Negotiating the Co-Production Partner Relationship
Photo credit: Charles Deluvio
In the film and TV industry, co-production partnerships can unlock new resources and markets, but they require careful negotiation. Below is some practical advice on how to strike a confident, balanced co-production deal.
Understanding Co-Productions
A co-production is when two or more production companies jointly produce a film or TV project, sharing the responsibilities, risks, and rewards. These can be domestic or international, with international versions split into private arrangements or official treaty-backed co-productions which receive certain benefits like tax credits, grants and status as a national production in each country.
Benefits and Challenges of Co-Productions
Co-producing brings clear benefits: partners can tap into each other’s funding, expertise, and local audiences as well as sharing the risk of the production. However, challenges often arise around creative control, decision-making deadlocks, and financial reward. It’s critical to have clarity between the parties at the outset on their expectations on core deal points, to save the co-production from falling apart after the long-form negotiations commence.
Core Deal Points
To ensure a successful co-production partner relationship, the parties need to understand and be clear on their position on the following key points:
• Chain of Title & Rights Ownership: confirm that any underlying rights are properly assigned. Define the ownership of copyright percentages of the completed work.
• Roles & Responsibilities: set out in detail the roles and responsibilities of each of the parties on all matters relating to the production. Avoid assumptions – make sure the contract clearly specifies each party's role in all matters relating to the production, including shared tasks.
• Approvals & Decision-Making: determine which decisions require mutual consent (e.g., director, lead cast, budget, distribution) and where each partner can act independently. Include a mechanism for deadlocks.
• Fees & Compensation: agree producer fees, overhead allowances, and reimbursement for prior development spend. Clarify when payments will be made.
• Profit Share & Recoupment: be clear on the revenue waterfall - in what order the parties recoup their investments and how any profits are split. Make sure you are in agreement on the definition of gross receipts/net receipts and include audit rights to ensure transparency.
• Credits: specify the company and individual credits each party will receive (placement and whether of equal prominence) and don’t forget to include provisions for credit removal if a partner defaults.
• Future Productions: establish the basis on whether the parties will work together on any future production based on the project.
• Disputes & Exit Scenarios: be clear on each party’s expectations in the event of a dispute between the parties or termination of the agreement for any reason, including a partner default, funding shortfalls or a force majeure delays production. Set out rights ownership, buyout, takeover, and termination procedures for these scenarios.
Final Takeaways:
A successful co-production relies on understanding and alignment on key issues. At Reviewed & Cleared, we advise on all types of contracts required for a production. We can give you the support you need to make sure that any co-production relationship you enter into perfectly suits your desired needs from the relationship and minimises any risk to your interests, so please do get in touch if you have any questions.
Atlanta Webster
Atlanta is a highly experienced Business Affairs consultant in the media and entertainment industry, with more than 17 years of top tier firm, broadcaster, platform, and in-house experience (including as Director of Legal), advising companies, creators and A-list talent and individuals.
News & Views Category: Film & TV
