Director’s Agreement
Your relationship with the director can be a blessing or a walk through a mine field. Do your homework and only consider directors known for completing their pictures on time and on budget. And, since you literally hand over the creative aspect of your picture to the director, choose one whose vision of the picture is the same as yours. You may fight your way through production, may go over budget, and may end up with a picture you did not envision if you hire the wrong director.
You will have to become a Directors Guild of America (“DGA”) signatory if the director is a DGA member. Turn in the DGA Signatory Package in to the DGA at the start of pre pre-production. Note that delays in submitting the Signatory Package may stall the commencement of principal photography because the DGA members cannot work on your picture until the DGA approves the production company’s signatory status. Make sure you budget for the director’s salary and the P&H contribution, penalties, and reserves required by the DGA. You will have to do the same for the other DGA signatories working on your picture.
The director’s services are divided into four stages: (1) pre-pre-production is when the director rewrites the screenplay and prepares the production schedule; (2) pre-production is the phase when the director starts casting, hiring her team, and location scouting; (3) production/principal photography is when the picture is filmed; and (4) post production is the last stage of production, when the picture is edited, the soundtrack is created, music is licensed, and the film is completed. You engage the director to work on the picture from the pre-pre-production phase through post production.
Engagement
The Director’s Agreement will be between the production company and the director or the director’s loan out company. The Director’s Agreement may state that the director’s services are on a non-exclusive basis during the Writing and Casting Periods, but exclusive during pre-production, principal photography, and post production.
Director’s Obligations
Each of the director’s responsibilities and a timetable are specified in Director’s Work-For-Hire Agreement (“Director’s Agreement”). The director will be bound to deliver a picture that does not fall short of or exceed the specified running time and a specific MPAA rating. The director will have to agree to perform those services and to deliver the elements of the picture as per industry standards. The Director’s Agreement will also contain a “performance standards” clause, which are the guidelines for how the production company expects the director to comport himself; e.g., that the director must be punctual and adhere to the production schedule and production budget, must cooperate with the production company’s instructions and directions, must collaborate with the crew and talent, must render her services in an artistic and conscientious manner to the best of the director’s abilities, etc.
Compensation
The director’s agent may require that you make a pay-or-play offer for the director’s services if the director is established and has a busy schedule. I suggest you steer clear of this type of offer until you have secured your financing because you will owe the pay-or-play offer regardless of whether the picture is ever produced. You may be able to avoid the pay-or-play if the director also produces the picture.
The director’s compensation package will include both fixed and contingent compensation. The director’s fixed compensation is a function of the production budget plus his track record in the industry. Fixed compensation is paid in installments throughout the term of director’s services. How much profit participation/contingent compensation you offer the director will depend on his track record and whether the fixed compensation is fair or below industry standards: the range is 5% to 10% of the picture’s net profits. Do not offer or agree to pay the director profit participation based on a gross definition unless the director previously received it on a studio picture and you secure permission from the picture’s financier. You may also offer the director deferred compensation and a Box Office Bonus and/or Nomination/Award.
Approvals
Subject to the production budget, directors are generally afforded at least the right of meaningful consultation in regards to the screenplay, cast, and the following hires: Director of Photography, Cameraman, Unit Production Manager, Production Designer, Costume Designer, Film Editor, Sound Engineer, Sound Editors, Lighting Designer, Special Effects Chief, composer, and Music Editor. The DGA only conveys the right of consultation on the First Assistant Director and Second Unit Director.
It is the rare director that has final cutting authority on his picture. “Final cutting authority” precludes the production company from re-editing the director’s cut of the picture—only the director may make changes. You should not grant final cutting authority to the director unless you are producing the picture with a director who is consistently afforded this right and have cleared it with the picture’s financier.
Representations and Warranties
The director will have to represent and warrant that everything created by him for the picture is original to him and, furthermore, that his material does not defame or infringe the copyright or the right of privacy of any third party. The director will also represent and warrant that he has the capacity and ability to enter into the Director’s Agreement, and that he has not entered, and will not enter into, a conflicting agreement that would preclude him from rendering the services he is agreeing to perform. The director will have to agree to indemnify and hold the production company harmless from any monetary losses and legal fees caused by breach of his representations and warranties. The production company will provide the director with a reverse indemnity clause whereby the production company will indemnify and hold the director harmless from financial liability and losses (including reasonable legal fees and costs) related to changes made by the production company to the director’s cut, or any matter arising in connection with production company’s production and distribution of the picture.
Travel
You will have to provide the director with airfare, accommodations, and a per diem if the production requires that the director travel more than 50 miles from her residence. I advise my client to offer the director airfare and accommodations that are at least as good as that of the producers. Please refer to the DGA Basic Agreement for the specifics regarding travel, accommodations, and per diems for DGA members.
Insurance
The production may want to purchase the equivalent of Keyman Insurance (a life insurance policy) on behalf of the director. The director may have to submit to a medical exam. The production may want to terminate the director if he does not qualify for the insurance. The director may want the right to obtain and pay for his own policy for the benefit of the production company. The director will want to be added as an additional named insured to the production company’s general liability and E&O insurance policies.
