What is a Production Agreement?
An agreement is an understanding between two parties. A production agreement is a contract between the producer of a particular project and its crew. It outlines the level of compensation, the rights and obligations of the producer and crew, as well as the requisite industry standards. It implies a legal responsibility or obligation between the two parties.
The purpose of a production agreement template is to provide a common base to make agreements between producers and employees in the production industry. Having a production agreement document pre-printed with your contact details makes it easier and more importantly, in writing, to have your business information such as your pay rates, job descriptions and responsibilities, location information, and job scope available to everyone on set . It helps eliminate misunderstandings and disputes by making things clear before they start.
Every production company has its own set of standards and practices, such as pay rates, expectations for crew and locations, etc. A production agreement is a way to communicate those standards and practices to all parties. It helps to ensure the goal is achieved according to company standards in a timely manner.
If you regularly hire employees in the production industry, a production template can also save time and money. It lets you spend less time on administrative tasks and allows you to focus on the creative aspects of the job.
A production agreement template is commonly used in industries related to the production of TV shows or movies, such as film, television, theatre and video games.
Key Components in a Production Agreement Template
It is imperative for any production agreement template to be drafted with a specific format. The first step is to identify the parties involved, and their specific roles in the production process. The producer of a film, video, or other audiovisual project must be identified, as well as a description of the financial and/or other contributions by the producer to the project. Any creative contributors, such as the director, writer, and principal cast members must be identified, together with the nature of their respective contributions.
Payment terms are usually based on the total cost of the project, broken down into budgets for pre-production, production, and post-production costs. In addition to the actual production costs, several other terms should be outlined in the production agreement template. The agreement should specify all of the licensing agreements covering the talent being used, as well as any royalties that will be paid to the talent. Any costs related to the recording of a soundtrack, and the licensing and exploitation of the soundtrack should be delineated. All of the licensing rights of the producers concerning the finished film should be clearly spelled out, with respect to video distribution, distribution to cable television, foreign distribution, and any other exploitation or marketing strategies.
A properly drafted production agreement template should cover three categories of content: the script, the filming of the project, and the actual sound recording. In order to obtain licenses for the filming of the project, a producer usually needs to obtain all necessary rights regarding the content, such as the literary rights, rights of privacy, or publicity rights. With respect to the actual sound recording used in the production, if the producer needs to obtain licenses that are covered under the Copyright Act, it would also need to obtain a sync license to record the music and lyrics, and a master use license to obtain permission to use the specific song. With regard to the recording of a soundtrack to be used in the production, the producer would need to license in advance the performance of a specific artist together with the other related rights governing the project. The producer may also require the recording of narration with the new sound track. A special licensing agreement may be required for the use of narration on promotional videos for the film.
Advantages of Using a Production Agreement Template
The clear benefit of a production agreement template is that you don’t have to worry about whether all of the terms are present or not because templates will have all of the necessary terms included. In fact, some of the most common reasons for disputes that we see, stem from unknown or poorly drafted terms in a production agreement.
A simple example of a poorly drafted term in a production agreement is the "Work for Hire" language. Most non-lawyers will not understand that such language, if included in a production agreement, may give rise to a dispute down the line concerning the ownership of the underlying work. We’ve seen this happen with musician work made for producer clients of ours. The musicians absolutely believe that they own the music that they created while under an agreement with one of our client’s. Obviously, our client has a different interpretation. I can assure you that common ground is not easily found when negotiating a resolution to such a dispute. A clearly written production agreement, that covers the owners of the underlying music, would have saved our client thousands of dollars in legal fees.
Another clear benefit of using a production agreement template is that your productions will become more efficient. When you are familiar with the terms of a basic production agreement, you do not have to spend time figuring out if development and production stage terms are contained in the agreement. I’ve drafted so many production agreements now that I automatically include stage headings and provisions, as well as standard terms and provisions, in my templates. The same goes for other areas of a production agreement, like publicity, location releases, etc. As I mentioned above, my templates give me a head-start on drafting a production agreement. Again, that saves me and my clients time later in the process.
A simple tip: Make sure to track the changes in each version of your production agreements. This will help you to identify commonly needed provisions that can be incorporated into templates that save you time in the future and make you a more efficient attorney.
How to Edit a Production Agreement Template
Production agreement templates are an excellent way to rapidly standardize production agreements. However, it’s important to remember that specific customization may be necessary to match your particular needs.
When using a template for a production agreement, there are six areas that typically require customization: There may be additional sections of the production agreement that need modifying based on your specific situation. Whenever possible, it is important to avoid heavy customization of the template, as this often defeats the purpose of using it in the first place and may limit its future use. Overuse of heavy customization could also result in excessive legal fees. If you regularly perform similar types of productions , it probably makes sense to have a standard set of production agreement templates (i.e., template sets). From a legal perspective, this generally simplifies the process. The ultimate goal is to have a sufficient number of template sets to match most of your productions. In this way, you are able to save time and money while at the same time maintaining a level of standardization throughout your productions. If you use a production agreement template set for a particular type of production, and later create a production agreement for a project that falls into that category, it is likely that most of the terms and conditions will not require heavy customization. Heavy customization can take a lot of time away from the entertainment attorneys and production accountants working on the deal.
Key Mistakes to Avoid in Production Agreements
The single largest pitfall encountered in production agreements is not understanding the business system in question before creating the agreement. For example, if the producer instructs the buyer to buy directly from a certain supplier, even though the supplier is terribly over priced, that provision should be red flagged. The premise of the agreement is for the buyer to get the best price, not the best price from one designated supplier. While perhaps at first it seems like acceptable solution to avoid the back and forth of qualifying suppliers, it always leads to problems, likely because the relationship between the buyer and seller is so upsided.
Another large pitfall is conflicting direction between the buying agent and the selling agent. It’s important to note specifically in the production agreement who will be in ultimate control of decisions. Should there be a disagreement, without an outsized voice of any one party, it creates confusion that is impossible to resolve.
Finally, if inventory is highly expensive, and stock levels are low, this could be a production agreement red flag. As a business we teach people that inventory never makes you money and in fact, is the first thing to be cut when times get tough. There are exceptions to the rule of course, but if the business has a tendency of stockpiling inventory & selling the same good, red flags should go up. We also recommend limiting the ability to carry large amounts of inventory as simply having a high level of money tied up in inventory puts a lot of pressure on cash flow. This is the quickest way to go bankrupt.
We recommend that producers and buyers specifically outline who will control which aspects of the deal and, if necessary, the buyer should encourage the selling agent to get outside legal advise before executing their agreements.
Where to Find Trusted Production Agreement Templates
When it comes to finding reliable production agreement templates, there are a variety of resources available both online and offline. For those who prefer a quick and cost-effective solution, the internet is an excellent starting point. Many websites offer a selection of free or low-cost templates for different types of production agreements, from simple licensing agreements to more complex co-production agreements. It’s important to look for websites that are reputable and have positive customer reviews, to ensure that the templates have been legally vetted and are up-to-date with current laws and regulations.
If you’re not comfortable downloading a template from the internet, an online template provider is a great option. These platforms usually charge a monthly or one-time fee to access a library of templates, which can be customized to fit your specific project. A particularly good resource is Rocket Lawyer , as it has a wide range of templates and other useful services for anyone who plans to create content.
For those who prefer a traditional approach, local law firms or legal service providers often have a library of different types of agreements that can be rented out or shared online. Alternatively, professional organizations and unions related to film and television production may also have templates available for their members, and could provide access to legal assistance in drafting a customized template for your specific needs.
Lastly, for large-scale productions, you can always hire a legal professional to draft a production agreement from scratch, tailored to your individual and project requirements. This is especially important for high-budget productions where any misstep in drafting can result in significant loss of time and money.
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