On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”).  The Act is a $2.2 trillion swiss army knife of economic relief provisions meant to reduce the impact of the COVID-19 pandemic on various parts of the U.S. economy.  Among these provisions is the $349 billion Paycheck Protection Program (the “PPP”), an expansion of the Small Business Administration Economic Injury Disaster Loan program (the “SBA”).  The purpose of the PPP is to help small and middle market businesses pay their employees and otherwise keep the lights on during the economic slowdown.  As entertainment productions grind to a halt worldwide as a result of COVID-19, the PPP may be a welcome boon for entertainment businesses trying to stay afloat during this challenging time.

Before addressing the rules, it should be emphasized that taxpayers should file their PPP loan applications ASAP.  It is anticipated that the $349 billion allocation to the PPP will be quickly absorbed and accounted for by applications submitted by this Friday (April 3), which means that applications filed next week may be out of luck unless Congress elects to expand the size of the PPP fund.  With that as our background, we continue with a general description of the PPP.


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As the coronavirus pandemic yells “Cut!” across the world, the entertainment industry will feel the economic impact, with theaters closing their doors, lower attendance at film festivals, delayed productions, and the like.  Business managers and entertainment businesses, however, may feel some relief as Treasury called in sick and postponed Tax Day for 91 days.  The news first broke via tweet on March 20, 2020, when Treasury Secretary Steven Mnuchin announced on Twitter that Tax Day will be moved from April 15 to July 15.  A few hours later, the IRS fleshed out Mr. Mnuchin’s announcement by publishing Notice 2020-18, which provided more details regarding the taxes covered and the taxpayers affected by the new deadline.  The move is one of several recent measures taken by the federal government as it attempts to relieve the immense economic strain being put on Americans by the COVID-19 pandemic.

This announcement comes just two days after—and supersedes—Notice 2020-17, which postponed until July 15 the payment but not the filing of federal income taxes and imposed limits of $1 million for individuals and $10 million for corporations with respect to such postponement.  Notice 2020-18 restates and expands upon Notice 2020-17 by eliminating the distinction between payment and filing of taxes for purposes of the new deadline and by doing away with any pecuniary limits on the amount of tax that may be postponed.


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As the U.S. braces for the coronavirus COVID-19 pandemic, companies across a broad range of industries are increasingly affected by the growing restrictions on travel and trade.  Practically speaking, concerns abound over issues like whether airlines will issue refunds for cancelled flights, or what happens to manufacturers who source materials from Asia.  Indeed, the entertainment industry is not immune either.  For instance, what if a production contract calls for filming in Hong Kong next week?  What if talent is unable to leave their home country for a concert tomorrow?  What if, heaven forbid, talent is under mandatory quarantine while recovering from the virus?  At times like these, the answers usually lie in the contracts, specifically in a powerful provision that is often underestimated because it is only invoked in the unlikeliest of scenarios: the force majeure clause.
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On December 6, a federal jury in the Central District of California found that Tesla CEO Elon Musk did not defame cave diver Vernon Unsworth by referring to him in a tweet as “pedo guy.” Unsworth v. Musk, No. 2:18-cv-08048 (C.D. Cal. Dec. 6, 2019). Unsworth, who helped rescue a boys’ soccer team from a flooded cave in Thailand in July 2018, alleged that a series of tweets Musk published to his nearly 30 million Twitter followers were defamatory, falsely accused Mr. Unsworth of being a pedophile and child rapist, and caused Unsworth worldwide damage to his reputation and emotional distress. The jury deliberated for less than one hour before finding in favor of Musk.

During a CNN interview following the 2018 rescue, Unsworth had criticized Musk’s showing up to the cave site with a mini-submarine as a “PR stunt,” and said that the mini-submarine “had absolutely no chance of working” to save the boys. Unsworth’s complaint alleged that Musk retaliated against this criticism with a series of defamatory tweets and a series of defamatory emails sent to a Buzzfeed News reporter.


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The NCAA has traditionally restricted college athletes from accepting any endorsements or compensation related to their participation in college sports. But less than a month after California enacted the Fair Pay to Play Act, which will prohibit the NCAA from preventing college athletes in the state from profiting off their commercial identities starting in 2023, the NCAA’s board voted unanimously to allow students across the country to benefit from the use of their “names, images, or likenesses.”

Name, Image, and Likeness

The right to profit from the commercial use of one’s name, image, and likeness, referred to as the right of publicity, prevents others from exploiting one’s identity without consent. Arguably, the NCAA’s previous policies interfered with athletes’ rights of publicity—while the NCAA and its member schools profited from college athletes’ names, images, and likenesses, the athletes received no compensation.


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This Article is part of a series monitoring developments with regard to California Assembly Bill 5 and its impact on the entertainment industry.

California Governor Gavin Newsom recently signed into law Assembly Bill 5 (“AB5” or the “Bill”), which redefines the distinction between an employee and an independent contractor. AB5 is primarily targeted at gig economy companies such as Uber and Grubhub, whose workers had been classified as independent contractors up to this point. Proponents of AB5 argued that many gig economy workers worked full time but received none of the benefits commonly associated with full time employment—including overtime, minimum wage, and workers’ compensation. Consequently, AB5 was touted as providing increased benefits and rights to a growing gig economy workforce. An additional impetus for AB5 was the legislature’s desire to stem financial losses to the state as a result of worker misclassification, including the loss of tax revenues.


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Two federal courts recently dismissed defamation claims brought against the New York Times and the Kansas City Star, finding the subject articles employed standard investigative journalism techniques that immunized the newspapers from liability under state defamation laws.

In Croce v. New York Times Co., No. 18-4158 (6th Cir. July 17, 2019), the 6th Circuit upheld the dismissal of an Ohio State University cancer researcher’s defamation claim, finding that a “reasonable reader” would interpret the article as presenting both sides of the controversy.  The suit arose after the Times published an article examining Dr. Carlo Croce’s cancer research in the context of a broader piece about the inherent conflicts present when large research institutions reap millions of dollars in grant money for “star” researchers, and then are put in the position of investigating those researchers’ methods.
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