Legal Question in Entertainment Law in California

Re: 2 Production Companies working on one Project?

Generally, this is done by forming a joint venture or profit sharing relationship with each other. This can formally be achieved by forming a limited liability company (many entertainment company relationships do this to isolate the liability). The main deal points to determine are what is each side contributing to the relationship and the percentage of ownership and/or profit sharing each company will receive.

Re: 2 Production Companies working on one Project?

I structure lots of these types of deals. Generally, there are two models. First, you could do a Co-Production (essentially the Joint Venture discussed by Mr. Jefferson), which essentially makes the two companies Partners for the single production. This carries risk and potential reward for both companies.

Alternatively, this could be done under a 'Production Services' agreement, whereby the producing company 'hires' the services company to perform certain specified tasks, etc, for a fee, (which can include a back-end participation), but ultimately, when the film is delivered, it belongs primarily to the producing company. This structure is less risky for the services company, but also has a slightly less advantageous upside.

There are a few other approaches available, but there's no substitute for a full consultation with an attorney. At my office, initial consultation is always free.