Production Expenditures (Entertainment Law) Law and Legal Definition

Production expenditures generally mean the cumulative amount of direct and indirect costs incurred in the production of a product. In entertainment law, production expenditures are referred to the total expenses incurred in the production of a film and the like. Preproduction, production and post production expenditures are included in the production expenditures.

The following is an example of a state statute (Alabama) defining the term. The expenditures that may be incurred under different heads are elaborated in the statute. Pursuant to Code of Ala. § 41-7A-42:

a. The term includes preproduction, production, and postproduction expenditures incurred in the State of Alabama that are directly used in a state-certified production, including, but not limited to, the following: Set construction and operation, wardrobe, makeup, set accessories, and related services; costs associated with photography and sound synchronization, lighting, and related services and materials; editing and related services; rental of facilities and equipment; leasing of vehicles; costs of food and lodging; cost of catering; digital or tape editing, film processing, transfer of film to tape or digital format; transfer direct to DVD, cable, or satellite for distribution; sound mixing, special and visual effects including duplication, film processing digital, DVD, music composition, and satellite distribution; total aggregate payroll; music; airfare; insurance costs of bonding; or other similar production expenditures as determined by rule or regulation.

b. The term includes financial contributions or educational or workforce development in partnership with related educational institutions, or local industry organizations, or both, contributed toward the furtherance of the local entertainment media industries.

c. The term does not include postproduction expenditures for marketing or any amounts that are paid to persons or entities as a result of their participation in profits from the exploitation of a motion picture production.