HOLLYWOOD EYES MORALITY CLAUSES
Studios look to head off possible scandal in future
It was, the studio executives must have conceded, a costly mistake.
Kevin Spacey was lined up to star in the sixth and final season of House of Cards, Netflix’s blockbuster political drama. But when Anthony Rapp accused Spacey in October of making a frightening sexual advance toward him in 1986, when he was 14, Netflix knew it could not go ahead.
Netflix dropped Spacey from House of Cards and canned a forthcoming Gore Vidal film, shot for Netflix over the summer. Because he did not have a “morality clause” in his contract, however, Spacey was paid for both and the debacle reportedly cost Netflix $39 million.
Since Harvey Weinstein’s spectacular fall from grace in September, precipitated by allegations of rape — which he denies — from actress Rose McGowan and accusations of assault by many others, the floodgates have opened and numerous Hollywood studio executives and actors have suddenly found themselves out of work.
The financial damage inflicted on the industry is so great that many studios are now beginning to insist on “morality clauses” — contractual agreements that mean a person could be dismissed without pay for misbehaviour.
“If I’m a studio, I want the biggest, broadest morality clause I can get,” said Ed McPherson, founder of law firm McPherson Rane and a specialist in entertainment law.
“But as an artist, I’m worried — what infraction falls into this? It’s easy to say it applies in a Weinstein scenario. But some clauses mention the behaviour that would ‘shock, insult or offend the community or public morals.’ What does that mean?” Morality clauses are not new. They were first used in 1921, when the public backlash against Paramount after the arrest of Roscoe (Fatty) Arbuckle on rape and murder charges drove Universal Studios, one of Paramount’s competitors, to insert clauses insisting on good behaviour in their contracts. Any breach would permit Universal to terminate the agreement with five days’ notice.
Now, the turmoil in Hollywood has forced studios to consider insisting on such clauses for all their contracts. David Fink, a partner in Los Angeles law firm Kelley Drye and a specialist in media and entertainment law, said Hollywood executives were seeking to minimize financial risk in the current #MeToo climate.
Fox is one of many studios The Hollywood Reporter says is trying to insert broad morality clauses into its deals. The clause states that Fox can end any contract “if the talent engages in conduct that results in adverse publicity or notoriety or risks bringing the talent into public disrepute, contempt, scandal or ridicule.”
Paramount Studios is also reviewing its codes of conduct, the industry journal said, while several smaller distributors are looking into legal clauses that would enable them to pull out of a project if a key individual commits or is charged with an act considered under state or federal laws to be a felony, or crime of “moral turpitude.”
Their use divides opinion. Some see it as an insurance policy. Others believe it is too broad a brush. But Fink said the studios were wise to inset the clauses.
“Studios have an investment — they don’t want their project to be held hostage by somebody who did something wrong. Ultimately, anybody in Hollywood right now is wise to be paying a lot more attention to their conduct.”