Goktan who allow me to use their music and photograph in the podcast. Thank you and hope to meet you in the next episode.