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Shaudi is a Seattle-based musician, theatre artist, writer and social media marketing specialist. She holds degrees from Berklee College of Music and the University of Washington School of Drama.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
Let’s explore a few scenarios that might lead you to dissolve your co-production. These situations can arise at any stage of a project’s life cycle.
If you and your producing partner have major artistic disagreements—whether over script changes, casting, the final edit, or the project’s overall direction—dissolving the partnership may be the best path forward.
When creative differences significantly threaten the quality or marketability of the project, it may be time to consider parting ways.
Financial challenges can put significant strain on a co-production, and sometimes dissolution is the solution. Budget overruns or insufficient funding to complete the project may require a reassessment of your co-production. Unequal financial contributions or disputes over revenue-sharing agreements can also cause tension between partners, making it difficult to move forward collaboratively.
Legal and contractual disputes are among the most common reasons co-productions dissolve, and there are quite a few high-profile examples of this type of conflict leading to a partnership’s end.
If one party breaches the contract—for example, by failing to meet financial obligations, missing key deadlines, or not completing deliverables—it can erode trust and make moving forward together untenable.
Conflicts over intellectual property (IP) ownership can also create significant roadblocks for a project, particularly if there is any ambiguity over who owns key elements. Disagreements over rights to distribute, license, or monetize content can also stall a project indefinitely.
If mediation or arbitration are not possible or effective, dissolution of the co-production may be required.
Even when all parties align on the creative vision and contractual terms, production challenges can still derail a co-production.
Logistical issues, such as filming delays, setbacks with locations, or scheduling conflicts can lead to stress on a project’s budget. Unexpected changes in leadership or personnel within one of the co-production entities can also be destabilizing, as can poor management that leads to inefficiencies, lack of organization, or insufficient budget oversight.
The entertainment market can be mercurial, and unanticipated changes in the industry can become cause for ending a co-production.
A shift in the market that affects demand might suddenly render a project commercially unviable. There might be regulatory or policy changes at a governmental level that affect the feasibility of international co-productions. Or there might be changes to priorities on a studio or network level that lead to a loss of support and/or funding for a project.
Sometimes, conflicts at an interpersonal level can affect the entire project.
This can include situations like a loss of trust between the collaborating parties or internal conflicts within one of the production companies. It can also include broader issues, like an incompatibility of work cultures or decision-making styles.
Even if your project hasn’t been affected by any of the above situations, a co-production can be disrupted by external events outside of anyone’s control.
Political instability or sudden changes in legal restrictions can create significant obstacles when it comes to international collaborations. This could include changes in visa policies, trade regulations, or sanctions. Force majeure events like pandemics, natural disasters, or widespread industry strikes can also bring productions to a halt, and it’s not always possible to shift gears or pause indefinitely. The loss of a key figure, such as a director, producer, or lead actor, can also cause project viability concerns leading to dissolution.
The consequences of dissolving a co-production largely depend on the circumstances that led to the decision. It’s crucial to carefully consider all aspects of the situation before proceeding with the dissolution and to have a clear plan in place for next steps.
Dissolving a co-production comes with significant legal implications that need to be thoughtfully assessed in order to avoid ongoing disputes.
Together with your legal team, review the original co-production agreement carefully to understand the termination clauses, exit strategies, and legal requirements it outlines. You can also reference this document to help you understand the situation from an IP rights standpoint, including who retains ownership of any work produced so far (for example, scripts, footage and creative assets).
You’ll also need to assess your third-party agreements with stakeholders outside of the co-production, including commitments with distributors, talent, unions, financiers, or other entities. As you assess your internal and third-party contracts, identify whether any potential disagreements will require potential arbitration or mediation, and consider the associated resources that will be required.
You’ll need to evaluate the financial implications involved with dissolving your co-production.
One of the most time-sensitive factors is looking at debt and liabilities. Your team will need to identify any outstanding expenses, loans, and financial commitments and make a plan for how to address them. Revenue sharing also needs to be addressed, and decisions made around how any profits, advances, or future revenues from the project will be divided.
Tax implications are another crucial area to consider: address potential liabilities or benefits related to the dissolution of the co-production, and enlist the help of a tax professional to ensure compliance and risk mitigation for everyone involved.
Lastly, discuss any compensation or payouts needed. Depending on the relative investments of each party into the project, payments, buyouts, or reimbursements may be necessary. Make sure all parties have clear documentation of any transactions related to the dissolution to prevent misunderstandings.
Evaluate how the dissolution will affect your company's relationships with people related to the project (including investors and talent) and with the industry more generally. Make decisions about whether one party will continue the project, or if it will be completely shelved.
Finally, consider alternative collaboration models. Could it be beneficial to modify the partnership instead of dissolving it completely? If the two parties can agree on new terms for the partnership that satisfy concerns or mitigate circumstances, this can minimize negative impacts on the parties and the project.
A co-production has many moving parts, and part of responsibly dissolving one is sorting out the logistics.
You’ll need to divide assets, including determining how both tangible (equipment, footage, sets) and intangible (trademarks) assets will be split. You’ll also need to prepare to notify stakeholders, including financiers, crew, talent and distribution partners, of the dissolution.
Finally, consider how dissolving the co-production could impact future collaboration opportunities between the parties. Assess whether the parties might work together on future projects, and if so, how to structure the dissolution in a way that leaves the door open for that possibility.
Here’s a quick breakdown of the various sections of an Agreement to Dissolve Co-Production Agreement document.
The document should state that all parties voluntarily agree to dissolve the co-production, and that their only remaining obligations and commitments to each other are those outlined in the agreement.
The document should clearly outline the distribution of assets—such as footage, intellectual property rights, and revenues—as well as liabilities, including debts, unpaid expenses, and other pending obligations.
This section defines the ownership of both completed and unfinished work, including copyrights, trademarks, and distribution rights.
The agreement should lay out the details on any financial compensation owed between parties, any applicable revenue sharing, and any outstanding financial obligations.
It’s essential to include clauses to prevent parties from disclosing confidential project details or any privileged information about the other party. This helps prevent parties from making negative statements that could harm the reputations of those involved.
This section establishes how contracts with third parties—including vendors, distributors, and talent—will be handled.
The agreement should include language that outlines options for handling any disputes, such as through arbitration, mediation, or legal proceedings. It should also stipulate who will be responsible for any related attorneys’ fees.
Finally, the document should specify the date that the co-production dissolution will take effect.
Please note that it’s important to involve an entertainment attorney to ensure the Agreement to Dissolve Co-Production Agreement is properly drafted and enforceable. An attorney can verify that the agreement includes all the language needed for your specific dissolution circumstances.
By taking the proper preparation steps with your team, you can approach your dissolution in an organized, considerate manner. Be sure to download our fully customizable Agreement to Dissolve Co-Production Agreement to get you started in the process.
For more free resources to boost your team’s efficiency, bookmark our template library. We’ve created this inventory of essential forms and documents to optimize your workflow as part of our commitment to serving as a force multiplier for production teams.
Ending a co-production is rarely an easy decision. You’ve invested time, effort, and resources into building a partnership, and deciding to dissolve it is likely not a choice you take lightly.
However, in certain situations, parting ways truly is the best—or only—option. When that happens, the way you handle the dissolution matters.
To help you navigate the process as smoothly as possible, we’ve put together a free, customizable template and a collection of practical tips.
Our Agreement to Dissolve Co-Production Agreement template is designed to be flexible, allowing you and your legal team to tailor it to your specific circumstances.
