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• Artist, Director, and Producer Agreements
• Facilities Agreements
• Composer and Music Synchronisation Agreements
• Co-production Applications and Agreements
When the producer has raised the finance necessary for the
production of the film, he will be required to enter into
numerous agreements in order to engage and retain necessary
personnel.
It is normal, in the case of an independently produced and
financed film or television production, for the producer to
form a new company to be the production company; all the rights
and contracts secured or entered into during development will
be transferred to this new company, and all production personnel,
facilities, finance and services will be contracted by that
company.
The following are some of the agreements that the production
company will enter into:
A. Production Agreement
A Production Agreement is the agreement between financiers,
distributors or broadcasters and the production company. At
its most simple, a Production Agreement sets out the terms
for the film the Producer is to make and provides that the
financier/distributor/broadcaster will make available finance
to do this.
Production Agreements are fairly long and complex documents.
What follows is a summary of the most important aspects of
a Production Agreement, from a production standpoint.
1. Budget: the Production Agreement will contain an undertaking
on the part of those financing the film to provide finance
up to the amount of the approved budget for the film. The
budget will be paid to the production company in accordance
with a cash-flow schedule. Both the budget and the cash-flow
schedule will be annexed to and be part of the Production
Agreement.
2. Banking: the production company will always be required
to open a Production Account through which all finance is
routed. The amount of money that may be withdrawn from the
account on a weekly basis is limited to the agreed cash-flow
schedule. The production accountant will keep careful records
of all monies spent on a daily and weekly basis and reports
on such expenditure are normally sent to financiers on a weekly
and sometime daily basis. Financiers will insist that the
bank where the Production Account is held will not exercise
any rights of set-off it may have against the production company.
3. Statement of Cost of Production: following delivery of
the film, the production company will be required to prepare
a statement of the cost of production certified by the production
company's auditors. This is an essential document because
it dictates, amongst other things, the point at which "net
profits" arise.
4. Rights: the copyright in the film and all ancillary and
subsidiary rights may be assigned by the production company
to the investors/financiers of the film. Banks will also take
charges and distributors and broadcasters will take distribution
and/or broadcast rights.
Also, the production company will be expected to have acquired
sufficient rights from contributors to the film (such as the
writer, the director, the talent, composers and owners of
music rights) and any necessary licences or consents required
from owners of rights to enable the film to be commercially
exploited in all media throughout the world in perpetuity.
5. Technical and Other Specifications: the production company
will be required to produce the film in accordance with a
particular specification comprising both creative and technical
elements.
6. Budget Savings: the Production Agreement will generally
provide that any budget savings are repaid to those providing
finance although sometimes a production company will share
an underspend.
7. Insurance: the production company will be required to
have in place full insurance arrangements in respect of the
film. The principal types of insurance required include Errors
and Omissions Insurance, Employers' Liability, Public Liability,
Cast Insurance, Property Damage, Negative and Raw Film Stock
Insurance.
Investors/financiers will normal require their interest to
be included on the policy. They will normally insist that
they are named as additional insureds and "sole loss
payee".
Errors and Omissions Insurance covers claims for infringement
of copyright, defamation or invasion of privacy. Normally,
the production company obtains insurance cover for a period
of 3 years from delivery of the film.
8. Approvals and Controls: a financier/investor will normally
nominate a production representative who will be entitled
to be present during the production of the film and who will
be entitled to make representations to the production company
and to exercise any rights of artistic approval taken by the
investor/financier.
The degree of artistic control enjoyed by this representative
will be a matter of negotiation. The representative will normally
have a right to view the rushes, the first rough cut of the
film, the work print and the final print.
9. Default, Take-over and Abandonment: if the production
company commits any act of default of its obligations, the
financier/investor will always enjoy a right to take over
the production of the film. In these circumstances, the investor/financier
can either elect to complete the film or abandon it. When
there is a completion guarantor involved, the investor's/financier's
rights here will normally be subject to those of the completion
guarantor.
The events giving rise to a take-over or abandonment will
include running over budget, falling behind the production
schedule, failure to agree on essential elements, failure
to obtain approvals, departure from agreed specifications,
important breaches of warranty and business failure.
10. Delivery: delivery of the film is normally effected by
the physical delivery to a named laboratory of all of the
film items listed in a Schedule of Delivery Items.
The delivery provisions of Production Agreements will also
frequently include provisions for the acceptance of the items
delivered. These provisions are principally concerned with
the completeness of the items delivered and their being of
a satisfactory technical standard.
In addition to film elements, the production company will
be required to deliver documentation relating to the film
such as a statement of credit obligations, music cue sheet,
music licences, certificates of origin etc.
B. Producer's Agreement
It is the function of the producer to ensure that everything
which is necessary to enable the film to be produced in accordance
with the budget of the project and the production schedule
is done.
The responsibilities of the producer include, the commissioning
of original treatments, development of screenplays, selection
and contracting of artists, selection and contracting of the
director and the production team, negotiation with financiers,
negotiation with distributors, sales agents and broadcasters,
overseeing principal photography and post-production up to
delivery of the completed film.
Form of a Producer's Agreement
1. Engagement: the producer will be engaged for the entire
period of the production schedule. Financiers will usually
insist that the producer works on the particular film project
exclusively until delivery. Producers nearly always want to
get on to the next job during post-production. The usual compromise
is that the producer will be available on a first-call basis
during post-production.
2. Rights: the producer will be expected to relinquish any
interest in any copyright works and waive any moral rights
that he/she has.
3. Fees: the producer will be paid fees on a weekly basis
and will have expenses reimbursed. Where a producer has negotiated
this, he or she will also be paid a share of the net profits
of the film.
4. The producer will be required to give customary warranties.
5. A producer will normally take rights of approval in respect
of certain matters, principally the choice of talent. Generally,
however, the financiers will have the last say as to who is
selected.
6. Credit: the contract will provide for the producer to
receive a credit on all positive prints of the film and in
major paid advertising. It is customary for the producer to
be given a single card credit before that received by the
director. However a producer may also attempt to negotiate
a proprietary credit for himself or his company, e.g. "a
[Company] production".
C. Director's Agreement
The function of the director of a film is the development
of the screenplay with screenwriter, the direction of the
cast and crew and the creation of the final edited version
of the film.
When a director is involved in the film in another capacity,
e.g. as a writer or producer, he or she will have separate
agreements for each function.
Form of a Director's Agreement
1. Engagement: the contract will generally provide for the
engagement of the director from a set date until delivery
of the film. He/she will normally be exclusive to the production
company during preproduction, production and editing and then
on first call until delivery.
2. Rights: the director will be expected to assign copyright
in the film to the production company and waive moral rights.
3. Fees: the director will be paid a fixed fee in instalments
over the term of his involvement on the project. Normally,
the director is also paid a share of the net profits of the
film.
4. A director will be required to give customary warranties.
5. The director will be asked to acknowledge that he or she
has seen and approved the production schedule, the budget
and the screenplay for the film. The director will also be
asked to give the same acknowledgment to a Completion Guarantor.
6. Cuts: one provision which is often the subject of intense
negotiation is the clause in the contract dealing with the
"director's cut". This depends upon the status of
the director. Cutting rights generally range from none to
the final cut, vis-a-vis the Producer. It is very unusual
for a director to get an absolute final cut vis-a-vis the
financiers. A Completion Guarantor will generally wish to
limit the cutting rights of the director. Most commonly, a
director is given a "first cut", also known as "director's
cut".
7. Approvals: another provision which is also the subject
of substantial negotiation is that dealing with approvals
and consultation. This, again, depends upon the status of
the director. Rights of approval and consultation range from
none to mutual approval of the main cast, screenplay and key
crew.
8. Credit: the director is always accorded a single card
credit in the form "directed by", traditionally
in the last position before the film starts. Well known directors
also get so called "possessory credits" in the form
"a film by [Director]".
D. Agreements with Leading Artists and Other Personnel Agreements
Lead actors and actresses are normally engaged under the
terms of long form agreements negotiated between the production
company and the agent representing the talent, rather than
on the basis of standard Equity Agreements. Agreements for
the services of lead talent are often the most time-consuming
and difficult contracts to negotiate.
Important Provisions in Agreements with Leading Artists
1. Engagement: the contract will normally specify a period
or periods during which the artist should be exclusively available
for pre-production, shooting and sometimes postproduction
(but usually on a first call basis only). A producer will
normally expect the lead talent to make themselves available
for a certain number of days for publicity purposes. From
the production company's point of view, the contract should
normally provide that the talents' services should be made
available longer if a production schedule changes.
2. Rights: the artist will be asked to give to the production
company all rights necessary to record and commercially exploit
their performances and also to issue the artist's likeness
and biographical details in connection with the publicising
of the film.
3. Fees, Profits and Expenses: fees and profits are always
a matter of negotiation with the talent's agent. Fees should
cover buy-out of all use fees payable under any relevant Union
Agreements.
Expenses are often negotiated at length and depend on the
status of the artist.Expenses normally cover travel, accommodation
and meals. Often, in the case of well-known artists, a production
company will normally be expected to provide a car with a
driver and a private dressing-room or accommodation on location.
4. Credit: along with expenses, this is the clause in the
contract most often negotiated. The size and order of billing
are generally regarded very seriously by artists and their
agents.
5. Dubbing and Doubles: the production company will normally
negotiate for the right to alter, change, re-arrange or delete
the whole or any part of the performance and specifically
provide for the right to dub the artist's voice or substitute
doubles.
Equity Agreements
Artists other than the lead talent will normally be hired
under the then current terms of engagement for members of
British Equity. Equity Agreements normally provide for a minimum
basic fee, together with additional use fees payable in respect
of the use of the artist's performance in various media and
various territories. These "use fees" are normally
bought out so that no additional fees are payable in respect
of the exploitation of the film.
The Musicians' Union
A number of different types of Agreements exist for the engagement
of Musicians' Union members. These normally provide for a
combined use payment which permits the worldwide exploitation
of the music in the film in all territories and in all media.
The Crew and Technical Personnel
The crew are normally engaged under standard agreements prepared
by the Trade Union BECTU.
E. Music Agreements
The music included in the soundtrack of a feature film will
often comprise music specially commissioned for the film.
A composer of music will also normally be required to orchestrate,
arrange and adapt music as well as conducting music and generally
supervise its recording. Occasionally, a composer will also
be engaged to act as an instrumentalist or vocalist.
If music other than commissioned music is proposed to be
used in the film, then synchronisation licences will need
to be obtained from the owners of the musical composition(s)
being performed (usually a music publisher).
There is separate copyright in a musical composition and
in a recording of a musical composition. Thus, if an existing
recording of that music is also proposed to be used in the
film, a synchronisation licence for that recording (sometimes
called a master use licence) will need to be obtained, in
addition, from the owner of the copyright in the recording
(usually a record company).
Form of a Composer's Agreement
A composer's agreement will normally deal with the following
matters:-
1. Engagement: the agreement will define the services the
composer is expected to render and the nature of the music
he is to compose and conduct; the composer will normally be
expected to work over a fairly tight timetable during the
post-production period of the film;
2. Fees: the composer will normally be paid a basic fee payable
in instalments over the period of the engagement (usually
on commencement of writing, commencement of recording and
delivery of finished masters);
3. The composer will be required to give customary warranties;
4. The composer will grant the production company the right
to use his name, likeness and biography in exploiting the
film and the music;
5. Rights the agreement will provide for the ownership of
the copyright in any music written by the composer. Sometimes
the production company will buy out these rights and arrange
for the publishing rights in the music to be exploited either
by its own publishing concern or by a commercial publisher.
Alternatively, the copyright in the music will be owned by
the composer with the film company enjoying a world wide,
perpetual synchronisation right in respect of the use of the
music in the film in all media and a share of the publishing
royalties;
6. If it is proposed that the music to the film will be commercially
released as a soundtrack album, the composer may be entitled
to record royalties.
The Performing Rights Society Limited
Most composers will be members of the Performing Rights Society
Limited ("PRS"). When a composer joins the PRS as
a member, he/she assigns the "performing right"
in any compositions written by him/her to the PRS. The performing
right includes the public performance, broadcast and cable
transmission of music. PRS collects royalties from exercise
of such rights in the compositions. In the case of film music,
the major sources of public performance income are the fees
and royalties paid by theatre owners and broadcasters (TV
and radio) when the film and the compositions are publicly
performed in theatres and on air.
The Mechanical Copyright Protection Society Limited
This Society protects and administers the right to synchronise
(or dub) music onto films and thereafter to reproduce the
music mechanically on copies of the film as part of the process
of exploiting the film. Its members are composers and publishing
companies, and, more often than not, it will be to this Society
that producers will apply for licences to synchronise existing
music which has not been especially composed. For a feature
film, it is normal to "buy out" the music rights
so that the film can be exploited in all media forever; this
is not necessarily the case in other forms of programming
such as music video, where it is normal to pay a royalty on
sales of video units.
The UK broadcasters have entered into "blanket"
licences with the MCPS for the synchronisation of music for
television use in the United Kingdom, and producers can normally
make use of these arrangements when making programmes under
commission for UK broadcasters.
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