Film Production Agreements: The Essential Guide | Wrapbook

Film Production Agreements: The Essential Guide

09 July 2020 | Phillip Paquette

Are you looking to get the full terms of a production in writing? For most projects, this comes in the form of a production services agreement. Despite their prevalence in the entertainment industry, these often go misunderstood. Or at the very least a dreaded, but necessary legal hurdle producers must leap.

In this article, we’ll break down the most common terms you should ask your entertainment laywer about before you start production.

What is a production services agreement?

A production services agreement is a contract between an investor, distributor, or lead-producer who wants to hire a production company to execute on different aspects of producing a film, television program, commercial, or other media production.

Depending on the film production services agreement, this can include a combination of developing the project and in some cases overseeing pre-production, filming, and post. With a financier or distributor’s requirements in mind, then the production company brings expertise, knowledge, personnel, and other resources to the table to deliver the project.

In addition to model release forms, production agreements are a crucial legal documents producers should create before begining work.

A general production services agreement definition is just a contract between a production company and the studio and/or financier.
A general production services agreement definition is just a contract between a production company and the studio and/or financier.

When should you use a production services agreement?

If any of these scenarios apply, you need an agreement in place before any principal photography begins:

  • You own or control the rights to a screenplay and have financing in place, but don’t have the resources to manage payroll, accounting, casting, hiring personnel, and other operational aspects of production and don’t want to share ownership or control of the project.
  • A client wants a project to use a famous actor and/or union workers for a commercial. However, the agency hired isn’t affiliated with SAG/AFTRA. This agency then needs to partner with a union production company.
  • You have a greenlit concept for an animated project, but need technical expertise and experience to produce it.
  • To keep the legal mumbo jumbo to a minimum, film production agreements are needed to avoid risk and misaligned expectations occurring at any stage of your production.

What does a production services agreement include?

Any deal will specify the people and projects involved in the agreement; other specific terms of film production service agreements vary but may include…

Services Provided

The agreement will indicate the script or other material to be produced, and likely includes a thorough statement of work listing all of the specific services to be provided, often designating the specific person(s) who will complete them. A film production services agreement states when, where, and in what form the deliverables shall be completed, along with any must follow technical, commercial, and other standards.

Schedule Adherence

The schedule will define the timeline for deadlines of various aspects of the project. More often than not in a film production services agreement, the delivery schedule is an exhibit. In other words, the contract attaches the schedule on a fresh page covering milestones like:

  • First day of pre-production
  • Middle of pre-production
  • Start of principal photography
  • Middle of principal photography
  • End of principal photography and beginning of post-production
  • Delivery of final cut

Transfers of Rights

When a financier controls the rights to a screenplay to produce a film, they will usually transfer the rights to the production company to complete the project in a film production agreement. Post-delivery of the film, the contract stipulates the production company will transfer the rights back to the investor.

Credit

The production company and personnel will get specific credit(s) for the project as long as they perform as expected.

All sorts of problems can happen here when this isn’t addressed in the film production services agreement. For example, if a production company doesn’t get executed contracts from a cast or crew member.

If you don't have an ironclad film production agreement, you could end up like the producers of Caddyshack.
If you don't have an ironclad film production agreement, you could end up like the producers of Caddyshack.

In 1988, Warner Bros. sued comedian Rodney Dangerfield arguing he breached an oral contract to appear in Caddyshack II. When the dispute came to court, Los Angeles Superior Court Judge John Zebrowski exclaimed from the bench “Aren’t you people ever going to come in front of me with a signed contract?”

Insurance

The financier will require the production company to possess insurance and name the financier as covered by the policy in case any claims or losses come due to the production company’s mistakes. Within film production services agreements, the production company also typically will require the investor to compensate them for any loss due to any claims that could occur around underlying rights and screenplay.

Explore production insurance programs offered through Wrapbook.

Budget Adherence

Along with specifying the budget, the film production services agreement may also state the production company is responsible for any over-budget expenses or overruns — as long as they are not due to approvals being withheld or late changes requested by the investor. In some cases to encourage staying on budget, the production company may be allowed to retain some or all funds left-over once production wraps.

Fees and Schedule

This specifies the cash flow schedule to fund the production. The schedule spells out the payments to the production company.

Whomever with your project handles payroll will be key here. If payroll isn’t managed properly or residuals go unpaid, unions may attempt to collect money from the easiest prey.

Track expenses, timecards, invoices, and more with Wrapbook.

Script Adherence

While minor alterations are often fine, most changes or variations from the screenplay will require the investor’s approval.

Takeover Rights

The Financier may also want in writing the right to take over the production. The film production services agreement might include takeover rights due to specific issues like:

  • Project going over budget
  • Missing project schedule deadlines
  • Certain warnings from the completion bond company

Approvals

The financier often has the right to designate and/or approve certain aspects of the production including director, screenplay writer, cast members, and changes to the script.

Work Made For Hire

In many film production services agreements, all personnel and vendors agree that their work-product belongs to the production company, which can then assign those contracts to the financier. Similarly, the contract will provide that the work-product of the production company is made for hire work, and that all copyrights belong to the financier.

Distribution Rights

The agreement will clearly say the financier has the right to control the distribution and after approval, the production company will have no further rights to the source material.

Wrapping Up

As you go down the puzzling path, while you’ll find film production service agreements is the most common name for the contract, specific contract terms will vary.

While this article might be a starting off point for your research, talk to your entertainment lawyer to draw up the full agreement for your specific production needs.

If you or your team is looking for simpler solutions to onboarding and managing a film crew, schedule a Wrapbook demo.

Phillip Paquette

Phillip Paquette is an Austin, TX-based storyteller and content strategist that's worked both on behalf of agencies and directly with brands. Catch his business musings on Medium.

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