Independent Television Production Assignment: Telefilm

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Telefilm Canada2 Bloor St W22nd FloorToronto, ON1)First encounter with Telefilm Canada and how to obtain information on the organization:The staff at Telefilm Canada was both accommodating and helpful. It waseasy to both speak with the staff on the telephone as it was to stop by theoffice for further information on the organization. The bulk of theinformation was accessed from the Telefilm Canada office at Bloor Street.

The receptionist was more than happy to give out two folders withinformation on the company, a Telefilm Canada 2000 manual on televisionprograms, as well as a contact name for further information. For futurereference, this person whom the receptionist recommended that would bewilling to meet for discussion is:Helen Paul - Project Co-ordinator ph (416)973-6436 x2525.

Otherwise, most information on the organization, international relations andfinancing (applications included) can either be picked up from the office oraccessed at Telefilm's website at Both options arequite thorough and cover both the television and feature film areas.

2) Structure of the organization and their goals:Telefilm Canada is a cultural agency of the Canadian government.

Telefilm Canada's mission is dedicated to the development and promotion ofthe Canadian television, film, and new media industry (website). They giveindependent producers funding and help to promote their client's projects.

The majority of their clientele is made up of independent producers.

Telefilm Canada has an annual budget of $200 million to guide and promotechosen projects which reflect Canadian society. This budget allows them toensure the widest possible distribution of the project both nationally andinternationally.

Telefilm Canada has four Canadian offices. They are in Toronto,Vancouver, Montreal and Halifax.

3) Who Telefilm serves and what they offer their clientele:Telefilm Canada provides independent producers with the opportunitythrough 17 funds to get funding for their project. Examples of this fundinginclude the Equity Investment Program (EIP) of the Canadian Television Fund(CTF), the Feature Film Fund and the Multimedia Fund (website).

Specifically Telefilm Canada classifies an independent producer as someonewho is not a broadcaster rather owns his or her own production company.

4) Funding Available from Telefilm Canada:Independent Television ProductionMost independent producers who are established professionals in the industry who submit projects with an equally established technical and creative crew are eligible to submit their projects for analysis and funding to Telefilm Canada. As well, independent producers who are backed by an established production company are also eligible.

Commercial broadcasters are not eligible.

Telefilm Canada aims to support Canadian content projects since the corporation acknowledges the important contribution the audio-visual industry makes to the national economy. It provides financial support to high-quality cultural products in all project stages: research and development, financing, production, distribution, marketing and promotion.

The following are funding and assistance programs that are available through Telefilm Canada should your application be approved as eligible. (Those in Italics are specifically for independent television production.)Canadian Television Fund: Equity Investment Program•Feature Film Fund•Official Co-productionsProduction Revenue Sharing Program:•The Multimedia Fund•Feature Film Distribution Fund•Distribution Revenue Sharing Program•National Training Program in the Film and Video Sector•Canadian Production Marketing Assistance Fund (national and international components)•Versioning Assistance Fund•Canada Showcase Program•Canadian Participation in International Film Events•Loan Guarantee Program•Industrial and Professional Development FundSECTION CIndependent Production Financing Processes of CBC, CBC Newsworld and YTVYTV Contact person - Laurinda Shaver, Co-productions:Conversation September 14, 11:50 AM1. What is their criteria for funding independent productions?In order for YTV to even look at a project, it has to fit into one of their programming categories. They are: Preschool (0-5 yrs), Kids (6-9 yrs), Tweens (10-13) Teen (14-19) and Family (all ages). They look for fiction only - no educational, information or magazine shows - they must be ENTERTAINMENT ONLY. Apparently, if you mention the word Educational, they will ceremoniously pitch your pitch right out. If the proposal fits one of these categories, they will read it. It has to be weird, using a “unique way of telling a story.” Independent Productions also have to be 100% Canadian using the CAVCO evaluation point system.

2.What type and how much funding is available? (License fee/ Equity/Facility)YTV offers many types of funding options depending on the needs and type ofproduction. They offer License fees, which make up a certain percentage of a show’s budget, usually 30%. They also offer Equity, meaning that they will invest in the program. Sometimes, they will offer a Development fee, money to help only with the development of the idea. Finally, they will offer Co-productions, meaning that they will provide facilities to help the show get made. In this case, they would claim 50% ownership in the show.

3.What proportion of their annual programming budget do they allocate to the independent television production sector?This answer was confidential. Laurinda was not able to answer this question, but said that YTV must invest 35% of their annual gross budget into 1st run Canadian content.

4.What would be the range of their license fee inb) a 13 X one half hour children’s show? (YTV does not buy any others of the shows)The answer to this question, according to Laurinda, depends entirely on the type of show, how interested they are, and the projected ratings that it will pull in. Reboot, for example, has an unusually high License fee because, as she put it, “The ratings have been unreal.” YTV usually does buy children’s shows in the 13 episode series format, and sometimes in 26 episode blocks. As mentioned above, License fees at YTV usually make up 30% of a show’s budget, but all aspects of funding are variable.

5. Describe the steps involved in obtaining financing from the broadcaster.

First, the Independent Producer phones Delia Leandres, the Commissioning Co-ordinator at YTV and requests a Proposal Package. This outlines all of the information above including submission formats and guidelines. YTV then looks at your background and experience. They ask that you have an Executive Producer, one who will guarantee that this show gets off the ground. The show is then submitted with a release form signed. Next, 5 people look at the proposal - a Manager of Production and Development, 3 Production Executives, and the Commissioning Co-ordinator. If they are interested, they issue either Development money, or a letter of support stating that they are interested in a certain number of episodes at a certain price, with guidelines for future funding efforts.

CBC Contact person – Heather Marshall, Deputy Director of Production Financing for TV Arts and Entertainment. Conversation September 13, 4:50 PM.

1. What is their criteria for funding independent productions?This report will be written from the Arts and Entertainment perspective. CBC purchases all kinds of shows, but the process of submission and financing remains the same for all genres. In order for CBC to look at a production, it has to be 100% CanCon. They have to be distinctly Canadian in flavor compared to other shows that are on air currently on other networks. The CBC uses not only the Cavco system of determining Canadian Content, but a 59 point system as well, using the criteria mentioned above.

2. What type and how much funding is available? (License fee/Equity/Facility)CBC offers mostly license fees in exchange for the rights to air a program. They will pay this fee up to a certain percentage of the budget, and if the money given falls above this threshold, then the money becomes equity, or an investment in the program. They very rarely offer Facility deals, and License fees have to be in cash.

3.What proportion of their annual programming budget do they allocate to the independent television production sector?This answer was difficult for Heather to assess, but a Collective Agreement governs this issue. Again, because the CBC is so large with regional departments and so many factors that go into determining financing, it was difficult for Heather to tell just how much money goes into Independent Production. I was able to find figures from the website stating that CBC Television promised to infuse regional television outfits with $25 million over the next license term to develop new non-news series. In addition, starting this fall and lasting until 2002, CBC will devote over 5.5 million dollars annually to the development of regional talent through new series from across Canada. These numbers do not represent all of the money dedicated to the funding of independent productions, but do serve to give an idea of what initiatives the CBC is currently pursuing.

4.What would be the range of their license fee for a dramatic series, variety special, MOW, documentary?Like most people that I spoke with, Heather could not give a definitive answer for this question, but did say off hand that the CBC usually pays 15 cents on the dollar for Dramatic programming as a general guideline. She also threw out that they often pay around $10 000 per 1-hour variety special.

She officially said that the CBC generally uses the LFP minimum guidelines for any program that they decide to finance which vary per show genre. Other things that would affect the price of an idea – how interested the CBC was in it, and more so, how complete the idea is. If an Independent producer comes with a complete idea package, CBC will likely pay less for it than if they had had some form of creative input into the idea. Heather said that more information could be found at the website for independent producers,

5.Describe the steps involved in obtaining financing from the broadcaster.

The show idea, or initial proposal is submitted to one of four creative heads, Arts, Music, Science and Variety, Children's, Youth and Daytime, Dramatic Series and Movies and Mini-Series before a meeting can take place. In this proposal, CBC (A&E) look for an outline or treatment of your story or idea, preliminary budget for development, and a list of individuals that are involved in the project as well as their resumes. The creative heads in turn give the approved document to Heather Marshall, Deputy Director of Production Financing for TV. If she approves the idea, a broadcaster’s letter is issued, offering an appropriate license fee as well as triggering access to Government funds, such as Telefilm funds and tax credits. The independent producer then takes this letter to places like Telefilm and uses it to gain financial support for their production.

SECTION D1) Define the function of Completion Guarantor:“The investors require some guarantee that you as a producer will complete the production as scheduled and as budgeted, so that they can recoup their investment and, hopefully, earn a profit. A Completion Guarantor is essentially an insurance agent who ensures that the production will be completed.” (Hehner & Sheffer, “Making It”, 1995).

In the words of Jim Sternberg, at the Completion Guarantors, “ a Guarantor is the eyes and ears for the investors on a production.”The Guarantor is involved on a day to day level with the production. They are given copies of the budget, cost reports, the script, biographies of those involved, an overall contact with the production itself. They watch over and ensure that the Producer maintains budget guidelines and is on schedule.

If the Producer exceeds the budget, the Guarantor has take-over rights. The Guarantor can fire and replace the Producer, the Production Manager even the Director. Jim Sternberg explains why cutting the Director is very rare, “the Director most often gets spared because the Distributors have invested in a complete package which includes the selling name of the Director. They can’t block a Guarantor’s decision but can make it be known that they are unhappy.” Sternberg goes on to explain that “hard take-over rights occur when there is a disagreement about the date of delivery, if the project is late or incomplete or if the production doesn’t meet technical standards.”If there are no claims on budget, it is common for the Guarantor to refund half the bond fee to the Producer as a reward for completing the project on time and on budget. The bond fee is the fee that Guarantors charge for their services. Bond fees are negotiable depending on the track record of the Producer, other key production personnel and from the production budget itself. Approximately, the fee is 3-6% of B and C of the proposed budget on pp.101-102 in “Making It”, which is generally variable costs like general expenses, indirect costs, and star costs.

Educational background and experience necessary for Completion Guarantors are backgrounds in finance, banking, accounting, and as Jim Sternberg points out, “ Guarantors must have an understanding of how a television production or film works as well as understanding how key players in the production are involved.”SECTION EACTRA1) Who they representACTRA is the official bargaining agent of performers in Canada. A Performer means a person who is engaged to appear on-camera or whose voice is heard off-camera in any manner whatsoever. Performers include, but are not restricted to the following: actors, animation performers, announcers, background performers, cartoonists, choreographers, chorus performers, dancers, hosts, models, narrators, commentators, off camera performers, panelists, performers, principal actors, puppeteers, singers, specialty acts, sportscasters, stunt performers, variety principal and voice or dialogue coaches.

2) Terms and conditions of their collective agreementThe ACTRA agreement, with regards to independent production, sets forth the minimum rates and working conditions under which Performers may be engaged in Productions produced by any method in Canada or on-location outside of Canada.

The agreement covers a variety of issues that concern Canadian performers. Its purpose is to protect the rights of the Performers providing in-depth information regarding possible situations that could arise while in production.

The following is a summarized list of how the agreement is divided:•recognition and application:includes information regarding a general application•definition of terms: this provides definitions for a variety of terms that are used with regards to contracts and productions.

•the obligations of producers: with regards to equal employment opportunities, harassment, minimum fees, security, credits and production guarantee.

•the obligations and qualifications of ACTRA and the Performers•conditions of engagement, cancellations and postponements•no strike and unfair declaration•grievance and arbitration procedures•workdays, overtime and rest periods (including meal times, make-up and wardrobe)•travel and expenses•working environments•upgrading and doubling•nude scenes, risk performance, stunt performance & coordination•minors: working days, tutoring, dangerous work, presence of parents•auditions and interviews•series options, retakes, added scenes and audio recall•credits, payment, administration fees, insurance & retirement plansAs the document is extremely lengthly, specific information can be obtained via the agreement itself, included in our package.

3) CompensationThe following is a copy of the ACTRA independent production rate card, which details the Performers compensation rights.

SECTION F1)Commitment Letter / Deal Memo / Executed Agreement:Short form contracts can be drawn up between parties to set out the basicterms that have been negotiated and agreed upon. This short form agreementfacilitates quick and efficient negotiations between parties. It is usuallyfollowed by a longer form agreement at a later date, once all the specificdetails have been worked out. However, a commitment letter or deal memo isno less legally binding, and thus should be considered with the same legalcautiousness as a formal agreement. It is a contractually binding document.

This does not guarantee a project will proceed, however a producer can useit to secure terms negotiated during the development period, such as thosethat apply between directors and writers. The long-form contract is usuallygenerated after financing has been secured.

Completion Guarantees:The cost of a production may exceed initial budget calculations.

Completion guarantees are the agreements producers enter into to ensure that funds are available to cover unexpected financial overruns. Investment agreements protect investors from further contributions beyond their initial investment so completion guarantees are used to provide for more funds to complete a production. Producers arrange a completion bond with a completion guarantor who will cover any excess cost. This fee for the agreement is usually a specified percentage of the production budget.

A guarantor will scrutinize the production budget for accuracy and ensureadequate financing is in place to finance the project before signing acompletion guarantee. Subsequently, a guarantor will use their funds tocomplete the project if the agreed-upon budget is exceeded. A guarantor reserves the right to step in and take over a production if he/she feels that theproduction is proceeding beyond its budget.

If the guarantor is required to fund overruns, they are entitled to recouptheir loses from the proceeds of a production, once the initial budget costare returned to investors.

Letter of Adherence:In order to use union members in a non-union production, producers aremust sign letters of adherence. They agree to abide by the terms, conditions, and minimum pay scales as outlined in their collective agreements. (e.g. if using an ACTRA member, it must abide by the ACTRA Independent Production Agreement).

Signing a letter of adherence with one union does not oblige a production toenter into collective agreements with other unions (except the Writers'Guild of Canada). Letters of adherence could be signed with ACTRA, WGC, andDirectors' Guild of Canada, but the rest of the technical crew and craftspeople may remain non-union.

Letters of adherence can be avoided if union members are paid"non-signatory" rates while the rest of the production remains non-union.

The terms and conditions then are set as an independent agreement betweeneach crew member and the producer. However, this only applies for a singleproduction.

Some unions require Letters of adherence to specify a time frame rather thana specific production, so that the producer must adhere to their collectiveagreement on any productions they engage in during that time period.

Buyout:A buyout is a prepaid fee to actors and directors to cover all future andunlimited uses in predetermined media and territories for a limited time.

This is used usually in lieu/or as part of royalty payments. It facilitatesthe producer to bundle up their ownership for limited term, so that he/shecan distribute the production independently, without clearing it each timewith all the respective directors and actors.

The buyout is usually based on a percentage, as outlined in the initialcontract between actors, directors and producers. It is paid in addition tothe basic fee for their services. Directors' buyout can range from 25%-50%of their gross fees.

SourcesACTRA Performers Guild.

Independent Production Agreement- August 9, 1999- December 31, 2001Hehner & Sheffer.

Making It: the Business of Film and Television production in Canada. Doubleday Canada Limited; Toronto, 1995.

Sternberg, Jim. The Completion Guarantors. 65 Heward St, Toronto.