Producers in crisis over Omnicom plot.(Brief article)

The future of UK production companies has been called into question after an attempt by Omnicom to rewrite contractual terms between agencies and production businesses.

The group is trying to prevent its agencies from paying production houses before the agency receives payment from a client. Industry bodies say the move could jeopardise the business model of production houses.

The initiative, which Omnicom is also trying to introduce in the US, would also implement a form of sequential liability whereby production companies bear liability if a client reneges on its contract with an agency.

Under the current standard trading terms, agreed by ISBA, the Advertising Producers Association and the IPA, production companies are paid around 50 per cent of their fee upfront with the final 50 per cent paid within 28 days of delivery of a film, and agencies bear the costs should a client withhold payment.

It is understood that as ...