KFTV's Film & TV Finance Magazine - page 10-11

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g u i d e t o f i l m & t v f i n a n c e
w i t h t h e n e t h e r l a n d s f i l m f u n d & n e t h e r l a n d s f i l m c omm i s s i o n
w i t h t h e n e t h e r l a n d s f i l m f u n d & n e t h e r l a n d s f i l m c omm i s s i o n
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g u i d e t o f i l m & t v f i n a n c e 
9
c o - p r o d u c t i o n s
c o - p r o d u c t i o n s
Lawyers will typically advise producers to draw up detailed
documents in advance that spell out the responsibilities.
The law is all about clear definitions, and can be pretty
unforgiving towards vague or ambiguous terminology.
T
he most obvious is the opportunity to
pool financial resources. Sometimes,
co-pro is the only way a producer can
raise the necessary budget to get something
made. On other occasions, it’s a way to share
risk and avoid financial over-exposure. In
certain circumstances, it can also be a way
of taking a good idea and making it great, by
putting more money on the screen.
Alongside these budgetary basics, co-pro can
be a way of harnessing government incentives
and subsidies in another country (usually via
bilateral treaties). It can also provide access
to great locations and cheaper crew/studios.
Other benefits include access to the co-pro
partner’s market, the opportunity to transfer
skills and knowledge, and cultural dialogue.
While most co-pro partners would admit that
the impetus to collaborate is usually driven by
financial imperatives, there are times when
co-pro can lead to a creative win-win situation.
The problem with co-pro, however, is that
there are downsides that can derail the
production. The most obvious is the need
to make creative compromises in order to
please all the partners. Projects that go the
co-pro route can sometimes be creatively
diluted and lose their cultural uniqueness.
There are also costs attached to co-pro, some
of which may not be obvious at the outset.
Aside from travel and accommodation costs,
for example, unexpected problems with
permitting, shortage of kit/key crew members
and unanticipated weather stoppages can
quickly erase the benefits of the co-pro
financial model.
It’s also important to keep in mind that, if
things do go wrong, you’re dealing with more
than one legal jurisdiction. To minimise the
risk of a legal headache, there are a number of
basic things you can do. The first, and most
obvious, is to work with a partner you trust.
Many producers spend a long period of time
in dialogue with potential partners before
actually going as far as commencing a co-pro.
Not only does this provide an insight into the
way they work, it also helps illuminate the
kind of pressures they are under within their
own market. One of the key things that can
undermine a co-pro is a lack of shared vision
or objectives.
Once you do take the plunge, you need to
be crystal clear about the nature of the
co-production and the parties contracted to
it. The law is all about clear definitions, and
can be pretty unforgiving towards vague or
ambiguous terminology. Is the co-production
operating under an official treaty or not? Is
it seeking to access tax incentives and, if
so, what are the mechanisms being used to
trigger them? Is the co-pro partner the only
company doing any work outside your own
enterprise, or have they sub-contracted to
third parties? If so, what is the legal character
of those relationships? And what happens
if the budget of the project rises because of
actions taken by the partner over which you
have no direct control?
Even at the early stages of preparation, the
legalities of co-production can look pretty
daunting, so it’s wise to have a lawyer on
board as early as possible. Getting an
experienced lawyer involved during contract
Co-production has a key role to play in both the film and TV
businesses for a number of reasons.
Why do bilateral co-production
treaties matter?
Co-productions come in many forms. But Treaty or Official co-
productions are a very specific kind of arrangement drawn up by
two governments that wish to boost their respective audiovisual
sectors through closer co-operation.
In the case of the UK, for example, a treaty
co-production partner can access UK tax
relief, the BFI Film Fund and funding in the
UK’s nations and regions. Being “British”
might also allow a co-produced film to enter
festivals or awards ceremonies.
The UK currently has treaties with
Australia, Canada, China, France, India,
Israel, Jamaica, Morocco, New Zealand,
Palestinian Territories and South Africa.
Canada, by comparison, has agreements
with around 50 countries.
Official treaties are often agreed in principle
and then sit unratified for a number of
years until politicians decide to sign them
off. So it’s important to check the official
status of a treaty before attempting to take
advantage of them. treaty co-productions
are useful tools but don’t always lead to a
huge amount of economic activity. Primarily,
this is because of the eligibility criteria that
need to be met – which can make projects
less appealing to the commercial market.
Often, producers prefer the flexibility of a
co-production that operates outside treaty
arrangements, because this allows them to
make unrestricted decisions about editorial
content and rights.
In the case of the UK, there have been six
movie treaty co-productions in 2015: four
with Canada and two with New Zealand.
There was also one co-production that
came through the European Convention on
Cinematographic Co-production.
Co-productions:
Opportunity
or
Minefield?
negotiations could save a lot of grief and
expense later. Lawyers can seem like an
unnecessary expenditure until you need
them. But they can preside over a wide range
of crucial matters – such as what currency/
exchange rate the co-pro is operating under,
how copyright and insurance laws differ
across jurisdictions, auditing responsibilities,
and what constitutes legally binding
communication between two parties. This
latter point is especially important in the era
of email communication, where proving the
true intentions of the parties involved can run
into legal considerations such as hearsay and
authentification.
Poor communication is one of the biggest
contributors to failed co-pros and it’s
important to be meticulous about what you
mean and whether your partner understands
you. For English speakers, it is dangerous
to assume non-English speakers have
understood everything, even if you speak
and write clearly and they seem fluent. Polite,
frequent communiqués can ensure that there
isn’t a gulf in expectations between partners.
Lawyers will typically advise producers to
draw up detailed documents in advance that
spell out the allocation of responsibilities
under the co-pro and the plan in terms of
rights allocations and recoupment. The latter
is particularly important these days because
of the complexity of rights windowing.
This kind of pre-contractual effort (which
may take the form of a memorandum of
understanding) can help clarify the situation
in the event of a later dispute. In a similar
vein, it also makes sense to keep good notes
as the production progresses.
All of this can seem onerous, but it has to
be seen in the context of what may occur if
something goes wrong. A failure on the part of
a co-production partner can have a knock-
on effect on a whole host of pre-existing
producer commitments.
The good news, of course, is that a growing
number of producers have experience of
the co-pro model. The European Union, for
example, has supported around 1500 co-
productions since the inception of its MEDIA
(now Creative Europe) programme in 1988.
Any of the programme’s local offices can
provide guidance on how to put together a
co-production.
More generally, there has been a growing
number of co-pro successes in both film
and TV. For example, 12 Years A Slave, Mr
Turner and Tinker Tailor Soldier Spy have
been both commercial and creative hits,
belying the notion that co-productions end up
as unsatisfactory compromises. The more
co-pros of this calibre that come through, the
better the templates and processes to ensure
no one falls foul of the law.
Poor communication
is one of the biggest
contributors to pulled
co-productions.
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