Many films, TV programs, and other media productions involve production services agreements. These are written contracts between a production company and a producer, investor, or distributor who wants the company to complete some part of the production. The financer or distributor can outline their goals for the project in the agreement, and the production company will use its specialized expertise to execute them. Production services agreements may cover what happens before, during, and after filming. They provide clarity at the outset of the project so that each side understands the expectations of the other side, minimizing the risk of disputes down the road.
A film production services agreement will identify the nature and scope of the project, the people involved in the project, and the script that will be produced. It also will outline all the services provided under the contract, possibly identifying the individuals who will be responsible for performing each service. The agreement will provide any general standards that must be met, and it will provide deadlines for certain stages of the project. The schedule in the agreement may set dates for when pre-production, principal photography, and post-production will start, as well as when the final cut will be delivered, among other markers. The production services agreement also will assign distribution rights to the producer and terminate the rights of the production company to the source material once the project has been approved.
Transfers of Screenplay Rights
A producer or other financer often owns the rights to a screenplay that they will turn into a film. The film production services agreement transfers those screenplay rights to the production company temporarily. A well-written agreement will provide that the screenplay rights will revert back to the producer once the final cut has been delivered.
Creative Elements of Production Services Agreements
Some producers may want to closely supervise the production process. In the production services agreement, they can provide for a right to choose important individuals involved in the production, such as the director, writer, and lead actors. They also can require the production company to get approval for changes to the script. While minor tweaks often do not require approval by a producer, producers usually will want to review major changes to a screenplay to ensure that it still aligns with their vision.
Copyright is a key issue for any creative work. A production services agreement generally will classify the work of the production company as a "work made for hire" under copyright law. This means that the copyright belongs to the producer. A production company may have individual contracts with various people involved in the project, assigning their work to the production company. In turn, the production company can assign the work covered by those contracts to the producer.
Right to Production Credits
If they successfully complete their obligations under the contract, the production company and certain individuals will receive credits for the project. Disputes sometimes arise when a production services agreement does not clearly cover this issue, or when a production company does not execute written contracts with people involved in the production who normally would receive a credit.
Financial Elements of Production Services Agreements
A production services agreement will provide a budget and may make the production company responsible for any expenses that go beyond the budget. (Exceptions usually will be provided for excess expenses caused by the producer, such as changes to the production or delays in approval.) If a production does not use its entire budget, the agreement might allow the production company to keep some of the unused funds.
An agreement also will address insurance for the production. The producer will be the covered party in the policy if any claims or losses occur for which the production company is at fault. On the other hand, the producer usually must compensate the production company for losses caused by claims involving rights related to the screenplay.
Also, a production services agreement should provide a schedule of payments to the production company. It must manage payroll carefully to avoid disputes with unions.
In some cases, a producer may stipulate that they have a right to take over the production if certain triggering circumstances arise. These might include failing to comply with project deadlines or exceeding the project budget.