As we witness the evolution of the regulatory landscape across the MENA region, it was timely for us to investigate and lift the lid, on what is keeping the region’s legal decision-makers awake at night.
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When a film production team gets to the stage where they are developing a Director Services Agreement (‘DSA’), the show really has the green light and things are starting to get really busy! There will be little time to close the legal contracts necessary for getting the show made. To help, we have prepared a summary of the key provisions to include in DSAs.
The following are the top provisions to be incorporated, and strongly negotiated, in a DSA.
It is often helpful to include a brief overview of who the parties are (i.e. whether the producer is an independent produceror a production company, and the position and experience of the director), the parties’ relationship and whether they have experience working with each other (if any) and some basic details about the content being produced (i.e. film, series, music video etc).
It is important to accurately and clearly identify the rights and obligations of each party, and ensure any changes or additions to such rights and obligations are required to be recorded in writing. Do not shy away from setting out your obligations, and instead including only those required to be undertaken by the other party. Remember a well written agreement mitigates the likelihood of a dispute, and having each parties’ obligations clearly documented means there is less likelihood of delays and disputes in the future. Some key obligations of the producer/production company are as follows:
Some specific duties of directors that should be outlined in the DSA include:
It is important to determine and set out who is responsible for the creative aspects of the production. This is usually the director, right? Yes, but how is creative control defined? Should we say that the producer is responsible for all the ‘behind the scenes’ technical, logistical and operational aspects of the film, whereas the director is responsible for everything that appears onscreen? Where does this overlap? It is important to spell this out.
Tracking money movement and expenditure should be a priority. Budget should be clearly defined, as should who has ultimate control of the budget. Does the producer hold the money pot, and dish out as the director requests, or is it split 50/50? Is money provided upfront or on a reimbursement basis? Who deals with ad hoc budgetary movements?
A correctly drafted intellectual property clause will make or break future distribution. Parties must consider who will own the intellectual property and who will receive a licence. Usually, a joint intellectual property model is unadvisable because it would require both parties to agree prior to any exploitation of the content. This creates frustration and gridlock, and could be used as a leverage against the other party in the event of a dispute. There have been many nightmare cases where a piece of work was never exploited because of a gridlock dispute between two parties. Also, it is important to cover not only the intellectual property rights in not only the finished product, but also all materials that were used to create the finished product, and all derivatives of such finished product.
Also, ensure all material owned by third parties is adequately assigned or licensed.
We suggest warranties are included so that contribution to the production will not cause the production to be actionable for breach of copyright or passing off nor will the production be defamatory of any person. Compliance with relevant content laws are very important, as breaching these rules could have major consequences. Furthermore, culturally, privacy is very important in the Middle East, so it important to ensure the film does not invade the privacy of any person or breach the confidence of any person.
A DSA may include a provision which states that if any full length feature film or series is developed from the production into a derivative work, whether by the parties themselves or in conjunction with third parties, the parties agree that the producer has the exclusive option to be the production company that is appointed to produce the derivative work. The director may also request the same right.
Credits are perhaps one of the most heavily negotiated aspects of any DSA. The entertainment industry is notoriously reputation driven, and the attention span of the average individual no longer allows them to troll through the end credits with a magnifying glass – unless their favourite uncle is featuring! Positioning and ordering of credits must be negotiated and documented in writing.
Parties must ensure they do not discuss the project or contents of the agreement with anyone outside the engagement – no spoilers!
In smaller deals, both the producer and director may share responsibility in the marketing and promotion of the film. Otherwise, it is just one, or a third party is hired. This will need to be documented.
A party’s financial exposure should be capped, with all applicable exclusions (e.g. for intellectual property infringement) recorded.
In the usual course, parties should be able to terminate a contract for material breach, and in some cases, for convenience (with minimum notice requirements). In a DSA, it is important to document how money will be refunded in the event of a party triggering its termination right. In case things go badly wrong, and the producer has handed over the entire budget to the director in advance, the contract needs to clearly set out the director’s obligation to give this money back immediately on notice. Parties should also consider whether termination is allowed for force majeure events such as events occurring as a result of a pandemic. If so, in what circumstances will the director or producer be able to take over and run with the production?
There are many important elements to getting a production off the ground, but all of them need to be negotiated and recorded in writing in order to prevent disputes and disagreements down the track. By ticking the boxes summarised above, a savvy production team will be well on its way to being able to comfortably and calmly sit back and watch the show.