January 18, 2024
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The Essential Guide to Director Agreements

Tom Waddick
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The best foundation for a successful producer-director relationship is a carefully negotiated director agreement. This document serves as the blueprint for the director's involvement, responsibilities, and compensation throughout the filmmaking process. Whether you're dealing with a union or non-union production, understanding the nuances of director agreements is crucial.

In this post, we will explain what director agreements are, walk through their various components, and talk about how to tailor a thorough director agreement for your next project.

Plus, we have two free templates for you to download and use: a director agreement for Directors Guild of America (DGA) theatrical productions and a director employment agreement for non-union productions.

Download our free director agreement templates

Before we delve into the intricacies of director agreements, we invite you to enhance your understanding by downloading our free templates.

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Whether you're dealing with a DGA theatrical production or a non-union project, our templates provide a solid foundation for your agreements. You can use the agreements to follow along as we explain the ins and outs of director agreements. 

What are director agreements?

Director agreements outline the terms and conditions of a director's involvement in a film. These agreements clarify the scope of the director's services, compensation, and creative control. They serve as a legal framework to ensure a collaborative and mutually beneficial relationship between the director and the production team.

One of the primary distinctions in director agreements lies in whether the director is a member of the DGA. DGA agreements come with specific rules and regulations that must be adhered to, ensuring fair treatment and compensation for directors.

Regardless of whether they are union or non-union agreements, most director agreements share many of the same key components.

What are the key components of director agreements?

Director agreements are legal contracts that establish the foundation of a production company’s relationship with a director. As such, they have several integral components, including: 

Services and engagement

Directors wear many hats throughout the filmmaking process, from pre-production to post-production. Director agreements define a director’s responsibilities. The agreement outlines their role through crucial phases like development, pre-production, production, and post-production.

During pre-production, the director starts casting, hires their team, and begins location scouting. Production/principal photography defines the period when the picture is filmed. During post, the final stage of production, the picture is edited, the soundtrack is composed, music is licensed, and the film is completed. 

The term during which the director’s services will be exclusive to the production company is open to negotiation. Exclusive simply means that the director cannot work for other companies, in order to focus his or her attention on the production.

For example, you might negotiate that the director’s services are non-exclusive during the writing and casting periods, but exclusive during pre-production, principal photography, and post production.

Compensation structure

Compensation is a critical aspect of any director agreement. Even Shakespeare has to get paid, after all! The structure typically includes fixed fees, deferred compensation, and contingent compensation based on the film's success. 

Fixed compensation is dependent on the production budget and is paid to the director in installments throughout their term of engagement.

Contingent compensation is most often calculated based on net profits and usually ranges between 5% and 10% of the film’s net profits. More established directors may negotiate contingent compensation based on gross receipts, though this is rare.

Deferred compensation can take the form of a box office bonus or a nomination/awards bonus. Box office bonuses are arbitrary amounts, paid at different levels, based on domestic or worldwide box-office gross receipts. For awards bonuses, the amount of the bonus and the award type—”Best Picture,” “Best Director,” etc.—is specified in the director agreement.

The DGA’s basic agreement has minimum compensation rates that you must follow if working with a DGA director, although they can always negotiate for more. If the DGA agreement does not apply, the fee is entirely negotiable. Negotiating director pay always involves important considerations such as the director's track record, the project's budget, and industry standards.

DGA considerations

For directors affiliated with the Directors Guild of America (DGA), agreements must meet the rules of the DGA’s basic agreement. DGA membership comes with specific minimum compensation requirements, and agreements must comply with these standards.

If hiring a DGA member director, your production company must be a signatory to the DGA agreement. As a DGA signatory, the production company can only hire DGA members for certain roles, such as assistant director and second unit director.

As a DGA signatory, the production company will also need to make certain mandatory contributions to the DGA pension and health plans.

Approvals and creative control

Directors play a pivotal role in decision-making from selecting the cast and crew to cutting the film. Director agreements detail the extent of the director's involvement in key decisions, ensuring a balance between creative control and production requirements.

As an industry standard, directors are usually afforded the right of meaningful consultation regarding:

  • screenplay
  • cast
  • director of photography
  • cameraman 
  • unit production manager
  • production designer 
  • costume designer
  • film editor
  • sound engineer
  • sound editors
  • lighting designer
  • special effects chief
  • composer
  • music editor

The most hotly negotiated component of creative control is who has final-cut authority. Typically, the production company or studio has final cut. However, well-established and highly proven directors may negotiate the right to final cut.

Following the DGA agreement, a director is entitled to present their cut to the production company. Often the director has “two cuts and two previews” such that they may prepare a cut, preview it, respond to feedback, and re-edit the film.

Representations and warranties

To protect both parties, directors provide representations and warranties regarding the originality of their work and the absence of copyright infringement. 

The director will also represent and warrant that they have authority to enter into the director’s agreement and that they have not entered into any conflicting agreements. 

Finally, the director should agree to an indemnity clause, certifying that they agree not to hold the production company liable for monetary loss or legal fees related to breach of contract. In turn, the production company should agree to a reverse indemnity clause certifying that they will not hold the director liable for losses related to production.

Duration and scope

The agreement's duration is critical, outlining when the director's services are exclusive and when they can consider other opportunities. 

During periods in which the director is non-exclusive, it is common to engage them on a  “non-exclusive, first-call basis.” 

This simply means that the director is free to work for other companies during this time, but should competing obligations arise, the director must prioritize their commitment to the production company.

On-screen credits

On-screen credits are more than just a formality; they reflect the director's contribution to the film.

In film, directors are afforded the last credit on the main title at the beginning of the film according to the DGA agreement. If credits appear as end titles at the film’s conclusion, the director’s credit is the first credit on the screen. Below the maximal, multilingual opening titles for Gaspar Noé’s Enter The Void show this with “A Film By” and “Directed by” credit. 

Some directors may receive additional credits, like “A Film By” credit or credit for their production company if it provided production services for the film.

Insurance and travel

Considering the unpredictable nature of filmmaking, insurance provisions for directors are vital. Agreements detail the production's responsibility for providing insurance coverage and handling the director's travel expenses.

If the director is required to travel more than 50 miles from his or her residence, you should provide the director with airfare, accommodations, and a per diem. The DGA Basic Agreement details specifics regarding travel, accommodations, and per diems for DGA members.

Termination and suspension

In the event of unforeseen circumstances or contractual breaches, termination and suspension clauses define the conditions and procedures for ending the agreement.

How to pay directors with a director agreement?

Now that we’ve covered the standard compensation models outlined in director agreements, you might be wondering: How do I pay a director with a director agreement?

Many directors work through loan-out corporations. In this circumstance, the director has an agreement with their loan-out corporation in which they agree to provide their exclusive services to the company. The production company should enter into the directors agreement with the loan-out corporation and pay the director through their loan-out.

How Wrapbook supports DGA contracts

Navigating DGA contracts can be complex, but Wrapbook simplifies the process. Our platform supports the intricacies of DGA agreements, ensuring accurate payroll and compliance with industry standards.

How to negotiate a directors agreement?

Negotiating a director agreement requires finesse. By balancing creative freedom with financial considerations, you can achieve a mutually beneficial agreement.

As with any important entertainment contract, we recommend soliciting the services of a specialized entertainment lawyer to help draft and negotiate your director agreement. Our templates provide a great place to start your drafting process.

How to tailoring director agreements for non-union productions

For non-union scenarios, customization is key. Unlike DGA agreements, non-union agreements offer producers and filmmakers more flexibility in defining terms and conditions.

You’ll still want to include all of the above-mentioned components in your non-union director agreement, however you have more latitude to negotiate specific terms with your director. 

For example, in a non-union director agreement you don’t have to adhere to the DGA minimum compensation rates or pay into the DGA pension and health plans. You’re also permitted more flexibility in negotiating approvals and creative control. If you’re hiring a first-time director, you may want to call more of the shots when it comes to hiring crew and editing the film. 

In all situations, director agreements must strike a balance between flexibility and legal compliance. Our downloadable director agreement templates help you tailor these agreements to fit your unique production needs.

Wrapping up

The director is the heartbeat of any film, and a clear, comprehensive director agreement for either a DGA filmmaker or non-union director is the foundation of a successful partnership. A well-negotiated director agreement sets the stage for a successful collaboration, helping facilitate a seamless filmmaking process.

With the tips and guidance from this essential guide on directors agreements, we hope you will be better equipped to embark on your filmmaking journey with confidence.

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Disclaimer

At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice.  You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.

About the author
Tom Waddick

Tom is a filmmaker, producer, and marketing specialist based in Los Angeles.

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