KEY POINTS TO CONSIDER WHEN CONTRACTING A CO-PRODUCTION WITH A PRODUCING THEATRE

3.1 Artistic

•Who chooses cast, creative team, etc.

•Who approves designs etc. - to what standard is the physical production to be built (e.g. class 1 timber)

•Who has overall artistic control.

3.2 At Producing Theatre

What is budget, who pays costs

•Does producer make "top up" payment to producing theatre, if so how much

•Who owns rights to play, who pays royalties to author

•Who retains box office receipts

•Does producing theatre pay any part of box office receipts to producer

•Are all cast and creative team paid by producing theatre - any top up from producer to cast or creative team

•Who authorises/pays any over budget costs

•Billing and programme credits/biography for producer.

3.3 During Commercial Exploitation of Production

•What will producing theatre receive: - weekly royalty on box office receipts or is it fixed - rising on recoupment - built in royalty waivers

•Any profit share (if any)

•Are rights assigned to or already owned by commercial producer

•Lump sum payment (if any) for physical production to producing theatre

•Hire charges (if any) for physical production to producing theatre

•Who owns physical production and who maintains, stores and insures it

•Right to use graphic design(s) and production photos from producing theatre

•Arrangements for commercial producer to take over hired (or borrowed goods) from producing theatre

•Billing and programme credits/biographies for producing theatre.

CO-PRODUCTION AND JOINT VENTURE DEALS

1. Different Types

•General non-specific

•Limited partnership

•Big Investor as “Associate Producer”

•Specific for particular production

•Dominant or managing partner

•Equal Strength

•Co-Production Agreement between “partners” or joint company with defined corporate structure and shareholder’s agreement (tax considerations)

2. Co-Production Agreements (Points to Address)

1 Statement of Objectives

•generally

•specific production

•new material

•development expenditure

2 Name of Joint Venture

•query whether separate joint venture company

3 Division of Responsibility

•finance

  • budget
  • generally (non production)
  • raising outside investment
  • loans by co-producers

•production management

  • dates and services

•administration and accounts

•locallicences, work permits, banking, VAT etc.

4 Bank Accounts Mandate

•general accounts

•production accounts

5 Billing credits

6 Consultation and Approval Rights

•good faith

•written or oral

•assumptions

•“major” & “minor” decisions

•artistic decisions

7 Contract with thirdparties

•names

•signatures

8 Access to accounts,contracts and otherrecords

9 Reports

10 Individual personal services

•separate agreement

•nominated representatives

•effect of disabling event

•producer’s royalty & management fees

•travelling subsistence and other non-overhead expenses

11 Specific ProductionParameters

•capitalisation

•maximum royalties

•caps, pools and deferrals

•theatre

•budget

12 Profit & Loss Shares

•with investors

•between co-producers

•indemnity and contributions

13 Professional appointments

•solicitors

•accountants

•graphic designers

14 House seat sharing

15 Termination

•of production

•of joint venture

•closure decisions (see below)

16 Order of application of production revenue

•running exes (inc. royalties and fees)

•reserves

•production costs overage

•internal loans

•investors’ subscription

•profits distribution

17 Attention to business

18 Conflicts

•competing productions

19 Arbitration

20 Usual “Boilerplate”clauses

3. Closure Decisions in Joint Venture Co-Productions

A.Theatre may take decision out of co-producers’ hands e.g.

•where fixed season or term

•where contractual right of theatre to require closure in specified circumstances

B. Where one co-producer wishes to close and other does not

•open-ended run

•penalties for early closure

•need of co-producers to legislate in advance

•possible requirements of a “dominant” or “managing” co-producer

•points to address:

  • circumstances in which one co-producer entitled to insist on closure or withdrawal e.g. 4 weeks’ continuous running loss. Should be required to make up his/her mind within specified time window
  • Alternatives
  • either can insist on closure
  • either can continue if other wishes out
  • only one (i.e. managing or dominant partner) able to continue
  • (time-window for election)

•conditions for “take over” by one co-producer to exclusion of the other:

  • future financial and artistic control and responsibility
  • indemnity (but query financial status of continuer)
  • co-production accounts
  • treatment of closure and get-out costs
  • eventual disposal of physical assets
  • reserves
  • possible penalties under theatre contract
  • effect on co-producers’ profit share and royalties.
  • query development royalty
  • impact on investors
  • transfer rights
  • any other contractual adjustments