Co-productions are big opportunities for film makers, directors and the cast as they bring artists from different nations together and create multinational pieces of art. They are also provided financial support based on certain eligibility criteria from national and EU authorities. On one hand they have financial, artistic and marketing advantages for the film but on the other hand, they involve some risks in relation to management of the project.
Creating a balanced structure both for day to day management and financial liabilities of parties is crucial for the co-production. If this balance is not established on a fair basis, even the co-producers with good intentions might find themselves in a dispute.
Before drafting the agreement, co-producers should carefully work on the budget in order to determine liabilities of parties and requirements of funding institutions. However, most of the time this budget will be subject to change since the initial plans are made on assumptions and not on approved funds or cash flows. Including flexible provisions is a good way for amending the budget in order to meet the changing demands along the production period.
Intellectual Property Rights
The other essential headline is the intellectual property rights of the film and their ownership. As a basic rule, the rights should be jointly owned by all co-producers pro rata to their shares and the appointment of worldwide distributor should be decided jointly. Another point for co-producers to decide should be the exclusive and shared territories and application for national funds should be taken into consideration. When defining the territories, it is better to be as specific as it gets to prevent future discussions (e.g. do Benelux rights include French-speaking rights?). IFTA guides and documents may be considered as a framework and broadcast overspill issues and required technologies should be regulated under the co-production agreement as well as the distribution agreements. In case of application to more than one national or regional funding, the relation between such funds, restrictions, methods for changing co-producer shares and required documents should be carefully evaluated.
Appointing one or two delegate producers for day to day management of the production and major decisions is usually favorable for the sake of the film. National and international funds will usually need one delegate producer for the application procedures which will ease the paperwork and application process but it should be carefully designed under the co-production agreement in order to protect rights of other co-producers.
The structure of the deals and projects will vary in practice. Most of the time, one of the co-producers will be the lead producer who wants to have a final say on the creative and artistic part of the production. However, since the other parties will also be co-producers (and not only co-financers) this artistic authority should be discussed, maybe restricted in certain ways and agreed upon prior to starting a co-production.
It is also advised that these major points as well as other commercial terms are evaluated and the co-production agreement is signed before the production starts. Otherwise several contractual matters may be deemed as deadlock situations and the production may suffer from the dispute. Each co-producer should investigate the financial background and reference projects of other co-producers to avoid surprises during the production.
Underlying rights, funding, over-cost, underspend situations, insurance and credits are some of the other headlines to be considered in co-productions. Co-production of films should be evaluated as building a new structure where each level and third party relations should be solidly constructed by co-producers and their legal advisors experienced in this field.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.