In a production company, the producer’s most important assets are the operating and advisory teams who take care of daily operations. Some considerations on completing these teams includes planning, evaluating, choosing employees and setting compensation amounts for those employees.

Putting Together the Production TeamCreating the Team

In order for a producer to meet the demands of the business, they should have a complete operating team. While some producers can work without the full team, it is important to have enough people to handle the day-to-day responsibilities. New production companies may have a small in-house team, but will also have outside support from a variety of professionals. These professionals may include an advertising agency, an attorney, a PR firm and sales representatives.

For any producer, these services are essential, but may cost too much to be provided as in-house executives. No matter where the professionals come from, having these professionals to support an independent production company will ensure the necessary functions for smooth operations.

Structuring the Company

Most production organizations in the United States are set up to be either limited liability companies (LLCs) or subchapter S corporations. These types of business structures provide the optimal amount of legal protection for the members, shareholders and principal players. The business entities in these structures are not taxed separately from the shareholders, which provides flexibility in many areas, including mergers and acquisitions. The most common structure for film companies is the LLC, but it is best to consult an attorney and an accountant before creating the legal entity for the company.

The entity created is owned by the members and shareholders. These are the people who establish the policies and procedures for the company, as well as appointing the officers and board of directors who oversee these policies. Members of the board typically do not have a hand in day-to-day operations, but they do meet annually to review a number of company issues including changes in policies, reviewing annual reports and considerations on capital restructuring.

Tiers within the Structure

A well-structured production company will have a three-tiered team. One tier will be composed of an advisory board; the second tier will include the operating teams and executive committee; and the last tier will be composed of the staff for the executive committee.

The Advisory Team

An advisory ream will include members of the entertainment industry who have already established themselves as professionals. Their counsel, advice and relationships within the industry are vital to establishing and growing the production company’s position in the industry. Their expertise also helps with creative focus and the ability for the company to broaden its reach. This expertise and influence in the entertainment industry is vital for newly established production entities.

The most common members of an advisory team for a production company may include attorneys, bank executives, public relations professionals, bond executives, sales executives and production specialists. These members may provide their typical paid professional services, but they all also serve as mentors for those in the company.

Advisory team members must have a passion for their niche as well as the drive to help guide new organizations, since many of the members will have little to no stake in the business side of the company. What will draw these professionals to serve the company will be a commitment to the ethics and previous achievements of the producer, the commitment to the type of projects created and the overall approach to production and distribution.

In order to choose the members of the advisory team, the production company must have a few industry professionals in mind, choose the top candidates for the positions and then present the goals and purpose of the company to these candidates.

The Executive Committee

The producer and key personnel compose the executive committee. The purpose of this committee is to make sure the objectives of the company are fulfilled. The committee meets on a weekly basis to review all of the aspects of the company they are responsible for including operating expenses and earnings. It is in these meetings where projections are revised based on the company’s progress.

The producer in the company also typically holds the title of CEO or president. In some cases, the producer holds both of these titles. The heads of each department are usually referred to as vice presidents. The producer leads the team in both the business side of the company and the creative side. The producer can choose to have an office appointed to being responsible for working with the department heads directly. This person may also hold additional titles within the company such as senior vice president or COO.

The Players

There are a number of vice president positions and each one has a specific duty. The development vice president is in charge of discovering and soliciting stories to green light. This vice president will also be in a manager position once the development is under the direction of the producer.

The global sales vice president works with the initial breakdown of sales for each project. They will also have the task of evaluating strategies, presales and the sale of rights to the company’s films.

The vice president for advertising and public relations works to establish and maintain the company’s brand on a global scale. This vice president and team works with distributors, home entertainment releases and global trade to get each picture its maximum exposure.

The vice president of business affairs works with the documentation needed to maintain all business transactions. The business affairs vice president works with the company’s attorney to establish documentation for negotiations in production, rights sales and distribution deals.

The vice president of finance will work closely with the company’s bottom line. They manage cash flow, taxes, accounting and reporting to various government agencies required.

An international sales or ancillary sales manager in the production company will be responsible for establishing the global value of each picture, negotiating for rights and working with pre-sales to the pictures. This sales manager may or may not work with U.S. based studios, depending on the structure of the company.

Finally, the operations director is the person who keeps everyone on task. The operations director holds all team players accountable for their part in the company to make sure projects are on time and on budget. The director will also prepare and submit daily, monthly and quarterly accounting reports.

The Development Organization Team

The development organization team may or may not be a separate entity from the production company, but still partially owned by the production company. However, this team should always maintain its own income and expense accounting. The development team has a similar structure to the company with a three-tier structure. The development team tracks time and money spent by the producer per project. The producer also holds the title of the development team’s development manager. The responsibilities of that title include all of the preparation and development for the production.

Team Optimization

The producer’s main responsibility when it comes to the teams is to set the pace, style and relationship dynamics with everyone working inside and outside of the core team. The producer’s success in this area will determine how well the team works together to achieve a steady stream of success. Good management will have a plan that the teams can refer to when working on a project. The main phases of a good plan include planning the project, executing the plans and evaluating the progress and course-correcting if needed. This three-phase plan helps each team member remain accountable and standardizes the process.

Discovering Team Players

Filling vacancies in an existing team structure is important to maintain the team’s success. To find the right person, a written description of the duties, accountabilities and compensation requirements should be created.

The executive and advisory teams will have a copy of this description and can seek the assistance of personnel agencies to help fill the vacancy. New production companies looking for the right person to fill various positions in the company will want to first bring on the advisory team to use their respective resources to find the best in the industry.

Compensation and Negotiation

The production company should set a complete budget before beginning any compensation negotiations. This will establish what the company can realistically afford to pay for the various vacant positions. After negotiations are completed, the company should offer a bit more money than agreed upon to establish good will with quality talent. It is also a good idea for the company to prepare for financial rewards through profit sharing when it comes to big successes.

It is important for both new and existing production companies to establish the structure of their business and creative functions to foster a driven, successful working environment. The structure of the company revolves around the producer, so it is the producer’s job to set the style and performance of team members to create an abundance of success.