Co-Development Agreement for Film and TV: A Producer's Complete Guide to Partnership Contracts
Are you ready to take your film or TV project to the next level but need a production partner? A co-development agreement might be exactly what you need. This essential entertainment law contract allows producers to collaborate on developing projects while protecting their rights and investments.
In this comprehensive guide, I'll walk you through everything you need to know about co-development agreements, from key terms to avoiding common pitfalls that could derail your project.
What is a Co-Development Agreement in Film, Streaming and TV?
A co-development agreement is a legal contract between two or more producers who want to collaborate on developing a film or television project. Unlike a full production agreement, this contract covers the development phase - from initial concept or script development through to the point where you're ready to begin production.
The producers might have come to the project at the same time. Or maybe one of the producers has optioned an idea and wants to continue working on that idea together with one or several other producers.
The ultimate goal? To convert your co-development agreement into a co-production agreement once your project is fully developed and ready for production.
Why Do Producers Use Co-Development Agreements?
Film and TV development can be expensive and time-consuming. It’s also risky and can be a bit of a lonely ride. By partnering with another producer, you can:
Share development costs and financial risks
Combine expertise and industry connections
Access different markets or financing sources
Leverage complementary skills and resources
The SMART Framework for Co-Development Agreements
When drafting your co-development agreement, use this SMART framework that I’ve developed to ensure you cover all essential elements:`
S – Scope of Work and Responsibilities
Define clear deliverables and responsibilities for each party. Your co-development agreement must specify exactly who is doing what, with whom, when, and how.
Key questions to address:
Are you hiring a screenwriter or any other third parties? Who's responsible for managing this relationship?
What about securing talent attachments or packaging elements? Who will be approaching agents? Or should you work with an experienced casting director?
Are there specific development milestones or deliverables that you will each agree on?
How will you handle decision-making processes? Will you make all decisions jointly or will there be some decisions that one of you will have the final say over?
Best practice: Create a detailed work breakdown structure that outlines each party's obligations, deadlines, and decision-making authority. It all boils down to: who is doing what, when, with whom, and how.
M - Money and Financial Arrangements
Address all financial aspects upfront to avoid disputes later. Money matters are often the most contentious part of any film development deal. (Or, to be honest, any film and TV deal anywhere, ever).
Essential financial considerations:
How much has each party already invested in the project?
When and how will these investments be recouped?
Who pays for ongoing development costs and in what proportions?
Will recoupment of any amounts incurred be paid as a first day payment out of the production business, or be payable from gross receipts (with a premium on top?), or (if you’re lucky…) out of net receipts?
What happens if expected returns don't materialise?
Example: If you've already spent £10,000 on script development, specify whether this will be recouped as a first day payment out of the production budget, or from the film's eventual profits, and in what priority position.
A – Assignment of Rights and Intellectual Property
Clearly define ownership of all intellectual property rights. This is arguably the most critical aspect of your co-development agreement.
Key IP considerations:
When will you set up an ‘SPV’ (special purpose vehicle) and when will all underlying rights be assigned or licensed to that company? Will each of you be a shareholder and company director of that company?
What underlying rights is each party bringing to the partnership? For example, has one of you optioned a book and how will you deal with those rights?
Who will own new material developed during the collaboration? This is particularly important if you will continue to develop rights before you set up an SPV - in that case, you could consider contractually agreeing to assign those rights to the SPV as soon as it’s set up.
What happens to jointly developed IP if the partnership ends? Will you give each other the option to buy out the other party if they want out? Or have you decided that you will work together, come what may?
How will you handle derivative works or additional storylines? Will you negotiate those future terms in good faith at some point in the future? Or are there certain terms that you want to already set in stone now?
Common mistake: Many producers assume they'll sort out rights "later" only to find themselves in complex disputes. Address this from day one.
R – Risk Allocation and Management
Plan for what could go wrong and who handles it. Risk allocation protects both parties from unforeseen circumstances.
Risk considerations include:
Third-party contract failures (writers, agents, other service providers) - what happens if a key party doesn’t deliver at all or on time? Contractually, you need to ensure that you can keep the rights, (almost) no matter what happens.
Payment obligations and liability for third-party claims - which entity is entering into payment obligations and can you ensure that that company has sufficient financial resources?
Market changes - the film, streaming and TV industry is constantly changing. Some years everyone wants one genre (and one genre only) and then suddenly the powers-that-be determine that the market has been oversaturated and the new big thing is something mildly different. You can mitigate this risk by having a slate of projects in development, rather than just concentrating on one.
Development setbacks - the writer you spent your entire development funds on fails to deliver a good script. The option expires and you need to fork out yet more money (that you don’t have) for an option extension that you hadn’t thought to include in the original contract, etc. Things happen and not everything can be foreseen, prevented or mitigated. How you and your co-development partners deal with these setbacks will determine the future of your professional relationship.
Key personnel becoming unavailable - I have seen deals fall apart because everything banked (literally) on one A lister being available. But what if that A-lister is suddenly contracted to shoot a new hip series in Morocco? Or what if that A-lister will only be on board if you let them co-write the script but you really don’t think that putting words on paper is their strong point?
Disputes between co-development partners - don’t get me started. And yes, it happens. That’s why having a solidly drafted contract is so important. The more you regulate in advance the less you have to try to sort out when it’s become hard(er) to talk.
T – Timelines and Termination
Set clear deadlines and exit strategies. Co-development agreements shouldn't drag on indefinitely.
Timeline considerations:
How long will the co-development phase last? (18 months? 2 years?)
Are there specific milestones that trigger reviews or renewals?
What notice period is required for termination?
What happens to rights, money, and obligations upon termination?
Best practice: Include review periods every 6-12 months to assess progress and decide whether to continue, modify, or terminate the agreement.
Key Takeaways
Co-development agreements are powerful tools for film, streaming and TV producers, but they require careful planning and clear documentation. By following the SMART framework - addressing Scope, Money, Assignment of rights, Risk, and Timelines - you'll create a solid foundation for successful collaboration.
The entertainment industry thrives on partnerships, but successful partnerships require clear agreements. Take the time to get your co-development agreement right, and you'll be well-positioned to bring your project to life with the right partner by your side.
Next Steps
Need help with your co-development agreement or other entertainment law matters? As an experienced entertainment lawyer, I can help you navigate the complexities of film and TV contracts to protect your interests and advance your projects.
Get in touch here to schedule a free call.
NB: I’m qualified to advise on matters of English (UK) law. If you need help on US law matters, I’m afraid I won’t be able to help you.