Following on from our previous article on contracting creative talent, in the latest article in our ongoing series on making an independent production, Peter Ward looks at some of the considerations when bringing on board producers and directors.

Jargon buster – above the line and below the line

At the outset, it is useful to debunk a piece of industry jargon in the context of the roles in a production, namely “above the line” and “below the line”. The term “above the line” refers to the roles that are instrumental in the creative development of the production. These include the producers/executive producer, director, writers and key cast members. “Below-the-line” roles are the rest of the crew – the casting directors, hair and makeup artists, set designers, cameramen, boom operators, grips and so on, who have more operational duties and whose hard work on the ground gets the production made. The terms come from the early days of film making where the budget sheet would have a literal line separating above-the-line and below-the-line costs.

Producers

In previous articles, we have sometimes used the term “producer” as shorthand for the production company itself. However, the production company will, in turn, engage individual producers to assist them with project managing the production to bring it in on time and on budget.

Producers are not a single genre. For example, on a large production, there will be several different levels of producers, from executive producers to line producers.

Let’s have a look at what these different types of producers do and some of the considerations from a legal perspective when individual producers are engaged to help make a production.

Executive Producers

On a major production, an executive producer (EP) is appointed by a studio or financier in order to provide oversight of the production, particularly from a finance perspective. There may be more than one EP, and they sit at or close to the top of the production hierarchy. Ironically, EPs usually have few truly “executive” functions in relation to the production. While they can be instrumental in sourcing talent and holding other producers to account, they are unlikely to be at the coal face managing the production budget and schedule on a day-to-day basis.

Sometimes EPs operate without a written contract, particularly where they have an ownership interest in the production company itself. Nevertheless, it is good practice for an EP to have a stand-alone services agreement in order to set out their duties and compensation. In particular, the parties will need to be clear on what the EP’s entitlements are to a credit on the production and the scope of their control/approval rights.

If the EP is entitled to a share of production proceeds and this is not dealt with elsewhere, their agreement will also need to set out how net proceeds are to be calculated and when and in what proportion the EP can expect to be paid from the production’s returns waterfall.

Co-producers

A co-producer can be a senior-level producer who works on a production in tandem with another producer at the same level of seniority. However, it is also a title that can be bestowed on key individuals who aren’t actually producers. For example, the key on-screen talent sometimes negotiates a co-producer credit as part of their overall package – a lead cast member, for example.

The elements of a stand-alone co-producer agreement will be similar to those for an EP, however, they are less likely to have a share of the production proceeds (although this is not impossible). If the co-producer element is instead a title which is being attributed to another member of the production team (such as a lead cast member), this can be dealt with by provisions in their services agreement, rather than a separate stand-alone agreement.

Associate Producers and line producers

Invariably referred to as the “AP”, the associate producer has more operational, “coal-face” type roles than a producer higher up the food chain. Their role can overlap with the role of a line producer and both report to more senior producers. The AP or line producer’s remit can include recruiting key personnel, planning start and end dates, organizing location shoots and scheduling, all the while monitoring the budget. Throw in management of stunts, lighting, rigging, transport, props, accommodation and crew HR issues and it quickly becomes clear that an AP or line producer’s role is among the most important on any production.

The services agreement for an AP or line producer will likely be more detailed as to the scope of the tasks they are required to undertake, as these are operational rather than strategic roles within the production. There will also need to be clear reporting lines set out in their contract and an understanding of which tasks the AP or line producers have delegated authority for and which they need approval for. In reality, productions are a fluid environment where communication is paramount. No matter what the contract says, if there is a clash of personalities or working styles, then it may be to the production’s overall benefit that an AP or line producer is removed. While this can be a difficult decision, good senior producers or EPs understand the benefit of swift action in such cases. The contractual documents must permit this with minimum friction.

Directors

As the creative lead in a production, a director’s input would ideally be provided at every stage of the production process, from as early as possible. In practice, though, unless they are also a writer on the production, it is unlikely that a director will be involved in the production development phase, which is the more natural domain of writers and producers. The director is more likely to get involved in the details at the pre-production stage. This is where they can start adding real value in terms of script breakdown and storyboarding.

It will be essential that the director’s contract sets out the point at which they are required to start providing meaningful input into the production process and the scope of their commitment to the project at each phase: pre-production, shooting/production and then post-production. The most intense period of effort from the director will be in the shooting phase, and the contract will need to include parameters around how long this phase will last. The director may also be asked to commit to a certain number of promotional days to publicise the production.

Exclusivity

The production company will want the director to exclusively commit to their production, however, the director will not want to tie themselves down during periods when they could potentially be taking on other work. The services will need to be exclusive during the shooting phase of the production; however, it is negotiable as to whether the director should be exclusive during the pre-production and post-production phase. A common provision is that the director’s availability is “non-exclusive, first call,” which means that they can take on other jobs, but the production has priority over their time in the case of competing interests.

Pay-or-play

The contract should also set out whether the director is to benefit from a so-called “pay-or-play” provision. This is a form of guarantee from the production company to the director that they will be paid in return for clearing their schedule to commit to the production. There is a tension between the production company wanting the director to commit to the production unconditionally, but being unwilling or unable to make the financial promise before the production is fully financed.

If the director is to commit to clearing their schedule, they will want any pay-or-play provision included in their contract to be activated on signature. This will be risky for a production that is not fully financed. A possible compromise is that the provision is included but not active until full funding is achieved. Until that point, the director is free to accept other engagements but must inform the production company before doing so in order to give them the chance to activate the pay-or-play commitment. The director may negotiate that their pay-or-play payment is ringfenced when made (for example, by being deposited in escrow) as proof of the production company’s financial commitment. The drafting and negotiation of all of these arrangements means fun and games for the lawyers.

Credit

There are some differences in custom regarding credit provisions between film and television productions. Directors of a film are normally the last credit seen on the main titles, when titles are at the beginning of the film. If titles appear at the end, the director’s credit will appear first. The idea is that the director’s credit is the one closest to the action. In TV productions, the placement of the director credit is more open to negotiation and the contract will need to reflect the agreed position.

Final Cut

A key issue in a director’s contract, particularly for a feature film, is whether or not the director has the “final cut”. The final cut is the version of the film that gets shown to the public.

The director will want the final cut so that their artistic vision is fulfilled. However, the production company and its financiers will likely have a trump hand – money speaks loudest in film production, as it so often does elsewhere. The sensitivities of different territories also need to be considered: the distributor of a film in a conservative country may require the right to remove graphic or explicit scenes. Clearly, a director cannot be given the right to final cut in all cases if the production company knows it will have to permit a foreign distributor to make appropriate cuts to comply with the tastes, customs or laws of its territory.

An accommodation can sometimes be reached where the director presents his or her final cut to the production company and its financiers, and this is reviewed with several rounds of feedback and revision ensuing, prior to the cut being deemed final. This arrangement can be clunky, so the contract will need to set out a clear process and timescales. An established or sought-after director is more likely to be able to negotiate more favourable conditions.

Compensation

The structure of a director’s compensation depends on multiple factors, over and above the pay-or-play considerations set out above. It is normal for the payments to be staged throughout the life of the production, with a percentage paid during pre-production (perhaps 10-20%, depending on the scope of the director’s involvement), the bulk paid during shooting and the final amount paid on delivery of the director’s cut.

Contingent compensation in the form of a share of net proceeds is a matter for negotiation, but a well-established or sought-after director will have more negotiating leverage. The contract should be clear on whether the director’s share is based on all of the net profits (however defined) or only a portion of them (i.e., a percentage of a percentage). Account should also be taken of a scenario where a streaming service buys all the rights in the production for a flat fee, thus removing the relevance of a net profits calculation. Other bonuses are negotiable, based on the success of the production. Suppose the director wins a “best director” accolade at a specified awards ceremony (such as BAFTA, Golden Globes, Academy Awards) for their work on the production. In that case, they can negotiate for additional financial compensation to be payable under their contract.

Other common provisions

Some other important points to capture in the director’s contract are set out below:

• The director should warrant that they are in good health. Given their importance to production, if they are likely to be ill and unable to perform their duties, this will have an adverse material impact. Similarly, the Director should keep the production company informed of their whereabouts and not engage in any hazardous activities without consent. Commercial flights are ok, but no bungee jumping, sky diving or shark cage diving
• Being a director is not a 9-5 job. They will need to work long hours for no additional remuneration. Filming days are notoriously gruelling.
• The Director is unlikely to be an employee of the production company, so the contract should be clear that they are paid gross and are responsible for paying their own tax. The Director will, however, want to be insured under the production’s errors and omissions liability policy.
• The contract should include parameters around running times and ratings. The production needs to be suitable for the intended audience.

If you require any assistance in drafting agreements for productions, contact Peter Ward of the Geldards Media and Entertainment Law team