As the business of financing content becomes ever more expensive and complicated, it becomes necessary to involve ever more partners. But the more partners a producer involves, the more rights they each have to give away. Holding on to enough to make the whole exercise financially meaningful can be a tricky business. VideoAge investigates. For Justin Bodle, chairman and CEO of U.K.-based Power Corp, producers of Flood, Ice , and the new NBC Sam Neill vehicle, Crusoe , the question of rights retention is a story with a very simple plot line. “The bigger the percentage of the budget not paid for by the broadcaster,” asserted Bodle, “the more rights they have to give up to cover the shortfall.” That seems to be a no-brainer, and is an assertion supported by Australia-based Southern Star International’s chief executive Catherine Payne, who noted, “The key factor is the producer’s ability to complete the financing of the production through a combination of other broadcaster pre-sales, investment against distribution rights and accessing subsidies and other forms of investment.” The mood of unanimity appears to be continued by Michele Buck, joint managing director of Mammoth Productions, a new British indie, 25 percent owned by ITV and responsible for the recent BBC primetime drama, Bonekickers , and ITV’S Lost in Austen. “Obviously,” observed Buck, “if you are looking at co-productions then, by definition, you cannot keep all rights outside your territory, as you have to give something to other partners in return for their investment.” But the unanimity starts to thin, as Buck continued, “however, if you are making a parochial drama it is still reasonably common for the commissioning broadcaster to fund the show 100 percent, and then, of course, you are able to keep everything.” Power’s Bodle, by contrast, believes that, “in the case of drama, it is now very hard to make a decent hour of primetime drama on the budgets any one country can afford to offer,” he said. “Over and above that, if you want to make something appealing to the international market, then you will certainly need several broadcasters contributing to the pot.” They also appear to diverge over the relative ease of holding rights for projects with high-end budgets. For Buck, “once you get into high-end budgets then holding on to rights does become a lot more difficult, as this will mean that you are almost certainly talking co-production, and, as I intimated earlier, once you start to do that you have to give away rights in return for the investment other parties are bringing to the table.” Bodle, by contrast, believes, “in many ways it is much easier to hold on to international when funding high-end precisely because no European broadcaster can afford these budgets and even the very biggest players will say, “here’s half the budget – good luck in finding the other half!” This apparent disagreement is probably as much a question of semantics as it is finance since, if the hypothetical high-end budget is to be found, the international rights the producer has retained will, at least in part, have to be given to another broadcaster in another country to raise the deficit. Mark Gray, vice president, Acquisitions, for the U.K.’s FremantleMedia Enterprises, summed up these apparently contradictory views this way. “The major factor,” he insisted, “is the local terms of trade between producer and broadcaster. The other significant factor is budget. If it is very high the broadcaster may be forced to allow the producer to fill the deficit before selling rights elsewhere.” Gray’s underlining of the importance of local terms of trade is echoed by Southern Star’s Payne. “Some markets,” she observed, “are more regulated than others. For example, the terms of trade in the U.K. do give the producer a right to retain distribution, but other markets, such as Australia, are more complicated, where the size of the market often requires a broadcaster to contribute an investment in addition to a license fee.” Although Payne acknowledged that, “they will not necessarily want to control distribution, they will want some influence over it, and also a profit share.” While insisting that, “as we focus on the international market, we do not produce a lot of programming that we do not wish to distribute,” Payne does acknowledge that there are sometimes exceptions, “such as a high-end social documentary that is better sold in a dedicated strand that is already sold in another catalogue.” Fremantle’s Gray believes the U.K. model to which Payne referred is envied around the world, claiming, “I know that producers in several countries are looking to achieve terms of trade similar to those in the U.K.” However, this is not how Power’s Bodle sees it. “Several years ago,” he recalled, “there was a lot of toing and froing with PACT (the U.K.’s trade body for independent producers) over who was allowed to keep what rights and when. But,” continued Bodle, “Those discussions have become largely irrelevant in today’s market. For one thing,” he went on to explain, “Most producers have realized that they are not distributors and that it makes much more sense for them to get their rights out there with a specialist distributor who knows the market for their product and will do a good job of getting them the best price for it.” Bodle also pointed out that, “the question of retaining rights is very different in the U.S. and Canada from Europe. In the U.S. and Canada,” he explained, “there are vast secondary broadcast and DVD markets that can cap off the deficit in a way that is not possible in Europe.” Although he does accept that, “accessing these markets does mean pushing your content through a studio, and this can make it very difficult to retain rights.” For all of the contradictions and apparent complications, maybe the answer to the question ‘whose rights are they anyway?’ can be found in a paraphrase of former U.S. president Bill Clinton’s famous observation, “It’s the money stupid!” BJ V I D E O • A G E OC T O B E R 2 0 0 8 48 P r o d u c t i o n & F i n a n c e Whose Rights Are They Anyway? Power’s Crusoe will soon air on NBC in the U.S. Justin Bodle of U.K.-based Power FremantleMedia’s Mark Gray
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