ASK & DISCUSS INDEX

10 years ago - Dan Selakovich

Everything Paddy said. What you are doing is called a "reverse budget." Instead of budgeting, then getting that figure, you're given a figure and you have to make it work for that. As Paddy points out, your daily rate as say, director, doesn't include the production company fee. So unless there's a way to do the shoot AND have the company make that 10% (or whatever you're comfortable with), maybe go back into negotiations with the client.

As a side note, on national commercials here in America, the advertising firm gets a percentage of whatever is spent on the commercial, so they try to spend as much money as possible. That's why commercial work is so awesome here: a great paycheck well above union rates.

10 years ago - Paddy Robinson-Griffin

An aside, as Dan notes, agencies overload the client bill so have an interest in that production bill being a big number. A director buddy was brought into studio for a pack shot (ie the single simplest setup you can get) and was done in 90 minutes. The agency pulled him aside saying they were billing the client for a day in studio, so turn this into a day's work.

He sent a runner off for some very specific, hard to find lamp for 2 hours whilst we chatted on the phone. Goodness alone knows how he padded the other 6 hours.

Yes, they used the 90-minute pack shot in the end. What a waste - if the client was not on site I was going to suggest banging out the fastest ever feature with the free studio and crew... He's a very (splendidly) efficient director, his overall radio isn't far off 3:1, even in this digital age where 10:1 isn't even slightly news!

10 years ago - Paddy Robinson-Griffin

If there's a number you have to get to (what they're offering), you can split it however you think they'll understand it best. I can't suggest figures (and the 20% production fee you're using isn't your wages, which are a line item in this suggestion, the profit is just a fixed rate on top of the whole deal of costs).

But for arguments sake the client has 100 units to spend over 5 films. As you're creatively planning the whole campaign at campaign level, that might be say 10 units overall creative fee, leaving 90 units per film of which 9 are profit, and 81 are all the costs including your and other wages, hires, studio, catering, travel, etc (stuff that will be invoiced/receipted to give the client a copy if they want).

This is a bit backwards, it's a scheme to work the other way round starting with costs and ending up with a 10% rider for profit! But if you're trying to get to a certain number whilst providing transparency you could do as above.

10 years ago - Ian Endfield

Hi Paddy, thanks for your swift response!

Unfortunately the budgets allocated aren't quite like the figures you are mentioning and everything is to come under said budgets including our fee(s). But are you saying that 10-20% should be what we should be taking out of those budgets as profit? As we are doing a few separate projects for them, perhaps we amalgamate the budgets for all of them and take our fee out of that? Is that unreasonable?

10 years, 1 month ago - Paddy Robinson-Griffin

Break it all down with wages and creative fees as line items, don't confuse these with your production markup on costs (ie your profit after all costs) which might be 10-20%. Very much open book accounting. This is assuming the CLIENT is bearing ALL RISK, so if they decide they need an extra 50 go-go dancers in one advert, they don't think your quote of (maybe) £20k is an all-you-can-eat film buffet, instead you hire an extra 50 go-go dancers plus a choreographer plus wranglers plus rehearsal studios etc - and mark it up by the 10-20% production markup.

That's one way at least - and it works for large scale filming of pop acts for their tour DVD's etc.

10 years ago - Ian Endfield

Hi again Paddy, and thanks again for your advice.

I am happy to now amalgamate the total of each budget into one and charge 20% of that. However, when you speak of creative fees how much extra pro rata would you charge there? I now presume that when you say pro rata you mean per budget, which means each creative fee amount will depend on the number of each budget too..?

10 years ago - Paddy Robinson-Griffin

But yes, maybe aggregate the whole campaign - you'll need to amortise the creative fee across a campaign anyway

10 years ago - Paddy Robinson-Griffin

There are no rules, and those figures were just for illustration!

All I'm suggesting is that you break out your costs - if you don't, how will you know if you're making a profit or loss?! As the client sounds like they want an open account book, this is how you would do it - otherwise what on earth business is it of theirs what your profit is? Will they tell you what their profit is?