Mgr. VLADIMÍR VOJÍŘ
INTERNATIONAL TV CO-PRODUCTION AGREEMENTS
Jihoafrická republika, KAPSKÉ MĚSTO
13. - 16. 11. 2000
SITHENGI 2000 - The 5th Southern African International Film & Television Market
Cape Town, 13th - 16th November 2000
presented by Vladimir VOJIR
I am in charge of discussing and negotiating terms and conditions of both international and domestic co-productions. I made a lot of international co-production agreements between Czech Television and TV broadcasters and independent producers. I also deal with computer models for co-productions and other agreements between TV broadcasters and independent producers. I would like to tell a few words on problems of co-production and co-production agreements:
What is co-production? There is no legislative definition. Co-Production is collaboration amongst two or more parties in which each party invests value in order to produce a program of mutually acceptable quality and content.
The whole process of TV co-production includes three basic stages:
1) DEVELOPMENT STAGE mostly includes: treatment (incl. choice of director and stars), budget (depending upon co-producers technical and editorial needs and upon extend of underlying rights), forecast of co-producers contributions, acquisition of underlying rights from right holders and contributors, basic shooting schedule and delivery date
2) PRODUCTION STAGE includes the Co-Production Agreement between the parties
3) DISTRIBUTION STAGE - listen to/see below
Such agreements comprise/would comprise generally a few chapters - spheres - areas:
1) juridical provisions: the preamble, definition of the parties to the agreement, definitions of the object, copyright and distribution rights, closing formal provisions (e.g. the way for settling disputes, governing law, competent courts etc.)
2) technical provisions: defining e.g., the carrier to be used for the original recording, the type of lighting installation that should be provided for shooting and operated by a co-production partner, what format should be used for, e.g., the ON-LINE prepared transmission copy for producing language version, etc.
3) commercial provisions: - i.e. how much money we are decided to invest in a project, when and in what form - and what benefits we shall obtain for our contributions, taking into account problems that may occur in this area, e.g. different taxation, the existence/non-existence of any agreement on avoiding doubled taxation between concerned countries, different V.A.T. rates, etc. - see also pt. 1)
4) organisational aspects: production schedule - who and when to supply certain materials, when the work will be completed and delivered to the other partner (s) and other requisites including, at least, the date of signature.
5) artistic aspects: - for instance an annex to the agreement may comprise the production treatment approved by co-partners - to avoid any misunderstandings as to production artistic level and/or contents in future.
I think that co-production agreement should be based on arriving at a compromise - i.e. a brief, lucid, logically structured agreement covering the five above mentioned components in their optimum proportions.
As to concrete co-production agreements:
In terms of agreement composition & structure
and its intelligibility, as well) I recommend to simplify the agreement, except its mandatory preamble and object definition, as much as possible paying due regard to its logic. Agreement structure would comprise the following articles, distinguished each another by their contents and separated formally - by graphical means: The following should be clearly defined:
1) Preamble - defining the Parties of co-production
2) Object of Agreement - definition (specification)
3) Specification of the Co-production Programme (i.e. its basic characterisation comprising, e.g., its working title, duration, number of episodes, format and technical specification, shooting locations, names of leading creative artists and - possibly as an annex - its treatment/synopsis approved by the partners.
4) „A“ co-partner's INPUT: an enumerative list of all individual contributions and obligations of this co-producer especially:
exact extent of underlying rights to be acquired for the co-producers/distributors (and including warranty for their acquisition)
financial investment - contribution to the budget including payment schedule - cash flow
production facilities, resource and staff
locations and venues
archive footage, records and/or other copyright materials
5) „B“ Co-partner's INPUT: - see above
6) „A“ Co-partner's OUTPUT: everything what is gained by or vest to this co-producer for its contributions (INPUT) to the project - i.e. (except its artistic values) the extent of granted rights to the programme, distribution rights, profit share from distribution, co-production credit, copyright notice etc.
7) „B“ Co-partner's OUTPUT: - see above
8) Production shooting schedule and delivery date
9) Other Arrangements - i.e. any other provisions that have not been „covered“ by the previous articles e.g.
editorial control (general principles) and consultations (treatment/script, casting, budget, rushes, rough and final cut – editing rights)
technical specification of final carrier, additional materials, delivery, technical acceptance or rejection
production of different versions (language)
opening and closing credits
physical ownership of the master and unused footage
10) Closing Provisions/ Standard Terms: - i.e. mandatory legal provisions and formalities.
As the above relates to bilateral co-productions, for a larger number of co-partners only the INPUT/OUTPUT articles need to be rearranged/extended (e.g. from „A“ even up to „Z“), or for improved clarity, these may be presented as supplements to the agreement (the INPUTS, in particular).
In terms of law and commercial:
1) „to stop“, as much as possible, in a compromised compliance with different national copyright laws/regulations applicable to individual co-partners, any additional claims that may be placed later by third persons, creative artists, contributors involved in the co-production in particular, and to indemnify partners one another in similar matters;
2) to define clearly the copyright in the programme itself (resp. distribution rights) owned by the co-producers as to their:
time periods (unlimited - for the full period of copyright/limited by time and how)
territory (only in co-partners own territory, either all over the world or in specific territory)
STANDARD TV (including DVB-T, DVB-S and DVB-C)
HOME VIDEO and DVD
INTERACTIVE AND ON-LINE
exclusivity (yes/not, for what territory);
3) to define (if need) clearly the derived/secondary rights - Merchandising, Book Publication etc.
4) this above issue relates also to the profit shares in distribution receipts/licensing revenues resulting from the sale of the co-production programme:
distribution is made exclusively by Partner A; Partner B has no share in the receipts;
share of ?? % in the receipts (after deducting distribution costs /or a lump sum/ in favour of the distributor (i.e. Partner A);
distribution is made exclusively by the two partners (directly/indirectly) in their licensed territories without sharing of receipts
distribution is made non-exclusively by the two partners (directly/indirectly, after co-ordinating their terms/prices of sale). The receipts are distributed between the partners in a proportion („x %“ for A, „y %“ for B);
distribution is made non-exclusively (directly/indirectly) by the two partners without any co-ordination of terms/prices and distribution of receipts (partners realise their own sales on an individual basis).
the co-producers will appoint distributor (can be one of co-producers) and will agree principles of distribution (commission, costs, profit shares etc.)
In terms of the basic form of co-production:
1) bilateral: two co-producing parties
TYPE I - true co-production, common script editing, the two partners participate physically in the production (not only by financing it).
TYPE II - true co-production, common script editing, Partner A provides mainly artistic and programming aspects, i.e. the subject matter, script, creative members of the production staff, casting, etc., while Partner B is responsible for the production itself, its technological aspects in particular.
TYPE III - co-financing (the production is carried out by one partner and the other takes part in financing and script editing in a more or less active/passive way;
TYPE IV - co-financing (the production is carried out by a third party, commissioned to do it by one co-producer, while the other partner contributes to the production budget, too).
2) multilateral: (more than 2 co-producing parties)
TYPE V - true co-productions (see above)
TYPE VI - a pool system
TYPE VII - co-financing - i.e. the accumulation of resources provided by co-partners (and their possible editorial involvement and subsequent commissioning of an independent producer with the production.
From the above it can be drawn that at least seven model agreement should be prepared in a computerised form for the particular seven categories (TYPE I - TYPE VII) in different formats (PC/IBM and MAC) that would represent something like a „basic sauce“ in which relevant facts and specific data (e.g. programme title (s), parties' names and addresses, time schedules, concrete % of the share from receipts etc.) can be „soaked“ by any secretary, to provide an almost finished draft agreement.
The applications will be operative and productive and modifications very fast, as one need not conceive and comment each agreement from the very beginning.
From my experience in negotiating international co-productions, I can say that the standard of agreements varies substantially. I assume that a good agreement should be almost like a manual and requires not only legal but also technical and economical knowledge. Problems ensue not only from different legal regulations in various countries but also from a different approach to agreements in general.
Personally, I strive for a compromise solution that through a generalisation make possible a certain standardisation of agreements that are then clear, logically and visually arranged and thus acceptable for all. Besides, these model agreements, created in commonly used PC formats, substantially speed up the whole process and lower its cost.
I would welcome an exchange of experiences with colleagues from other countries.