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Pre-Contract Phase between a Producer and a Distributor in the Film Industry

STUDENT PAPER

By Amy Nguyen

Chambery, France

 



ABSTRACT

An incomplete distribution agreement between a producer or filmmaker and a distributor often leads to legal issues and courts that are time and cost consuming. On the contrary, a well-documented and understood agreement can encourage distributors and producers to go beyond the business expectation and fully respect the contract and the work of each other. Focusing on the legal terms and conditions on a distribution agreement in the film industry, the paper aims to advise the main conditions in a contract that must be mastered and discussed before signing any deal. The conclusion of the paper suggests that the agreement must be properly documented with explicit legal rights ownership and a common strategy decided between the producer and the distributor.

Key Words: Entertainment, Film Distribution, Project Management, Pre-Contract Phase, Rights

INTRODUCTION

About 5,000 independent films are made every year. However, “less than 5% of all these movies end up in distribution”. And this is not because the movies, the scripts or the plots do not deserve to be distributed. It seems like filmmakers are unprepared and not enough aware of the requirements of a proper contract regarding legal issues. It took them efforts to realize their work and produce a movie. Then, to establish a distribution deal is essential to show publicly their hard work and recover their expenses. Producers and distributors must master and understand the deal involved before signing a contract, particularly in this moving industry in which digital distribution lead to new strategies. A contract between a producer and a distributor should be thought carefully and strategically and need all documents and requirements to be valid without future legal issues.

The aim of this paper is to advise the best practices required in order to fully sign a well-documented contract in the film distribution industry. It represents a key point to help the filmmaker’s and distributor’s contract to succeed. It will provide an understanding of the main contentious point in the relationship between producers and distributors.

To summarize, this paper has been designed to answer the following research questions:

1)     Why producers must master the concept of copyrights and legal issues?

2)     What is the benefit of having reserved rights?

3)     How can producer and distributor gain an opportunity from the digitalization?

METHODOLOGY

The paper compares the legal aspects of a distribution agreement with the different baseline guides such as the American Institute of Architects (AIA), the Guild of Project Controls Compendium and Reference (CaR), the International Federation of Consulting Engineers (FIDIC), the Construction Specifications Institute (CSI) and the Engineers Joint Contract Documents Committee (EJCDC). Then, the paper will use the Multiple Attribute Decision Making (MADM) method to benchmark the best attribute of each and propose a change proposal in a distribution agreement. Finally, the paper will analyze the pressure for and against this proposal using a Force Field Analysis.

  1. A) Comparison with the AIA

In term of legal protection, the AIA consider several important points. It ensures that instrument of services like the design and the drawing are secretly used for the solely purpose of the project.

  • “Through careful participant selection and contract drafting, integrated project delivery (IPD) participants achieve a level of comfort that project information exchanged will be utilized only for project purpose.” (4.1.5 Sharing Sensitive, Proprietary or Confidential Information)

A distribution agreement does not particularly ask for the confidentiality of the project but does also give exclusive rights to the distributor for the only purpose of the project. One main difference with the AIA would be the implication of the parties in the project that remains distant in a distribution agreement. Moreover, producers can ask the help of an attorney but it is usually preferable not to involve an indirect link between the producer and the distributor. On the contrary, the AIA tries to include all parties and considers an entity to help them negotiating the rights. That encourages designers and constructors to better collaborate. A separate entity can be created in that purpose but that also represents an inconvenient as designers and constructors will share the risks.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].



About the Author 


Amy Nguyen

Chambery, France

 


Amy Ngugen
is a second year master student in Project Management & Business Development from Skema Business School. She was born in France and is emotionally attached to Vietnam. Trained as a circus artist since young, she experienced the challenges and efforts artists encounter in the performance of their art. She worked for a six-month internship in an entertainment company, Lune Production under Square Group Investment Holding in Saigon, Vietnam. In addition to this internship, she also has experienced the Asian Corporate Culture through her first year master in Suzhou, China.

Contact her on: [email protected] or https://www.linkedin.com/in/amy-claire-nguyen/