Tips on Negotiating a Broadcast Deal

[planet e]

How much can I expect to ask for a half-hour state-wide sports show? I've done some broadcast work, but nothing like a regular series, only one-time events. How much can I expect to be paid? What can I ask for (assuming that you get what you negotiate...that's a given....but what is a reasonable ballpark figure for a production like this)? This would be run n gun newsmagazine style, not in-studio. And who pays? Does the broadcaster pay? Does my partner (whose idea this is...) find commercials to fund this? (He's never done this before either, but he is well-connected in the extreme....)

Any feedback is appreciated. This would be a great project for my RED, especially because we will also be able to build a most amazing stock sports footage library in 4K, in addition.....there's a lot of possibilities to monetize this in a number of ways, but I need an education, and the offer caught me a bit off guard....I need some info before next week!

[GlennChan]

In Canada (which is a different market!!), producer's fees are typically 10% of B&C (below the line costs). Financing rules typically cap the producer's fees at 10%. If you are a first-time independent producer, you might earn less than that.
A- The broadcaster might want to make you team up with an experienced producer/production company. You might split the money 50/50, but you would be doing most of the work and they would be guiding you.
B- The truly evil broadcasters might try to make you earn less than 10%. You can defer your fees to help finance the program; the Canadian funding agencies sometimes have rules to not let this happen. In the US, I don't think these restrictions apply and the broadcaster might try to pay you nothing (e.g. this is the case with the first season of "The Ultimate Fighter"?).
C- They might try to get more rights to your program... e.g. internet / new media rights (e.g. ipod video). Which otherwise you might be able to make some money off of... e.g. if your show's official website were in your control, you might be able to make some money advertising merchandise. Something like this will vary depending on what the broadcaster wants and what the government rules/laws are.

On lower-budget productions your producer's fees would be higher (20%-30%).


And who pays? Does the broadcaster pay? Does my partner (whose idea this is...) find commercials to fund this? (He's never done this before either, but he is well-connected in the extreme....)

To finance your show, for a US production, you might look at:
A- Broadcast pre-sales. The broadcaster will promise to pay you some amount of money to produce the show.
B- Foreign pre-sales. Usually they pay a few to several percent of the overall financing... though you gotta do some research here as to what broadcasters pay.
C- Sponsorship. You find a company (or multiple companies) that are interested in sponsoring your show. They don't know how many people will watch your show; however, by putting their money in beforehand, you can tweak the show around to their needs.
D- Airtime. (This likely won't apply.) You can do a first-run syndication... sell your show to a number of local network affiliates around the US. In exchange, they will give you some airtime for commercials. You need to clear a certain % of markets so that your airtime has a national reach. You can then pre-sell this airtime to an ad agency.
E- Distribution advance. Distribution companies try to sell your show to different markets. They can give you advance to finance your show, which can be a good thing. However, you likely won't see any money beyond the advance because they play accounting games.
F- Merchandise advance (e.g. DVDs). You can get an advance on merchandising/licensing rights. I don't think this is common.
G- Tax credits. Some US states now offer tax credits or other financial incentives. Download their guidelines, read em, and talk to their office if need be. They have rules you need to pay attention to.
H- Producer's deferral / deficit financing. You basically pay for some of the show yourself. You should really avoid this unless you know for sure that you can make a lot of money in the long run. One case you would do this is if your network dropped your show before you had enough episodes to syndicate it (for strip syndication). You pay for enough episodes to reach syndication and then make your money off syndication. That situation doesn't apply to you.

Where you get paid:
A % of your production budget will be producer's fees, and this will go towards your production company's salaries (e.g. you might need to include a line producer's salary in there), your overhead, etc.

2- So you need to figure out how much money your show costs to produce. I have no idea what a typical sports show costs.
That's how much financing you need to raise. Depending on how much financing you can get / if financing sources fall through, you might have a plan B budget.
A low budget isn't necessarily a good thing (e.g. you can make less money; broadcasters prefer to buy high-quality shows).

Financing-wise, you'd probably look at:
1- A broadcast pre-sale. Is your show geared towards a national audience or a local/state-wise audience?
2- Sponsorship definitely.
3- Tax credits or funding agencies if they are available for your state.


-- What camera you use might be pretty irrelevant to the people you talk to for financing. You need to figure out what their needs are, and how you would meet them. If it's a broadcaster, they want shows that fit with their target demographic. Their income comes from companies who pay for commercials; these companies are willing to pay more to target particular audiences. e.g. If you sell detergent, the best demographic is women who are old enough to have children.

[planet e]

glenn chan to the rescue! thank you hugely. this gives me a lot of information to chew on before we get together next week. Much appreciated.

any others? i can use all the info that i can lay hands on....

[S. Um]

That's great advice, Glenn!

Here are a few more things for you to consider. If possible, you should try to figure out how much the broadcaster can earn from your show through commercial sales or other fees. Then you'll have a better idea of what they can afford to pay. Also, if you think that your show can have a life in syndication after the first run (especially on the international market), then you might want to retain the syndication rights. Many shows don't make money on the first run. (At least according to the Hollywood accounting method).

You might also want to give some more information about your situation. Glenn gave you a lot of options, but you can see that partnering with a broadcaster is a lot different from syndicating a show.

[GlennChan]

To clear some things up...
The broadcaster will usually pay for a broadcast license... the (usually exclusive) right to broadcast the program in a particular territory/market. This is a slice of the overall rights that the producer/production company owns.

The five major networks/conglomerates I believe will usually want to own all the rights to the show, since the conglomerate has its own distribution company. They fully finance their own shows and distribute their own shows (as in, sell their own shows to foreign broadcasters).

So if you produce a show, you can sell it to other countries and territories. It's good if you can sell it to as many broadcasters as possible (either through pre-sales, or after you've produced the show) since most of that is profit. But you need salesmanship to do that, and your show should ideally be good. Distribution companies specialize in that. They will have expenses advertising their show, paying a PR company (or having inhouse PR), and traveling to trade conferences (e.g. MIP; there are many others). Some distribution companies specialize in particular territories, since needs are different between different markets (cultural differences, government regulations, etc.).

2- As far as syndication goes (and the difference between strip and weekly syndication), wikipedia has some information on it.
http://en.wikipedia.org/wiki/Television_syndication

You need a certain minimum # of episodes to do strip syndication (can't remember if it's 65); strip syndication is hugely profitable. Some companies will go into deficit just to reach the 65 episode mark... hence this is why some shows don't make money on the first run.

Syndication probably doesn't apply in your case.