P&C Podcast: The Evolving Entertainment Landscape with Guest Tony Mulrain

Intro (00:00):
You're listening to the Alliant Insurance podcast, dedicated to insurance and risk management solutions and trends shaping the market today.

Joe Charles (00:09):
Welcome to the Alliant podcast. I'm Joe Charles, Senior Vice President of Alliant Insurance, and I lead the Sports and Entertainment vertical. I'm delighted to have Tony Mulrain as our guest. I need to start with who's Tony and how did you get here?

Tony Mulrain (00:25):
Thank you, glad to be here. So, as you know, I was born and raised in Bronx, New York. I went to high school at Mount Saint Michaels and a number of people that have had success at Mount were classmates. And I thought that the entertainment industry is something that would've been easy. As it turns out it was not. It took me a while. It took me eight years or so to get into the industry and I kind of got in through two avenues. I was doing litigation for a major studio and that opportunity came about because a law school classmate of mine became head of litigation for one of the networks. And in the course of doing litigation for the network and other networks, I had a paralegal working for me, whose name is Zenay. Long story short, Zenay asked me to do a favor for her sister. I didn't know who her sister was; she just asked me to do a favor and if you know something about me, if I can do something to help you, I will. So, I did a favor for her sister and her sister insisted that she speak with me directly, in order to thank me, and that's completely unnecessary. So, she calls her sister on speaker from my office and I hear the voice and the voice feels like a voice I've heard a thousand times. And when we got off the phone, I said to Zenay, "Do I know your sister?" And she said, "I don't think so." And I said, "Well, her voice sounds really familiar." I said, "Well what does your sister do for a living?" And she said, "She's in show business." And I said, "Anything in particular?" And she said, "Yeah, she's on this show that you probably never watch. It's this little show called The Martin Show." And I'm like, "Your sister is Pam from the Martin Show, Tichina Arnold?" And she said, "Yeah, it is." Well, she was sizing me up because she wanted me to become Tichina's lawyer.

And while I viewed it as a great opportunity for me, the first thing Tichina wanted me to do was a stage production agreement, which I had no idea how to do. Tichina sent the fax. Yeah, it was long enough ago that they actually sent faxes. She sent the fax, and it was a stage production agreement. I called Tichina and I said, "Hey, you misdirected this to me, give me your entertainment lawyer's phone number and I'll send it on to her or him." And she said, "You are my entertainment lawyer." And so, I'm in the office for a couple of nights reading every book that I can read on how to do a stage production agreement. I did a pretty decent job. She was sufficiently pleased that she introduced me to a lot of people in the entertainment industry that ended up becoming clients. And next thing I knew I had a pretty good roster of actor clients.

Joe Charles (03:14):
Wow. Did you have a hard time transitioning into those fields? How were you able to transition?

Tony Mulrain (03:20):
Sports was very different. I had been in the entertainment industry for a number of years. I'd moved out to California in order to get more entrenched, and then I made a decision to move to Atlanta. And when I moved, I thought it would be a good idea to diversify my practice to include sports. And this is particularly the case, because unlike a lot of lawyers at boutique law firms, I've always been on a large general practice platform, which has facilitated my ability to do more than just entertainment and now sports transactions for clients. I'm able to provide by way of example, and not that it's necessarily my practice area, but I have partners who can provide asset protection, trust and estates work. So, I was able to provide those services. I can recall having a client that made an investment in a hotel. So, we had a hospitality group and a real estate group and a corporate practice group that could support those endeavors. And so, what I ended up becoming was outside general counsel to a number of my clients in the entertainment space. And I said, "Hey, I can adopt this very same model out of Atlanta as it relates to professional athletes." And when I expressed to some of my clients in the entertainment space that I wanted to also get involved in sports, they made sure that that happened. So that's how I got into the sports industry.

Joe Charles (04:40):
Wow. Well, I've known you for close to 20 years and I've seen you accomplish so many things. One of those accomplishments is you’re named a "super lawyer." Can you talk to that a little bit?

Tony Mulrain (04:53):
There's a number of ranking services that really evaluate lawyers. "Super lawyers" is a designation that, as I understand it, is afforded to 1% of lawyers in America. I was fortunate enough to receive a super lawyers designation for both sports and entertainment last year. I'm flattered because it really speaks to what my peers think of me. So, when you're opposite somebody on a deal, you get a feel for their legal skill, how zealous they are in representing their clients, how pragmatic they are. I feel very blessed to have been acknowledged by my peers as a good lawyer.

Joe Charles (05:32):
That is a tremendous accomplishment. So let's say an artist or an actor is just getting into the business. What would you advise them to do in terms of protection and making sure that they are successful, putting them on the right track?

Tony Mulrain (05:51):
Let go with an actor. I think it's important for an actor to have a really good agent and a really good manager. And the reason for that is because you want to chart a course as an actor. An agent's job is to find you a bunch of opportunities to make money as an actor. And the manager's job is to provide you with advice and counsel on which of those roles you should take. I think if you see yourself in a certain place in the market, that has to be a lot of your thought process in terms of what roles you audition for, what roles you accept and otherwise. Now of course there's the pragmatism; we've all heard the term starving actor. So, if you're a starving actor, then you may not have as many opportunities to make those calls. Every business that's successful moves forward with some level of a strategic plan.

And when you're an actor, it's no different. You're a business, you're in business, and you've got to take roles that are consistent with where you want to be in the market. Whether we're talking about appeal to a certain demographic, whether we're talking about, "Hey, I view myself as being a comedic actor, so my focus will be on comedy.” Or “No, I view myself as a dramatic actor. No, actually I think I can do both and sit at the intersection of both and therefore be afforded opportunities within both of those lanes." There's got to be a lot of thought as it relates to that. So, I would say that is something that must be focused on. In terms of an actor, when you get in the room, be prepared. When you go into any room, be prepared so that even if you don't earn the role, what you do get is the acknowledgement of preparedness and professionalism.

So, you definitely want those things. This is a craft; you have to constantly work your craft. The rules of networking apply. They apply to everything that you do in life, and acting is not excluded. Get to know casting directors, get to know studio executives, network with your colleagues. Every person that you engage with that's an actor is not necessarily your competition. They might be a source of information for something that perhaps is right for you, but not necessarily right for them. So, I would say, certainly those things. And then having a good team, having a smart agent that is having lunch or dinner with studio executives on a regular basis. A lot of times roles in Hollywood are gone before people start to audition. The auditions sometimes are a formality. You have to understand that. And so, the networking and the relationship piece is critical.

Joe Charles (08:35):
Love it. So, I'm an insurance professional as you know. I'm always looking at things from a risk management standpoint. Walking down the streets in New York, I'm thinking if someone's doing some scaffolding work, if the scaffold falls down, what type of insurance? Do they have the right insurance? Back to what you do. Do you recommend any insurance products for some of the actors, some of the athletes, for the Hollywood studios? What's your concept there?

Tony Mulrain (09:04):
Well, first of all, I call Joe Charles. No, the answer is of course, if I'm representing a production, you know, Joe, I often call you. It's not just what kind insurance, but what's the appropriate amount of insurance, given the risk. And I really defer to professionals like yourself on the issue of insurance. I mean there's liability insurance, sometimes I have clients that are asked to be on advisory boards. So, there's that kind of insurance, there's disability insurance; what happens if this professional athlete gets injured and can't play anymore? Is that something that we can insure against? But I will tell you that one of the things that you learn very early in your legal career is this notion of indemnity. And it simply means this: I represent and warrant that certain things are the case. By way of example, I represent and warrant that intellectual property, an idea that I'm bringing to a production, is unique to me. It's my own. And it doesn't infringe on anybody else's intellectual property. I make that representation. Appropriately, the studio comes across the table and says, but what if you're not telling me the truth as it relates to that representation. And now I, the studio or production company, gets sued for trademark infringement, copyright infringement or what have you. What happens, is the studio saying you have to defend, indemnify and hold me harmless. What does that mean? It means that if there's a lawsuit, you've got to defend me, you've got to engage counsel. So, you've got to defend me, you've got to hold me harmless, and you have to indemnify me if there's a judgment you have to pay. So, when I'm looking at an agreement, I'm looking across the table at someone and I'm saying, well this sounds great that you have that contractual obligation to indemnify my client, but do you have the financial wherewithal to meet that obligation?

And if you don't, the best way for me to get there is to say, you have to have this insurance or you have to have that insurance. At the same time, when I'm representing a client and I know my client has that obligation indemnify, I'm looking at my client and I'm saying, do you have the financial wherewith? And, by the way, even if you do, do you want to pay this out of your pocket? Or should we call Mr. Charles at Alliant and have a conversation about what the appropriate insurance is, what that premium looks like? And that's probably a better way to skin the cat. So, I'm constantly advising clients about risk management and insurance and things of that nature.

Joe Charles (11:50):
This is great. One of the things I was thinking about, I know you work with studios. What are some of the trends you're seeing in Hollywood studios and film studios?

Tony Mulrain (11:59):
Yeah, if you notice a lot of the movies that are released now are franchise films, Marvel films and things of that nature. That's really what's going into the theaters. I think a lot of that has to do with the rise of the streaming platforms. I think that COVID put a lot of wind in the streaming platform sales because people couldn't go to the movies. And so, they found a different way to distribute content. And so now I think there's less motion pictures that are being distributed in your traditional movie theaters. And that's a trend that I expect to continue. I expect it to be mostly franchise films that are released in theaters.

Joe Charles (12:49):
Interesting. I just want to pick your brain on a few more things. What's your perspective on the future of sports and entertainment? Emerging trends, technology or shifts that might shape the industries?

Tony Mulrain (13:03):
One of the things clearly, name, image, and likeness, is one of the most talked about things in the sports industry. You have companies like Overtime Elite that stepped into that space at a time where athletes were struggling to be able to leverage and monetize their name, image, and likeness. And you have a company like Overtime come forward and say, "Hey, you can become a professional and we will help you to leverage your name, image and likeness." And so, now you have an alternative to playing college athletics, by example. So we're a lot more focus on helping athletes to monetize their name, image and likeness. I think you see a lot of that. On the entertainment side, we've got a writer strike that I'm certainly hoping doesn't go on for too long. You've had COVID, which really impacted the ability of actors to be on set.

There were a number of productions that started and stopped because COVID was running rampant through various casts and so productions had to be shut down. I think there was a decided shift towards animation, which doesn't require as much; animation is mostly done by computer. When you have voiceovers, which can be done individually, I think that is a downside protective measure. I think you'll see studios looking at those things. I'm hoping that this is the only pandemic of the COVID nature of my lifetime, but there's no assurances of that. So, I think studios are vigilant about having that downside protection in place. So, I see those trends.

Joe Charles (14:51):
You just pointed out a bunch of things. I never even thought about the animation and the voiceovers, makes total sense. So, a lot of those folks who were working on the animation side of the business, it worked out for them; it was very fruitful for them. And then the voiceover actors and actresses, they probably got a lot of opportunities there.

Tony Mulrain (15:14):
Absolutely. The other thing that I'll mention is that podcasts are playing a major role in the entertainment industry right now. And a lot of people don't really understand how the model works, but the podcast model really follows in many regards the traditional linear television model. You have studios and you have networks, right? So, what does a studio do? A studio acquires and produces content. So, let's say we're talking about a television sitcom. A television sitcom may cost $2 million to produce a 30-minute episode. The studio is going underwrite those costs. So, if you think in terms of $2 million an episode times 20 episodes, the studio's in the hole for $40 million a year on that deal. Why would a studio do that? Well, a studio would do that cause a network says, "Hey, I'll give you a licensing fee of 50% if you allow me to put your show on television."

So, the studio says, "Okay, well I just went down from running deficits of $40 million a season down to running deficits of $20 million a season. That's a lot better." So why would a network do that? Well, the network, their job is to put shows on television and sell advertising. That's their job. So, the network is only going to pay the studio $20 million a year if they feel like the advertising spots that they sell during the airing of that show is going to exceed that $20 million. Otherwise, they don't have a business. So, I'll pay 20. As long as I make 30, then I have a business. So, the network is happy. But the studio is still running deficits at $20 million a season. Why would they do that? They would do that because they believe that they have a syndicatable asset. They believe that the show that they have after the exclusivity period is over. They can license to other networks and make that $60 million back and then some. So, we're talking about podcasts. Those opportunities exist as it relates to podcasts. You have a company that makes the podcast, it gets licensed and can be syndicated in very much the same way.

Joe Charles (17:53):
That is interesting. So, my last question is, what advice would you give the clients? How would they prepare for these trends?

Tony Mulrain (18:03):
Well, if you're an individual client that's an actor, you might want to get yourself lined up, get yourself experienced in that voiceover space. It's far less time consuming to do voiceovers for an animation show than to be on set. You might do voiceovers and it may take an hour. So, diversify the services that you offer. I mean, the other thing of course is it's great to be in front of the camera, but it's not bad to be behind the camera either. So instead of waiting for somebody to employ you, position yourself so that you can employ yourself and others. In terms of athletes’ name, image and likeness, it really is tied very much to their performance on the court. So, the first thing that you have to do is be very good at what you do. Be very good at what you do, and then surround yourself with adept marketing professionals that can maximize your opportunity in the space. There's no supplement for having true marketing professionals comparing your brand DNA to that of a company, instead of just waiting for the phone to ring. Actually, putting together an analysis that shows why this client is the perfect match for Goodyear or whatever the company happens to be. But matching that brand DNA with a company's brand DNA, being active instead of passive, there's no substitute for that.

Joe Charles (19:34):
Love it. This has been great, Tony. I really appreciate having you as a guest. Really enjoyed our time together. And if any of our listeners would like to get in contact with you, how would they do so?

Tony Mulrain (19:46):
Oh, absolutely, simply by email, Anthony.Mulrain@hklaw.com.

Joe Charles (20:01):
Thank you so much. Once again, I'm Joe Charles, and for any information, feel free to visit us www.alliant.com/sportsandentertainment. Take care.