Business of Film Quiz 2

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created 5 years ago by Olivia_Nasner
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Doug Barrett, Dahlia Thomas, Financing Productions, CRTC, Broadcast Agreements
updated 5 years ago by Olivia_Nasner
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1

Equity Investment

Pro rata and pari passu

- From Doug Barrets talk

When an Investor (broadcaster, funding agency or private individual) contribute to the budgeted cost of a program with the expectation of sharing in revenues earned by the program.

Investors are said to share PRO RATA AND PARI PASSu = rateably and by equal proportion

2

Licence Fee

an amount paid by a broadcaster for the right to air a program on terms structured in the licensing agreement

3

Licence Fee top up

The amount contributed by the Canada Media Fund to production costs once a broadcaster has paid the minimum required licence fee

4

Producer Deferral

An agreement by the producer to leave a portion of its fee in the production and supporting production costs. Once done, this contribution is treated as an investment and then recouped out of distribution revenues.

5

Distribution Advance

an amount contributed by a distubtror towards production costs and committed prior to production.

Distributor repays itself from distribution revenues derived from the territories over which it has acquired distribution rights before it share any proceeds with the producer.

The distributor also pays itself its fees and distribution expenses before paying the producer

6

Merchandising Advance

This type of advance is the same as a distribution advance but made with respect to Merchandising Rights which are generally negotiated separately from Distribution rights, and with a different party *unless that party is a major studio

7

Convergent Stream

Telefilm Canada

320 million

projects in television and digital media

funding through envelopes allocated to Canadian broadcasters

8

Experimental Stream

Telefilm Canada

40.5 million

digital content and application software thats innovative

Selective

9

Forms of funding include

license fee top ups - cash licence from broadcaster

Equity investments

repayable contributions that are paid directly to applicant producers

can't have more than 49% of funding in your overall budget

10

Eligibility requirements for Telefilm funding

1) project will be certified by CAVCO and has achieved 10/10 points as determined by the CMF using the CAVCO scale

2) all the underlying rights must be owned by Canadians

3) project must be shot in Canada

11

CRTC

Canadian radio television and telecommunications commission.

Canadas regulatory body.

Regulates and supervises Canadian broadcasting and telecommunication systems including TV, radio and telephone services

also manages public hearings

DO NOT REGULATE INTERNET

12

C Number

designated Canadian content number

apply to the CRTC to get one

13

C Number Qualifications

A) Project is Canadian, Canadian control - producer function is Canadian

B) the production earns a minimum of 6 points out of 10 based on the key creative function being performed by Canadians

C) a minimum of 75% of the productions services costs incurred to produce the production are paid to Canadians

D) at least 75% of the productions post production and laboratory costs are paid for services proved in Canada by Canadian companies

14

CRTC Point System

Director (2)

Screen Writer (2)

Everything else (1)

15

OFTTC

Ontario film and television tax credit

Refundable tax credit based upon eligible ontario labour expenditures

Harmonized with the Canadian film or Video production tax credit

- Jointly administered by the Ontario media corporation (OMDC)- an agency of the ministry of tourism culture and sport. Application made to them

16

OFTTC (ontario film and television tax credit) Eligibility

- ontario resident for tax 2 Calendar years prior to start of production

- 6 canadian content points

- shot in ontario

- 75% of total final costs on Ontario Expenditures

- tv minimum 30 min time slot

- agreement with an ontario based distributor or Canadian broadcaster to be shown in ontario within 2 years of completion

- is not in an excluded genre

17

Value of OFTTC

- 35% of the edible ontario labour expenditures

Incentive for first time producers: credit rate enhanced to 40% on the first 240,000$

Regional Bonus - 10%bonus if shot outside of GTA, Animated productions can count for this as well

18

Budget stages

1) preliminary

2) fine tuning

3) locked in

19

Deficit Financing

as a producer you will have to finance your production with funding from other investors, who will not recoup or have their investment returned to them immediately after the production is finished.

20

Reasons that account for investment in film and television

a) tax incentives

b) government agencies mandated with cultural agendas

c) private funds

d) broadcaster mandates to support Canadian production

21

Line by Line qualifiactions

In a budget

property rights of work

writers fee etc

development costs

fringe benefits - fees payable to unions and associations your using

22

Unit Publicity (section c)

Important category

- insist that a percentage of your budget be spent here

it not marked properly your project won't be seen

23

General Expenses (section C)

Important administrative costs we have looked at already

insurance, E &O, legal fees, accounting fees, bank fees

24

Cash Flow

A) a record of your expenditures by time VS speed at which you will be receiving revenue

B) draw downs- most investors, broadcasters do not give up cash up front but in instalments

25

Draw Down rules

a) execution of agreement

b) completion of a particular phase of proaction

c) deliver of a certain aspect of the production

26

Regulating Institutions (regulate what qualifies as Canadian Content)

CAVCO

CRTC

Telefilm

OMCD

27

CAVCO

Co administers tax credit programs with the CRA

Responsible for the administration of the CAVCO personnel number

28

CAVCO personnel number (CAVCO ID)

proof of citizenship or residency for producers and key creative personnel as required fro the Canadian Film or Video production tax credit (CPTC)

Necessary to qualify you as Canadian citizen when applying for tax credits C

29

Canadian film or Video Production Services tax credit (CPTC)

refund rate of 255

Administered with CAVCO

30

CAVCO issues the following..

Canadian film or video production certificate (similar to C number) (part A)

Certificate of completion (Part B)

Need both to indulge T2 income tax

31

Film or Video production services tax credit (PSTC)

- does not require that the production be Canadian content under CAVCO rules

designed for film and video productions employing Canadians, and the strengthen industry

16% of Canadian labour expenditures

32

Broadcaster attached =

a) raise money from other sources

b) access grants and funds

c) being to leverage support in other ways

33

Basic Broadcast Agreement Terms

Term

exhibition period

territory

exclusive or non exclusive

creative rights and credits

license fee

editing and dubbing

delivery materials

34

Pre sale or pre License Broadcast Agreement

- original programming

- more bargaining power, more money

- creator more power, can ask for more money

- up to 30% more of your budget on the high end

35

Acquisition Broadcast Agreement

bought after completed

36

Distributor

negotiate with realistic financial expectations

Enter into license agreements with broadcasters, without consulting you

Distributor can do international sales

37

Ancillary Rights

Publishing

Merchandizing

CD rom

Character licensing

Sound tracks

Formats

38

Gross Deal

- distributors commission comes off the top, before deductions

39

Net Deal

commission comes off after allowable costs are deducted

40

Distribution Advance

an advance against the producers share of sales revenues, fully recoupable

41

Promotion and Sales

Distributor usually pays for the costs of promoting and servicing sales, then recoups them from the distribution income

you can state what these "allowable costs" are in your agreement

42

My Big Fat Greek Wedding

Rent a system service deal

- financiers pay to distribute film

- all distributors share box office Gross (100% of film rental)

43

Standard Distribution Deal

some risk, structured with Producer Advance

IFC takes 30% distribution fee

bonus given for box office thresholds (seen in US)

44

Costs off the Top Deal

No distribution fees (less common)

Distributor advances print and advertising, recoups costs from first proceeds of film rental

Remained split 50/50 between distributor and producer

45

Choosing the Right Independent Distributor

- right marketing approach

- maintaining creative relationships with filmmakers

tracking projects that are under studio radar

grass roots marketing ingenuity