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Chapter 4: Connecting the Dots: Breakdowns, Budgets, and Finance

I. Break Down The Idea

  • Making a budget for your project requires you to:

    • Examine each aspect of your project

    • Give it a face

    • Assign its job descriptions and a set of parameters

  • As a guideline for the budgeting process, you can:

    • Refer to the comprehensive budget template

    • Research budgeting software programs like:

      • Movie Magic Budgeting

      • EP (Entertainment Partners)

  • The best budgets emerge from:

    • Solid research

    • Cost comparisons

    • Studying other producers’ budgets

    • Talking to people with budgeting experience

    • Practice

Understand the Big picture of Production:

  • The producer may work with:

    • A small two-man crew

    • A large team with other producers

    • Writers

    • Director

    • Actors and talent

    • A substantial production crew

    • Heads of key departments

    • Lawyers

    • Insurance agents

    • Accountants

    • Public relations

    • Representatives

Create a Production Book:

  • An essential tool in that organization process is called a production book. Producers generally keep a separate production book for each project, a three-ring loose-leaf binder with tab dividers for each section. It includes most, if not all, of the following categories:

    • A contact list including names and phone numbers for producers, talent, crew members, director, catering, vendors, and other essential contact information

    • The script and all versions and revisions

    • Daily shot lists

    • Shooting schedules and call sheets

    • Production reports after the project wrap up

    • Scene breakdowns

    • Storyboards

    • Props and art breakdowns

    • Wardrobe, hair, and makeup breakdown

    • Transportation details

    • Meals and craft service plans

    • Location agreements and shooting permits

    • Releases and clearances for talent, locations, artwork, etc.

    • Deal memos with the crew

    • Insurance information

    • Equipment list

    • Miscellaneous

    • Budget

    • Inventory:

      • Video stock

      • Props

      • Wardrobe

Break Down Your Script:

  • The script is the blueprint for your budget

  • Allow yourself or your writer(s) adequate time to develop your script. You don’t want to frantically rewrite it on set when time and money are at a premium

  • Most scripts must get final approval from development executives or clients, which can result in additional changes to the script or overall project restructure. The time required for the writer(s) to complete any rewrites is an added budget item. Most scripts require some tweaking and several revisions

  • Include money in your budget to cover an outline, a treatment, and at least two rewrites before you start shooting

The Breakdown:

  • Every script is a compilation of scenes, and each scene has certain requirements that cost money. A breakdown sheet helps the production staff to understand what is needed in each scene

  • The breakdown includes any or all of the following categories:

    • The scene number and name

    • The date of the breakdown sheet

    • The project title

    • The page number of the script

    • Day or night

    • Additional production notes

    • Location:

      • On set

      • A real location

    • Interior or exterior:

      • Shooting inside

      • Shooting outside

    • Brief scene description:

      • One or two lines

    • Cast:

      • With speaking parts

    • Minors:

      • Often require tutors and overtime

    • Extras:

      • No speaking parts

      • Either in the scene or in the background

    • Special effects:

    • This ranges from explosions to blood packs to extra lighting

    • Props:

      • Anything handled by a character in the scene

    • Set dressing:

      • Items on the set not handled by the character

    • Wardrobe:

      • Any details that are pertinent to that scene

    • Makeup and hair:

      • Wounds

      • Aging

      • Wigs

      • Facial hair

    • Extra equipment:

      • Jibs

      • Cranes

      • A dolly

      • Steadicams

    • Stunts:

    • Falls

    • Fights

    • Explosions requiring a stunt person and stunt coordinator

    • Vehicles:

      • Picture cars

      • Other vehicles used by characters in the scene

    • Animals:

      • Any animal that appears in the scene comes with a trainer, or wrangler, who takes charge of the animal during production

    • Sound effects and music:

      • Anything played back on set

Storyboarding:

  • Storyboards are not necessary for each project, but they can be useful organizational tools

  • Storyboards are simple, cartoon-like sketches of each scene in a script. They’ve numbered boxes with a drawing inside; each box refers to a scene or shot number from the script

  • Usually, storyboards contain minimal black-and-white line drawings, although they can be in full-color photography, or even animated

  • For unscripted programs, storyboards can help the production team to visualize and structure a location so that it looks natural but includes optional spots to place cameras or microphones

  • Each sketch is a rough portrait of the scene being shot:

    • The location of one character in relation to another

    • The framing

    • The surroundings

    • The colors or lighting in a scene

Cross-Boarding:

  • The producer shoots scenes, consecutively, from two or three different episodes that all take place on the same set or location

  • It is much more cost-effective to keep the crew in place and the set dressed and lit so that all three scenes can be shot in the one location

II. Budget The Idea

  • Larger productions tend to have budgets extensive enough to require budgeting software and spreadsheets; smaller productions might need only a page or two to keep track of their costs

  • Budget categories:

    • Preproduction

    • Production

    • Postproduction

  • Budget sections:

    • Above-the-line

    • Below-the-line

  • Producers factor in indirect costs, like:

    • Legal fees

    • Accounting service

    • Insurance premiums

    • Taxes

    • The contingency that covers unforeseen costs

Budgeting Costs: Two-Part versus Three-Part Formats:

  • Most television and new media producers find it easier to look at their costs by dividing their budget items into three major categories:

Preproduction:

  • Costs tend to be lower and more controllable in this first stage of a project

  • Budget items usually include:

    • The producer’s fee for either writing or working with a writer

    • Taking meetings

    • Hiring crews

    • Casting actors or talent

    • Coordinating stunts

    • Planning the shooting schedule

    • Booking hotels, meals, and travel

    • Planning the project’s overall development

  • Budgeting for a writer can be done in several ways:

    • A writer might be paid in stages, such as 30 percent of the agreed-upon fee after signing a contract, 30 percent with the first draft, and the remaining 40 percent paid after final acceptance

    • The producer and writer might agree on a flat fee that covers all aspects:

      • Developing the idea

      • Writing the script

      • Any revisions

  • Other preproduction costs can include:

    • Designing storyboards

    • Consultant fees

    • Casting fees

    • Space for talent rehearsals

    • Production staff

    • Location scouting

    • Messengers and shipping

    • Meetings

    • Meals

  • Any sets must be:

    • Planned

    • Constructed

    • Painted

    • Moved

Production:

  • When the producer has thoroughly mapped out everything needed to shoot the project, the production phase can be the quickest and least problematic part of the project:

    • The script has been researched and finalized

    • The crew and equipment have been hired

    • The talent has been cast

    • The key department heads have submitted their department’s requirements, with estimated costs for production,

    • Contingency money has been put aside

    • Details have been finalized so that the actual shoot can begin

Postproduction:

  • This is traditionally the most challenging area for producers to accurately budget

  • There are many factors in the postproduction process to consider:

    • The skills and style of the editor

    • Many hours of footage need to be:

      • Screened

      • Logged

      • Loaded into the editing system

    • The costs for the:

      • Editor

      • Editing facility

      • The audio mixer

      • The audio facility

      • Graphics

      • Artwork

      • Animations

      • Text

      • Captioning

      • Credits

      • Music

      • Narration

      • Voice-over

      • Sound effects

      • Sound design

      • Foreign language translation

Two-Part Budgets:

  • In some television projects, commercials, and more elaborate, big-budget television series or specials, the producer might use a format that’s similar to a feature film budget. This format divides the production costs into two areas:

Above-the-line:

  • These costs are project-specific fees or salaries paid to the creative personnel, depending on multiple factors including:

    • Union affiliation

    • Time required

    • Special perks

    • Star power

  • Above-the-line fees are paid in several ways:

    • Union fees:

      • If the writer is a member of the Writers Guild of America (WGA), that fee is stated in the WGA contract with the producer

      • The same applies to a director who’s a member of the Directors Guild of America (DGA) and to a Screen Actors Guild (SAG) actor

    • Daily or weekly fees:

      • The personnel agrees to a fee to be paid daily or weekly

    • Flat fees:

      • Often a producer agrees to pay a fee to an above-the-line creative in installments: one-third upon signing a contract or deal memo, one-third on completion of principal photography, and the final one-third when the project is completed

    • Producer fee:

      • Because the producer is usually the person deciding how fees are paid, these fees can vary

      • The producer(s) generally takes the project from start to finish and works longer than almost everyone involved

      • Some producers take daily or weekly fees, while others work on a flat per-project fee

      • A producer might also defer payment until the project is sold, in exchange for a bigger fee at the back end of the deal

      • More experienced, savvy producers can structure their contracts to earn extra profits or bonuses in addition to their salaries if the project succeeds

Below-the-line:

  • Below-the-line personnel can be:

    • Union

    • Non-union

  • There are several unions that cover professionals such as:

    • Writers

    • Directors

    • Actors

    • Camera operators

    • Audio engineers

    • Grips and gaffers

    • Makeup and hair

    • Wardrobe

  • Membership in a union doesn’t necessarily imply quality or experience, nor does it mean the opposite. It does mean that union members are protected by strict rules that include:

    • Hours worked

    • Overtime

    • Meals and breaks

    • Benefits

    • Pension and welfare (P&W)

  • These costs tend to be more predictable, covering the:

    • Technical crew and their equipment

    • Resources

    • Insurance

Costs: Estimated versus Actual:

  • In addition to using one of the two previous formats, the producer(s) keeps a separate budget that shows at a glance two aspects of spending the project’s money:

    • Estimated costs:

      • What the producer thinks a budget item will cost

    • Actual costs:

      • What the item actually ends up costing

    • Many budgets add a third column to the right of the first two that lists the “plus or minus” amounts:

      • This column provides an instant readout on the running costs and lets the producer know if the budget is on track or if adjustments need to be made to keep costs in line with the budget

Estimated Budget Costs:

  • If you need to create a rough budget estimate, consider one of the following options:

    • Ask about the client’s financing parameters:

    • Most are experienced enough in the business and have an amount in mind that they’re willing to spend

    • Give the buyer choices:

      • Plan A budget that reflects everything on your production wish list

      • Plan B budget that covers fewer extra effects, locations, and other items that add to a budget

    • The buyer may be willing to give you a small development fee for:

      • Expanding your script

      • Research

      • Location scouting

      • Doing a script breakdown

    • Don’t be afraid of walking away:

      • If, for example, a buyer won’t budge from a $200,000 offer and you’re quite sure that your budget of $300,000 is realistic and professional, you can politely refuse their offer and look elsewhere

      • The skills of negotiation can be developed over time; meanwhile, an agent or entertainment lawyer can be a tremendous asset in deal-making

Researching Budgets Costs:

  • Almost every item included in a budget can have a low-to-high price range

  • The producer must:

    • Make phone calls

    • Research online sources

    • Compare prices

    • Talk to other producers

    • Keep up with the industry trends

Creating a Working Budget:

  • When you break down your script or your treatment to determine specific factors that contribute to a realistic budget, look for these components:

    • The number of preproduction days. To develop the script:

      • Scout locations

      • Interview/hire talent and crew

    • The number of shooting days. On set and/or on the location:

      • What sets are needed

      • What locations and where

      • Your shooting ratio

      • Which talent and crew are working on what days and their costs

      • Equipment rental charges

    • The number of postproduction days:

      • Log and screen footage

      • Notes on editing script

      • Plan and complete graphics

      • Overall sound design

      • Edit

      • The final mix

Budget templates:

  • An effective budget outlines each and every category involved in every phase of the project

  • Each category in the budget is known as a budget line and each item has its own line on that budget. There’s a line for:

    • The producer

    • Props

    • Equipment rental

    • Every item

  • There is no one standard budget form that’s used by all producers but there are several programs that make it easier to budget:

    • EP Budgeting

    • PointZero

    • QuickBooks

    • Movie Magic Budgeting

The Top Sheet:

  • Most longer-form budgets begin with a top sheet

  • It’s a brief summary of the project’s costs in each department

  • It gives the producer a valuable overview of the budget at a glance

The Detailed Budget:

  • Each detail in a script or project translates into a cost that’s part of a key budget category, account, or account line

  • Budgets tend to be confidential and seldom distributed to anyone but the producer, director, line producer, and/or production manager

  • A detailed budget varies in length, depending on the project

  • These accounts include all the departments and all their expenses:

    • Salaries

    • Material

    • Equipment

    • Overtime

Budget Lines and Categories:

  • Producers:

    • Each project has at least one producer with specific responsibilities

    • The primary producer is usually at the helm of the project from day one and gets paid until the project is completed

  • Screenplay and/or story rights:

    • If the script isn’t the producer’s original script, then they pay for the right to use someone else’s:

      • Story

      • Script

      • Article

      • Book

      • Idea

  • Writer(s):

    • Regardless of the source of the idea, a writer or team of writers is usually hired to:

      • Flesh out the idea

      • Refine an existing script

  • Director:

    • If you’re producing an actor-heavy dramatic project, you may hire a director, who has the:

      • Experience

      • Vision

      • Patience

      • Ability to work fast

  • Casting Directors and expenses:

    • Casting involves both principals and extras

    • Expenses involve:

      • Casting space

      • Taping

      • Equipment

      • Meals

      • PAs

  • Actors:

    • Agency fees are part of the budget to consider

    • Minors require extra fees, including:

      • On-set tutors

      • Overtime

      • Other perks

  • Talent perks:

    • Stars often demand extra benefits such as:

      • Personal makeup artist

      • Wardrobe stylist

      • Physical trainer

      • Special trailers

      • Travel accommodations

      • Secretaries

      • Nannies

  • Crew:

    • Basic personnel might include:

      • Camera and audio operators and their assistants

      • Director of photography

      • Assistant director

      • Prop master

      • Wardrobe designer and supervisor

      • Producing designer

      • Electricians (gaffers)

      • Grips

      • Stylist

      • Script supervisor

      • Scene artists

      • Set designers

      • Carpenters

      • Still photographers

      • Location scout

      • Craft service

      • Stock and materials

      • Ambulance or paramedic/nurse on call

      • Tutor for children

      • Choreographers

      • Stunt coordinators

      • Parking coordinator

      • Catering crew

  • Staff:

    • The project usually employs:

      • Production secretaries

      • Administrative staff

      • Production assistants (PAs)

      • Interns who are assigned to areas in which they’re needed

  • Locations:

    • A location can be less expensive than building a set

    • Locations can have their own challenges:

      • Audio problems that can’t be controlled

      • Inadequate electrical power for cables and lights

    • Foreign locations create additional costs such as:

      • Varying personnel rates and wages

      • Travel expenses

      • Taxes

      • Currency exchange rates

    • Costs for locations can include:

      • Scouting fees

      • Transportation

      • Hotels for cast and crew

      • Meals

      • Location and permit fees

      • Equipment rentals

  • Set construction:

    • Set design can require:

      • Production designer

      • Set designer

      • Construction costs

      • Artists

      • Painters

      • Carpenters

    • Sets can be:

      • Elaborate

      • Handcrafted

      • Computer-generated

      • Minimal and simple

  • Hair and makeup:

    • Special effects are taken into account:

      • Fake blood

      • Wounds

      • Toupees

      • Hairpieces

      • Wigs

  • Wardrobe:

    • This can require a:

      • Wardrobe designer

      • Supervisor

      • Assistants

    • The clothing and costume needs of each actor are:

      • Carefully designed

      • Maintained

      • Kept track of

  • Period pieces:

    • Recreating another time period automatically increases the budget in virtually every below-the-line area including:

      • Locations and sets

      • Wardrobes and props

      • Researchers

      • Production designers

  • Special effects:

    • This category includes extra costs for things like:

      • Explosions

      • Stunts

      • Smoke

      • Special lighting

      • Car chases

      • Gunshots

      • Rain

  • Music and sound effects:

    • Most programs include show themes and filler music that has been composed especially for the program, as well as additional sound effects and voice-over narration

    • Occasionally, a soundtrack or theme song can become a popular hit

    • For lower budgets, stock music is an excellent alternative

  • Transportation:

    • Hauling equipment, cast, and crew from one location to another requires:

      • Trucks

      • Vans

      • Other vehicles

      • Tolls

      • Parking

      • Gas

      • Insurance

      • Vehicle maintenance

  • Equipment:

    • This general category might include:

      • Camera and audio equipment

      • Cranes and jibs

      • Walkie-talkies

      • Generators

      • Lighting

      • Fans and air conditioning

      • Tape stock

      • Gas and electric

  • Meals:

    • Make sure there’s at least one full-sized healthy meal per day

    • Keep a table stocked with:

      • Healthy snacks

      • Fresh fruit or veggies

      • Bit of junk food

      • Refills of coffee and tea

      • Plenty of water

  • Security:

    • In many cases, a production needs security guards to:

      • Protect equipment

      • Keep talent isolated from fans

      • Crowd control

      • Generally, keep an eye on everything

  • Postproduction:

    • Costs include:

      • Tape transfers

      • Downloading into an editing system

      • The editing system

      • The editor

      • Music and sound design

      • Audio mixes and engineers

      • Graphic elements

  • Animation:

    • If a show contains animated portions or is entirely animated, this budget line can be complex and might include:

      • Artists

      • Designers

      • Colorists

      • Software operators

      • Variety of other personnel and equipment

Additional Budget Lines:

  • Office overhead:

    • It includes daily operating expenses, such as:

      • Rent

      • Electricity

      • Telephone (cells and landlines)

      • Faxes

      • High-speed Internet

      • Copy machines

      • A DVD and monitor for screening demo reels and your own footage

      • Basic supplies like paper, pens, and staples

      • Shipping and messengers

  • Petty cash:

    • By using a Petty Cash Report form you can keep track of your costs (and receipts) for:

      • Meals

      • Taxis

      • Tolls

      • Copying scripts

      • Various odds and ends that can inflate the budget

  • Finance charges:

    • If you’re paying for anything with a credit card, remember to factor in the monthly interest

  • Payroll services:

    • When you make your budget, you’ll factor in fringe benefits for crew and talent payroll. You can pay them in one of two ways:

      • The first is through a payroll company that will take out fringes like taxes, workers’ compensation, and other fees, and charge a payroll service fee

      • The second is that you can pay people as independent contractors

  • Accounting fees:

    • The accountant regularly:

      • Keeps track of all daily and weekly costs for the production

      • Issues regular reports on the budget’s progress

      • Pays all personnel

      • Takes out taxes when necessary

      • Pays the accounts for union costs, agents’ or managers’ percentages, pension, and welfare

      • Pays any other costs

  • Legal fees:

    • Many contracts are simple enough to be drafted by the producer using a deal memo

    • More complex contracts and negotiations require consultation with an entertainment lawyer

    • Almost all productions require releases and contracts with the:

      • Creative teams

      • Talent

      • Crew

      • Other personnel

      • Sound stages

      • Facilities

      • Other businesses needed in production

  • Music licensing:

    • Costs for music can be prohibitive and it could include:

      • Composer

      • Lyricist

      • Musicians

      • Recording studio costs

      • Licensing fees with the music publisher and the recording company

  • Stock footage:

    • To save the costs of an original musical composition or preexisting music, producers often rely on stock music that is royalty-free and cost-effective

    • The same applies to stock film or video footage that has been bought by a stock footage company and can be licensed

  • Research fees:

    • A researcher can be a staff member or a freelance professional, depending on the complexity of the research needed

    • Sometimes interns can help for free

    • Depending on the project, a researcher or team of researchers might be an integral part of the process, especially in the case of:

      • Fact-based programming

      • Documentaries

      • News

      • Some reality shows

  • Transcription:

    • Many producers prefer to work with written transcripts of interviews and documentary footage that are word-for-word transcriptions, often with time-code references

    • In some cases, a translator, who’s also a transcriber, may be needed

  • Translation:

    • Certain projects might require a separate audio track for translating the dialogue into another language

    • This requires a:

      • Translator to do the actual translation

      • Narrator reads it

      • Director or producer to oversee the audio session

  • Advertising and marketing:

    • Both paid and free publicity is vital to the success of a show

    • This could include a:

      • Still photographer to take publicity shots

      • Publicist to make sure the stills are featured in articles or ads for the project

    • Other costs could include:

      • Promos

      • Printing and distributing posters

      • Flyers

      • Direct mail

      • Online

      • Newspaper, and magazine advertising

      • Hosting screenings

      • Entering festivals

  • Contingencies:

    • A professional budget builds in a contingency amount of roughly 10 percent of the budget

  • Insurance:

    • As the producer, you must absolutely protect your production and yourself with insurance. It’s a necessity: you could lose everything from one lawsuit

    • All independent producers and production companies protect themselves with a Comprehensive General Liability insurance policy that includes liability and workers’ compensation

    • In most U.S. cities and states, a Certificate of Insurance (COI) is necessary to get a shooting permit

Insurance for your specific project could include:

  • General liability:

    • Protects you against claims of:

      • Bodily injury

      • Property damage

      • Vehicular damage that’s additional to auto insurance

    • You might also add riders or special coverage for:

      • Stunts

      • Explosions

      • Cast insurance

      • Props and sets

      • Extra expenses

      • Third-party property damage

      • Equipment loss or damage

      • Faulty stock

      • Faulty cameras or audio equipment

      • Excess liability

      • Union insurance

      • Animal injury or death

  • Workers’ compensation:

    • Covers temporary or permanent loss of cast or crew

    • Pays for:

      • Hospital and medical

      • Disability

  • Entertainment package:

    • In addition to the insurance policies, producers can also cover their project with extra insurance riders that protect against the:

      • Bad stock

      • Lost or damaged camera masters

      • Video or film processing

      • Lost or damaged props

      • Sets

      • Equipment

      • Wardrobe

      • Extra expenses

      • Third-party damage

    • Other coverage includes:

      • Bad weather

      • Demands by an actor

      • Excess liability

      • Aircraft and watercraft

      • Animals

      • Vehicles

      • Political risks

      • Unique sets or props

  • Errors and Omission insurance (E&O):

    • Insurance that protects the production against lawsuits involving authorship and copyright issues such as:

      • Plagiarism

      • Unauthorized use of ideas, characters, titles, formats, or plots

    • It also covers the:

      • Invasion of privacy

      • Slander

      • Libel or character defamation

      • Copyright infringement

  • Institutional and educational insurance:

    • In some cases, a college, university, or public or private school might provide insurance coverage for enrolled students’ class productions

    • This includes:

      • General liability insurance

      • Insurance for video and audio equipment

      • Insurance for third-party property

    • This insurance seldom covers a project that:

      • Is shot in a foreign location

      • Uses explosives or moving vehicles

      • Depends on stunts

      • Other liability-prone components

Hiring Union versus Non-Union Talent:

  • Union members are generally assumed to be professionals with experience. However, unions dictate specific rates and rules for working conditions to which producers and union members must adhere. There is also extra paperwork and payments.

  • Non-union talent and crew can be as experienced and professional as union members without the restrictions of a union governing their work. Producers often pay their nonunion crew the same rates as they would pay a union member, without having to deal with paying benefits or doing extra paperwork

  • There are several unions that a producer may deal with:

    • Writers Guild of America (WGA)

    • Directors Guild of America (DGA)

    • Screen Actors Guild (SAG)

    • American Federation of Television and Radio Actors (AFTRA)

    • National Association of Broadcast Employees and Technicians-Communications Workers of America (NABET-CWA)

    • International Alliance of Theatrical Stage Employees (IATSE)

III. Find The Financing

Possible Sources for Funding Your Project:

  • Private investors:

    • You can approach people you know or find business people you’ve never met who see the economic promise in your idea

    • Ideally, your project will be successful, and your investors can see a return on their initial investment

  • Grants:

    • Grants are awarded by public and private foundations

    • Grants are a source of money that could prove beneficial in funding phases of your project, such as the:

      • Initial research

      • Writing

      • Postproduction

  • Public foundations:

  • State and local government offer funds for projects that fit their grant requirements

  • Various categories of financial aid and grants are given out to filmmakers by organizations, such as:

    • National Endowment for the Humanities (NEH)

    • National Endowment of the Arts (NEA)

    • National Science Foundation (NSF)

    • American Film Institute (AFI)

  • Private foundations:

    • Most large corporations earmark specific funds to support projects in the public interest to elevate their own public image

    • They may fund part or all of a project, or underwrite projects that they want to be associated with

    • Public television might air a special or a series that is partially or fully sponsored by a public or private foundation

  • Bank loans:

    • Avoid investing your own money if you can

    • If you’re determined to make your project, and you know that you can pay the loan back later with interest, it might be possible to get a bank loan if your credit allows

  • Credit cards:

    • You may have a healthy credit rating and can afford to take out a cash advance to pay for production costs. But before you do this, add up the extra interest costs on the advance, and be sure that you can cover the payments

Options for Self-Funding:

  • In many cases, people will exchange goods and services for a courtesy credit or special thanks at the end of the show. You can also offer deferred payment, giving them an agreed-upon sum if your project hits a specified profit point down the line

  • Producers can subsidize their projects with their own money or they can find:

    • Investors

    • Corporate sponsorship

    • Foundation grants

    • Bank loans

    • Donations

    • Barter goods

    • Exchange services

  • For smaller budgets, producers:

    • Put together fundraisers and online auctions

    • Sell stocks

    • Throw keg parties

    • Come up with imaginative and creative ways to pull together the money

  • Your list of potential contributors could include any of these people or organizations:

    • Family and relatives

    • Friends

    • Other writers and producers

    • Fellow students

    • Former elementary or high school students

    • Coworkers

    • Independent TV/film/new media volunteer organizations

    • Writers

    • Directors

    • Producers

    • Lawyers

    • Agents

    • Managers

    • Investment brokers

    • Actors

    • Restaurant or deli owners

    • Local stores

    • National chains

    • Social networking sites

Bartering, Clever Negotiation, and Tips to Save Money:

  • Negotiation:

    • A producer can often negotiate better rates

    • Few unions will agree to lower the rates for their members, but there may be exceptions

    • Sometimes non-union actors, crews, writers, and directors, as well as equipment rental houses and postproduction facilities may be willing to negotiate

    • Some people are willing to work for half-day rates

    • Another potential area of negotiation involves product placement, in which a product is placed in such a way that it’s visible to the viewer, and integrated into the scene. A fee is paid for this service

  • Deferred Payment:

    • To save money, a producer might offer a deferred payment to some or all of the people involved

    • This means that when (or if) the project eventually makes money, all who agreed to defer their salaries are paid when it makes money later, often with interest or bonuses on top of their original salary agreement

  • Courtesy Credits:

    • A producer can often negotiate with providers of goods and services, simply by giving them an acknowledgment in the end credits of the program

  • Money Back:

    • Occasionally, after the shooting has been completed, a project may end up with items that can be:

      • Sold for cash

      • Returned for refunds

      • Exchanged for services

    • Items might include:

      • Unused stock

      • Wardrobe

      • Props

      • Furniture

      • Plants

      • Equipment

      • Building materials

      • Wall hangings

      • Furniture

  • In-Kind Donations:

    • An inventive producer can save substantial costs in the budget by asking for donations of goods or services

    • Some classic examples of in-kind donations that are offered either at a lower rate or for free include:

      • No-fee location

      • Food and beverages from a restaurant or grocery store

      • Vehicles

      • Software

      • Supplies

      • Film or digital stock

    • Other in-kind services:

      • Legal and accounting services

      • Databases and computers

      • Telephone and Internet

      • Post-production facilities

Student Budgets and Resources:

  • A student can often benefit from the school’s tax-exempt status and liability insurance

  • Several professional unions may give students concessions on rates for student projects made under the auspices of an accredited school

  • Usually, the resources for students come with specific guidelines and must be made only for use in the classroom or to be shown in student festivals

  • Many editing and audio facilities and businesses provide student rates for:

    • Software programs

    • Original music

    • Stock music

    • Stock footage

  • Students might qualify for lower student rates that could apply to:

    • Van or car rentals

    • Travel

    • Meals

  • Many students can take advantage of the resources their school offers, which might include:

    • Video and audio equipment

    • Allotments of video stock

    • Editing equipment

    • Graphics tools

    • Music libraries

    • Possibly extra student labor

  • Students can often benefit by affiliation with:

    • School-sponsored grants, awards, and sponsorships

    • Private investors like friends and family

    • Professional business investors

    • Festivals

    • Public and private foundation grants

Summary

  • Creating a budget and sticking to it takes:

    • Discipline

    • Ingenuity

    • Experience

    • Patience

Review Questions:

  • What is the first element of “reality” that you must consider when developing a project?

  • What is the purpose of a production book? A breakdown sheet? A storyboard?

  • Define cross-boarding. Give an example of its use.

  • Identify the key differences between hiring union and non-union crew employees.

  • What are estimates versus actuals? Why is it helpful to track both throughout a project?

  • What is a budget top sheet?

  • What are three areas in which a lawyer can be of assistance to your project?

Chapter 4: Connecting the Dots: Breakdowns, Budgets, and Finance

I. Break Down The Idea

  • Making a budget for your project requires you to:

    • Examine each aspect of your project

    • Give it a face

    • Assign its job descriptions and a set of parameters

  • As a guideline for the budgeting process, you can:

    • Refer to the comprehensive budget template

    • Research budgeting software programs like:

      • Movie Magic Budgeting

      • EP (Entertainment Partners)

  • The best budgets emerge from:

    • Solid research

    • Cost comparisons

    • Studying other producers’ budgets

    • Talking to people with budgeting experience

    • Practice

Understand the Big picture of Production:

  • The producer may work with:

    • A small two-man crew

    • A large team with other producers

    • Writers

    • Director

    • Actors and talent

    • A substantial production crew

    • Heads of key departments

    • Lawyers

    • Insurance agents

    • Accountants

    • Public relations

    • Representatives

Create a Production Book:

  • An essential tool in that organization process is called a production book. Producers generally keep a separate production book for each project, a three-ring loose-leaf binder with tab dividers for each section. It includes most, if not all, of the following categories:

    • A contact list including names and phone numbers for producers, talent, crew members, director, catering, vendors, and other essential contact information

    • The script and all versions and revisions

    • Daily shot lists

    • Shooting schedules and call sheets

    • Production reports after the project wrap up

    • Scene breakdowns

    • Storyboards

    • Props and art breakdowns

    • Wardrobe, hair, and makeup breakdown

    • Transportation details

    • Meals and craft service plans

    • Location agreements and shooting permits

    • Releases and clearances for talent, locations, artwork, etc.

    • Deal memos with the crew

    • Insurance information

    • Equipment list

    • Miscellaneous

    • Budget

    • Inventory:

      • Video stock

      • Props

      • Wardrobe

Break Down Your Script:

  • The script is the blueprint for your budget

  • Allow yourself or your writer(s) adequate time to develop your script. You don’t want to frantically rewrite it on set when time and money are at a premium

  • Most scripts must get final approval from development executives or clients, which can result in additional changes to the script or overall project restructure. The time required for the writer(s) to complete any rewrites is an added budget item. Most scripts require some tweaking and several revisions

  • Include money in your budget to cover an outline, a treatment, and at least two rewrites before you start shooting

The Breakdown:

  • Every script is a compilation of scenes, and each scene has certain requirements that cost money. A breakdown sheet helps the production staff to understand what is needed in each scene

  • The breakdown includes any or all of the following categories:

    • The scene number and name

    • The date of the breakdown sheet

    • The project title

    • The page number of the script

    • Day or night

    • Additional production notes

    • Location:

      • On set

      • A real location

    • Interior or exterior:

      • Shooting inside

      • Shooting outside

    • Brief scene description:

      • One or two lines

    • Cast:

      • With speaking parts

    • Minors:

      • Often require tutors and overtime

    • Extras:

      • No speaking parts

      • Either in the scene or in the background

    • Special effects:

    • This ranges from explosions to blood packs to extra lighting

    • Props:

      • Anything handled by a character in the scene

    • Set dressing:

      • Items on the set not handled by the character

    • Wardrobe:

      • Any details that are pertinent to that scene

    • Makeup and hair:

      • Wounds

      • Aging

      • Wigs

      • Facial hair

    • Extra equipment:

      • Jibs

      • Cranes

      • A dolly

      • Steadicams

    • Stunts:

    • Falls

    • Fights

    • Explosions requiring a stunt person and stunt coordinator

    • Vehicles:

      • Picture cars

      • Other vehicles used by characters in the scene

    • Animals:

      • Any animal that appears in the scene comes with a trainer, or wrangler, who takes charge of the animal during production

    • Sound effects and music:

      • Anything played back on set

Storyboarding:

  • Storyboards are not necessary for each project, but they can be useful organizational tools

  • Storyboards are simple, cartoon-like sketches of each scene in a script. They’ve numbered boxes with a drawing inside; each box refers to a scene or shot number from the script

  • Usually, storyboards contain minimal black-and-white line drawings, although they can be in full-color photography, or even animated

  • For unscripted programs, storyboards can help the production team to visualize and structure a location so that it looks natural but includes optional spots to place cameras or microphones

  • Each sketch is a rough portrait of the scene being shot:

    • The location of one character in relation to another

    • The framing

    • The surroundings

    • The colors or lighting in a scene

Cross-Boarding:

  • The producer shoots scenes, consecutively, from two or three different episodes that all take place on the same set or location

  • It is much more cost-effective to keep the crew in place and the set dressed and lit so that all three scenes can be shot in the one location

II. Budget The Idea

  • Larger productions tend to have budgets extensive enough to require budgeting software and spreadsheets; smaller productions might need only a page or two to keep track of their costs

  • Budget categories:

    • Preproduction

    • Production

    • Postproduction

  • Budget sections:

    • Above-the-line

    • Below-the-line

  • Producers factor in indirect costs, like:

    • Legal fees

    • Accounting service

    • Insurance premiums

    • Taxes

    • The contingency that covers unforeseen costs

Budgeting Costs: Two-Part versus Three-Part Formats:

  • Most television and new media producers find it easier to look at their costs by dividing their budget items into three major categories:

Preproduction:

  • Costs tend to be lower and more controllable in this first stage of a project

  • Budget items usually include:

    • The producer’s fee for either writing or working with a writer

    • Taking meetings

    • Hiring crews

    • Casting actors or talent

    • Coordinating stunts

    • Planning the shooting schedule

    • Booking hotels, meals, and travel

    • Planning the project’s overall development

  • Budgeting for a writer can be done in several ways:

    • A writer might be paid in stages, such as 30 percent of the agreed-upon fee after signing a contract, 30 percent with the first draft, and the remaining 40 percent paid after final acceptance

    • The producer and writer might agree on a flat fee that covers all aspects:

      • Developing the idea

      • Writing the script

      • Any revisions

  • Other preproduction costs can include:

    • Designing storyboards

    • Consultant fees

    • Casting fees

    • Space for talent rehearsals

    • Production staff

    • Location scouting

    • Messengers and shipping

    • Meetings

    • Meals

  • Any sets must be:

    • Planned

    • Constructed

    • Painted

    • Moved

Production:

  • When the producer has thoroughly mapped out everything needed to shoot the project, the production phase can be the quickest and least problematic part of the project:

    • The script has been researched and finalized

    • The crew and equipment have been hired

    • The talent has been cast

    • The key department heads have submitted their department’s requirements, with estimated costs for production,

    • Contingency money has been put aside

    • Details have been finalized so that the actual shoot can begin

Postproduction:

  • This is traditionally the most challenging area for producers to accurately budget

  • There are many factors in the postproduction process to consider:

    • The skills and style of the editor

    • Many hours of footage need to be:

      • Screened

      • Logged

      • Loaded into the editing system

    • The costs for the:

      • Editor

      • Editing facility

      • The audio mixer

      • The audio facility

      • Graphics

      • Artwork

      • Animations

      • Text

      • Captioning

      • Credits

      • Music

      • Narration

      • Voice-over

      • Sound effects

      • Sound design

      • Foreign language translation

Two-Part Budgets:

  • In some television projects, commercials, and more elaborate, big-budget television series or specials, the producer might use a format that’s similar to a feature film budget. This format divides the production costs into two areas:

Above-the-line:

  • These costs are project-specific fees or salaries paid to the creative personnel, depending on multiple factors including:

    • Union affiliation

    • Time required

    • Special perks

    • Star power

  • Above-the-line fees are paid in several ways:

    • Union fees:

      • If the writer is a member of the Writers Guild of America (WGA), that fee is stated in the WGA contract with the producer

      • The same applies to a director who’s a member of the Directors Guild of America (DGA) and to a Screen Actors Guild (SAG) actor

    • Daily or weekly fees:

      • The personnel agrees to a fee to be paid daily or weekly

    • Flat fees:

      • Often a producer agrees to pay a fee to an above-the-line creative in installments: one-third upon signing a contract or deal memo, one-third on completion of principal photography, and the final one-third when the project is completed

    • Producer fee:

      • Because the producer is usually the person deciding how fees are paid, these fees can vary

      • The producer(s) generally takes the project from start to finish and works longer than almost everyone involved

      • Some producers take daily or weekly fees, while others work on a flat per-project fee

      • A producer might also defer payment until the project is sold, in exchange for a bigger fee at the back end of the deal

      • More experienced, savvy producers can structure their contracts to earn extra profits or bonuses in addition to their salaries if the project succeeds

Below-the-line:

  • Below-the-line personnel can be:

    • Union

    • Non-union

  • There are several unions that cover professionals such as:

    • Writers

    • Directors

    • Actors

    • Camera operators

    • Audio engineers

    • Grips and gaffers

    • Makeup and hair

    • Wardrobe

  • Membership in a union doesn’t necessarily imply quality or experience, nor does it mean the opposite. It does mean that union members are protected by strict rules that include:

    • Hours worked

    • Overtime

    • Meals and breaks

    • Benefits

    • Pension and welfare (P&W)

  • These costs tend to be more predictable, covering the:

    • Technical crew and their equipment

    • Resources

    • Insurance

Costs: Estimated versus Actual:

  • In addition to using one of the two previous formats, the producer(s) keeps a separate budget that shows at a glance two aspects of spending the project’s money:

    • Estimated costs:

      • What the producer thinks a budget item will cost

    • Actual costs:

      • What the item actually ends up costing

    • Many budgets add a third column to the right of the first two that lists the “plus or minus” amounts:

      • This column provides an instant readout on the running costs and lets the producer know if the budget is on track or if adjustments need to be made to keep costs in line with the budget

Estimated Budget Costs:

  • If you need to create a rough budget estimate, consider one of the following options:

    • Ask about the client’s financing parameters:

    • Most are experienced enough in the business and have an amount in mind that they’re willing to spend

    • Give the buyer choices:

      • Plan A budget that reflects everything on your production wish list

      • Plan B budget that covers fewer extra effects, locations, and other items that add to a budget

    • The buyer may be willing to give you a small development fee for:

      • Expanding your script

      • Research

      • Location scouting

      • Doing a script breakdown

    • Don’t be afraid of walking away:

      • If, for example, a buyer won’t budge from a $200,000 offer and you’re quite sure that your budget of $300,000 is realistic and professional, you can politely refuse their offer and look elsewhere

      • The skills of negotiation can be developed over time; meanwhile, an agent or entertainment lawyer can be a tremendous asset in deal-making

Researching Budgets Costs:

  • Almost every item included in a budget can have a low-to-high price range

  • The producer must:

    • Make phone calls

    • Research online sources

    • Compare prices

    • Talk to other producers

    • Keep up with the industry trends

Creating a Working Budget:

  • When you break down your script or your treatment to determine specific factors that contribute to a realistic budget, look for these components:

    • The number of preproduction days. To develop the script:

      • Scout locations

      • Interview/hire talent and crew

    • The number of shooting days. On set and/or on the location:

      • What sets are needed

      • What locations and where

      • Your shooting ratio

      • Which talent and crew are working on what days and their costs

      • Equipment rental charges

    • The number of postproduction days:

      • Log and screen footage

      • Notes on editing script

      • Plan and complete graphics

      • Overall sound design

      • Edit

      • The final mix

Budget templates:

  • An effective budget outlines each and every category involved in every phase of the project

  • Each category in the budget is known as a budget line and each item has its own line on that budget. There’s a line for:

    • The producer

    • Props

    • Equipment rental

    • Every item

  • There is no one standard budget form that’s used by all producers but there are several programs that make it easier to budget:

    • EP Budgeting

    • PointZero

    • QuickBooks

    • Movie Magic Budgeting

The Top Sheet:

  • Most longer-form budgets begin with a top sheet

  • It’s a brief summary of the project’s costs in each department

  • It gives the producer a valuable overview of the budget at a glance

The Detailed Budget:

  • Each detail in a script or project translates into a cost that’s part of a key budget category, account, or account line

  • Budgets tend to be confidential and seldom distributed to anyone but the producer, director, line producer, and/or production manager

  • A detailed budget varies in length, depending on the project

  • These accounts include all the departments and all their expenses:

    • Salaries

    • Material

    • Equipment

    • Overtime

Budget Lines and Categories:

  • Producers:

    • Each project has at least one producer with specific responsibilities

    • The primary producer is usually at the helm of the project from day one and gets paid until the project is completed

  • Screenplay and/or story rights:

    • If the script isn’t the producer’s original script, then they pay for the right to use someone else’s:

      • Story

      • Script

      • Article

      • Book

      • Idea

  • Writer(s):

    • Regardless of the source of the idea, a writer or team of writers is usually hired to:

      • Flesh out the idea

      • Refine an existing script

  • Director:

    • If you’re producing an actor-heavy dramatic project, you may hire a director, who has the:

      • Experience

      • Vision

      • Patience

      • Ability to work fast

  • Casting Directors and expenses:

    • Casting involves both principals and extras

    • Expenses involve:

      • Casting space

      • Taping

      • Equipment

      • Meals

      • PAs

  • Actors:

    • Agency fees are part of the budget to consider

    • Minors require extra fees, including:

      • On-set tutors

      • Overtime

      • Other perks

  • Talent perks:

    • Stars often demand extra benefits such as:

      • Personal makeup artist

      • Wardrobe stylist

      • Physical trainer

      • Special trailers

      • Travel accommodations

      • Secretaries

      • Nannies

  • Crew:

    • Basic personnel might include:

      • Camera and audio operators and their assistants

      • Director of photography

      • Assistant director

      • Prop master

      • Wardrobe designer and supervisor

      • Producing designer

      • Electricians (gaffers)

      • Grips

      • Stylist

      • Script supervisor

      • Scene artists

      • Set designers

      • Carpenters

      • Still photographers

      • Location scout

      • Craft service

      • Stock and materials

      • Ambulance or paramedic/nurse on call

      • Tutor for children

      • Choreographers

      • Stunt coordinators

      • Parking coordinator

      • Catering crew

  • Staff:

    • The project usually employs:

      • Production secretaries

      • Administrative staff

      • Production assistants (PAs)

      • Interns who are assigned to areas in which they’re needed

  • Locations:

    • A location can be less expensive than building a set

    • Locations can have their own challenges:

      • Audio problems that can’t be controlled

      • Inadequate electrical power for cables and lights

    • Foreign locations create additional costs such as:

      • Varying personnel rates and wages

      • Travel expenses

      • Taxes

      • Currency exchange rates

    • Costs for locations can include:

      • Scouting fees

      • Transportation

      • Hotels for cast and crew

      • Meals

      • Location and permit fees

      • Equipment rentals

  • Set construction:

    • Set design can require:

      • Production designer

      • Set designer

      • Construction costs

      • Artists

      • Painters

      • Carpenters

    • Sets can be:

      • Elaborate

      • Handcrafted

      • Computer-generated

      • Minimal and simple

  • Hair and makeup:

    • Special effects are taken into account:

      • Fake blood

      • Wounds

      • Toupees

      • Hairpieces

      • Wigs

  • Wardrobe:

    • This can require a:

      • Wardrobe designer

      • Supervisor

      • Assistants

    • The clothing and costume needs of each actor are:

      • Carefully designed

      • Maintained

      • Kept track of

  • Period pieces:

    • Recreating another time period automatically increases the budget in virtually every below-the-line area including:

      • Locations and sets

      • Wardrobes and props

      • Researchers

      • Production designers

  • Special effects:

    • This category includes extra costs for things like:

      • Explosions

      • Stunts

      • Smoke

      • Special lighting

      • Car chases

      • Gunshots

      • Rain

  • Music and sound effects:

    • Most programs include show themes and filler music that has been composed especially for the program, as well as additional sound effects and voice-over narration

    • Occasionally, a soundtrack or theme song can become a popular hit

    • For lower budgets, stock music is an excellent alternative

  • Transportation:

    • Hauling equipment, cast, and crew from one location to another requires:

      • Trucks

      • Vans

      • Other vehicles

      • Tolls

      • Parking

      • Gas

      • Insurance

      • Vehicle maintenance

  • Equipment:

    • This general category might include:

      • Camera and audio equipment

      • Cranes and jibs

      • Walkie-talkies

      • Generators

      • Lighting

      • Fans and air conditioning

      • Tape stock

      • Gas and electric

  • Meals:

    • Make sure there’s at least one full-sized healthy meal per day

    • Keep a table stocked with:

      • Healthy snacks

      • Fresh fruit or veggies

      • Bit of junk food

      • Refills of coffee and tea

      • Plenty of water

  • Security:

    • In many cases, a production needs security guards to:

      • Protect equipment

      • Keep talent isolated from fans

      • Crowd control

      • Generally, keep an eye on everything

  • Postproduction:

    • Costs include:

      • Tape transfers

      • Downloading into an editing system

      • The editing system

      • The editor

      • Music and sound design

      • Audio mixes and engineers

      • Graphic elements

  • Animation:

    • If a show contains animated portions or is entirely animated, this budget line can be complex and might include:

      • Artists

      • Designers

      • Colorists

      • Software operators

      • Variety of other personnel and equipment

Additional Budget Lines:

  • Office overhead:

    • It includes daily operating expenses, such as:

      • Rent

      • Electricity

      • Telephone (cells and landlines)

      • Faxes

      • High-speed Internet

      • Copy machines

      • A DVD and monitor for screening demo reels and your own footage

      • Basic supplies like paper, pens, and staples

      • Shipping and messengers

  • Petty cash:

    • By using a Petty Cash Report form you can keep track of your costs (and receipts) for:

      • Meals

      • Taxis

      • Tolls

      • Copying scripts

      • Various odds and ends that can inflate the budget

  • Finance charges:

    • If you’re paying for anything with a credit card, remember to factor in the monthly interest

  • Payroll services:

    • When you make your budget, you’ll factor in fringe benefits for crew and talent payroll. You can pay them in one of two ways:

      • The first is through a payroll company that will take out fringes like taxes, workers’ compensation, and other fees, and charge a payroll service fee

      • The second is that you can pay people as independent contractors

  • Accounting fees:

    • The accountant regularly:

      • Keeps track of all daily and weekly costs for the production

      • Issues regular reports on the budget’s progress

      • Pays all personnel

      • Takes out taxes when necessary

      • Pays the accounts for union costs, agents’ or managers’ percentages, pension, and welfare

      • Pays any other costs

  • Legal fees:

    • Many contracts are simple enough to be drafted by the producer using a deal memo

    • More complex contracts and negotiations require consultation with an entertainment lawyer

    • Almost all productions require releases and contracts with the:

      • Creative teams

      • Talent

      • Crew

      • Other personnel

      • Sound stages

      • Facilities

      • Other businesses needed in production

  • Music licensing:

    • Costs for music can be prohibitive and it could include:

      • Composer

      • Lyricist

      • Musicians

      • Recording studio costs

      • Licensing fees with the music publisher and the recording company

  • Stock footage:

    • To save the costs of an original musical composition or preexisting music, producers often rely on stock music that is royalty-free and cost-effective

    • The same applies to stock film or video footage that has been bought by a stock footage company and can be licensed

  • Research fees:

    • A researcher can be a staff member or a freelance professional, depending on the complexity of the research needed

    • Sometimes interns can help for free

    • Depending on the project, a researcher or team of researchers might be an integral part of the process, especially in the case of:

      • Fact-based programming

      • Documentaries

      • News

      • Some reality shows

  • Transcription:

    • Many producers prefer to work with written transcripts of interviews and documentary footage that are word-for-word transcriptions, often with time-code references

    • In some cases, a translator, who’s also a transcriber, may be needed

  • Translation:

    • Certain projects might require a separate audio track for translating the dialogue into another language

    • This requires a:

      • Translator to do the actual translation

      • Narrator reads it

      • Director or producer to oversee the audio session

  • Advertising and marketing:

    • Both paid and free publicity is vital to the success of a show

    • This could include a:

      • Still photographer to take publicity shots

      • Publicist to make sure the stills are featured in articles or ads for the project

    • Other costs could include:

      • Promos

      • Printing and distributing posters

      • Flyers

      • Direct mail

      • Online

      • Newspaper, and magazine advertising

      • Hosting screenings

      • Entering festivals

  • Contingencies:

    • A professional budget builds in a contingency amount of roughly 10 percent of the budget

  • Insurance:

    • As the producer, you must absolutely protect your production and yourself with insurance. It’s a necessity: you could lose everything from one lawsuit

    • All independent producers and production companies protect themselves with a Comprehensive General Liability insurance policy that includes liability and workers’ compensation

    • In most U.S. cities and states, a Certificate of Insurance (COI) is necessary to get a shooting permit

Insurance for your specific project could include:

  • General liability:

    • Protects you against claims of:

      • Bodily injury

      • Property damage

      • Vehicular damage that’s additional to auto insurance

    • You might also add riders or special coverage for:

      • Stunts

      • Explosions

      • Cast insurance

      • Props and sets

      • Extra expenses

      • Third-party property damage

      • Equipment loss or damage

      • Faulty stock

      • Faulty cameras or audio equipment

      • Excess liability

      • Union insurance

      • Animal injury or death

  • Workers’ compensation:

    • Covers temporary or permanent loss of cast or crew

    • Pays for:

      • Hospital and medical

      • Disability

  • Entertainment package:

    • In addition to the insurance policies, producers can also cover their project with extra insurance riders that protect against the:

      • Bad stock

      • Lost or damaged camera masters

      • Video or film processing

      • Lost or damaged props

      • Sets

      • Equipment

      • Wardrobe

      • Extra expenses

      • Third-party damage

    • Other coverage includes:

      • Bad weather

      • Demands by an actor

      • Excess liability

      • Aircraft and watercraft

      • Animals

      • Vehicles

      • Political risks

      • Unique sets or props

  • Errors and Omission insurance (E&O):

    • Insurance that protects the production against lawsuits involving authorship and copyright issues such as:

      • Plagiarism

      • Unauthorized use of ideas, characters, titles, formats, or plots

    • It also covers the:

      • Invasion of privacy

      • Slander

      • Libel or character defamation

      • Copyright infringement

  • Institutional and educational insurance:

    • In some cases, a college, university, or public or private school might provide insurance coverage for enrolled students’ class productions

    • This includes:

      • General liability insurance

      • Insurance for video and audio equipment

      • Insurance for third-party property

    • This insurance seldom covers a project that:

      • Is shot in a foreign location

      • Uses explosives or moving vehicles

      • Depends on stunts

      • Other liability-prone components

Hiring Union versus Non-Union Talent:

  • Union members are generally assumed to be professionals with experience. However, unions dictate specific rates and rules for working conditions to which producers and union members must adhere. There is also extra paperwork and payments.

  • Non-union talent and crew can be as experienced and professional as union members without the restrictions of a union governing their work. Producers often pay their nonunion crew the same rates as they would pay a union member, without having to deal with paying benefits or doing extra paperwork

  • There are several unions that a producer may deal with:

    • Writers Guild of America (WGA)

    • Directors Guild of America (DGA)

    • Screen Actors Guild (SAG)

    • American Federation of Television and Radio Actors (AFTRA)

    • National Association of Broadcast Employees and Technicians-Communications Workers of America (NABET-CWA)

    • International Alliance of Theatrical Stage Employees (IATSE)

III. Find The Financing

Possible Sources for Funding Your Project:

  • Private investors:

    • You can approach people you know or find business people you’ve never met who see the economic promise in your idea

    • Ideally, your project will be successful, and your investors can see a return on their initial investment

  • Grants:

    • Grants are awarded by public and private foundations

    • Grants are a source of money that could prove beneficial in funding phases of your project, such as the:

      • Initial research

      • Writing

      • Postproduction

  • Public foundations:

  • State and local government offer funds for projects that fit their grant requirements

  • Various categories of financial aid and grants are given out to filmmakers by organizations, such as:

    • National Endowment for the Humanities (NEH)

    • National Endowment of the Arts (NEA)

    • National Science Foundation (NSF)

    • American Film Institute (AFI)

  • Private foundations:

    • Most large corporations earmark specific funds to support projects in the public interest to elevate their own public image

    • They may fund part or all of a project, or underwrite projects that they want to be associated with

    • Public television might air a special or a series that is partially or fully sponsored by a public or private foundation

  • Bank loans:

    • Avoid investing your own money if you can

    • If you’re determined to make your project, and you know that you can pay the loan back later with interest, it might be possible to get a bank loan if your credit allows

  • Credit cards:

    • You may have a healthy credit rating and can afford to take out a cash advance to pay for production costs. But before you do this, add up the extra interest costs on the advance, and be sure that you can cover the payments

Options for Self-Funding:

  • In many cases, people will exchange goods and services for a courtesy credit or special thanks at the end of the show. You can also offer deferred payment, giving them an agreed-upon sum if your project hits a specified profit point down the line

  • Producers can subsidize their projects with their own money or they can find:

    • Investors

    • Corporate sponsorship

    • Foundation grants

    • Bank loans

    • Donations

    • Barter goods

    • Exchange services

  • For smaller budgets, producers:

    • Put together fundraisers and online auctions

    • Sell stocks

    • Throw keg parties

    • Come up with imaginative and creative ways to pull together the money

  • Your list of potential contributors could include any of these people or organizations:

    • Family and relatives

    • Friends

    • Other writers and producers

    • Fellow students

    • Former elementary or high school students

    • Coworkers

    • Independent TV/film/new media volunteer organizations

    • Writers

    • Directors

    • Producers

    • Lawyers

    • Agents

    • Managers

    • Investment brokers

    • Actors

    • Restaurant or deli owners

    • Local stores

    • National chains

    • Social networking sites

Bartering, Clever Negotiation, and Tips to Save Money:

  • Negotiation:

    • A producer can often negotiate better rates

    • Few unions will agree to lower the rates for their members, but there may be exceptions

    • Sometimes non-union actors, crews, writers, and directors, as well as equipment rental houses and postproduction facilities may be willing to negotiate

    • Some people are willing to work for half-day rates

    • Another potential area of negotiation involves product placement, in which a product is placed in such a way that it’s visible to the viewer, and integrated into the scene. A fee is paid for this service

  • Deferred Payment:

    • To save money, a producer might offer a deferred payment to some or all of the people involved

    • This means that when (or if) the project eventually makes money, all who agreed to defer their salaries are paid when it makes money later, often with interest or bonuses on top of their original salary agreement

  • Courtesy Credits:

    • A producer can often negotiate with providers of goods and services, simply by giving them an acknowledgment in the end credits of the program

  • Money Back:

    • Occasionally, after the shooting has been completed, a project may end up with items that can be:

      • Sold for cash

      • Returned for refunds

      • Exchanged for services

    • Items might include:

      • Unused stock

      • Wardrobe

      • Props

      • Furniture

      • Plants

      • Equipment

      • Building materials

      • Wall hangings

      • Furniture

  • In-Kind Donations:

    • An inventive producer can save substantial costs in the budget by asking for donations of goods or services

    • Some classic examples of in-kind donations that are offered either at a lower rate or for free include:

      • No-fee location

      • Food and beverages from a restaurant or grocery store

      • Vehicles

      • Software

      • Supplies

      • Film or digital stock

    • Other in-kind services:

      • Legal and accounting services

      • Databases and computers

      • Telephone and Internet

      • Post-production facilities

Student Budgets and Resources:

  • A student can often benefit from the school’s tax-exempt status and liability insurance

  • Several professional unions may give students concessions on rates for student projects made under the auspices of an accredited school

  • Usually, the resources for students come with specific guidelines and must be made only for use in the classroom or to be shown in student festivals

  • Many editing and audio facilities and businesses provide student rates for:

    • Software programs

    • Original music

    • Stock music

    • Stock footage

  • Students might qualify for lower student rates that could apply to:

    • Van or car rentals

    • Travel

    • Meals

  • Many students can take advantage of the resources their school offers, which might include:

    • Video and audio equipment

    • Allotments of video stock

    • Editing equipment

    • Graphics tools

    • Music libraries

    • Possibly extra student labor

  • Students can often benefit by affiliation with:

    • School-sponsored grants, awards, and sponsorships

    • Private investors like friends and family

    • Professional business investors

    • Festivals

    • Public and private foundation grants

Summary

  • Creating a budget and sticking to it takes:

    • Discipline

    • Ingenuity

    • Experience

    • Patience

Review Questions:

  • What is the first element of “reality” that you must consider when developing a project?

  • What is the purpose of a production book? A breakdown sheet? A storyboard?

  • Define cross-boarding. Give an example of its use.

  • Identify the key differences between hiring union and non-union crew employees.

  • What are estimates versus actuals? Why is it helpful to track both throughout a project?

  • What is a budget top sheet?

  • What are three areas in which a lawyer can be of assistance to your project?

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