Profit Participation a/k/a Contingent Compensation
Explain the difference between "net receipts" and "gross receipts" in the context of a profit participation statement provided by a production company to a profit participate (i.e., talent)
"Net Receipts" is the amount of money left after "all" deductions are applied by the production studio before paying out a profit participant.
Gross Receipts is the amount of money accumulated before "any" deductions are applied by the production studio.
Name 2 Key distinctions between a mini-writer's room and a traditional writer's room
The mini-room is smaller
Starts before the show gets ordered to series
What is the ATA?
The ATA is a collective of more than 100 talent agencies, but the most important are known as the Big Four: Creative Artists Agency, William Morris Endeavor, United Talent Agency, and ICM Partners. Together, these companies dominate the industry. CAA, WME, and UTA alone “account for almost 70 percent of WGA members’ earnings,” according to the Guild.
Per Sarah Stern, what are the average per episode budgets for a broadcast network comedy and drama series?
Network dramas: $4.5M per episode
Network Comedies: $3.5M per episode
What are affiliate fees?
The fees that an MSO and MVPD's pay basic cable networks to carry their channels
What are stacking rights?
A TV network is said to have in-season stacking rights when it obtains the right to stream all episodes of a series' current season on its digital platforms. It's common for TV nets to make only a “rolling five” available – i.e., the five most recent episodes.
Primary difference between upfront compensation and profit participation?
Upfront compensation is "guaranteed" and profit participation is "contingent" on there actually being profits
Based on the article entitled "Why its Harder than Ever to Make it in Hollywood": Before the rise of streaming, broadcast network shows ran for #_____ of episodes and now streamers like Netflix and Amazon are running for #____of episodes.
22 and 6-8
How is a standard talent agency package calculated for a TV project?
3% of the base license fee
3% of the base license fee deferred and paid out of the net profits
10% of the MAGR or contingent compensation on the series
What is the identity crisis Comcast/NBCU is dealing with right now, according to Sarah Stern?
Trying to decide if they want to work only within their universe of media companies owned by them like Disney/ABC (with regard to Hulu and Disney +) or to engage outside their ecosystem to sell and collaborate with other companies like Netflix is doing with other studios
What is the difference between an MVPD and OTT service?
And what are the 2 key differences between programming provided on a major streaming service like Amazon versus a programming provided on a FAST Network like Xumo?
An MVPD service is provides cable channels through a physical transmission pathway (e.g., coaxial wire) and an OTT service is provides content over the internet without the MSO (cable network carriage company like Comcast).
The OTT does not provide or control a transmission path (meaning you get the content without a subscription to a cable provider).
FAST is delivered linearly and the content is usually old licensed shows and movies
Streamers like Amazon focus on original content delivered VOD (without commercials).
What is an overall deal?
In an overall deal, writers/producers must exclusively develop all of their material under the network/studio they have a contract with. The company engaging talent under an overall deal pays a large some of money for this type of exclusivity.
Difference between a distribution fee and a distribution expense
The fee is an amount charged by the studio for providing the service of distributing the content. The expense is the cost they incur to provide that service.
Based on "Sarah Stern's" advice, which kind of programming services is the best place to sell your comedy series (cable, broadcast, streaming, FAST Networks)?
Comedies don't sell well internationally so it's better to sell your comedy to a streamer (versus a cable or broadcast network) because you'll get a bigger up front fee for the show since they will buy out the residuals and you can't anticipate that kind of revenue for the show from a broadcast network sale.
Which major talent agencies own a production studio?
WME, CAA and UTA
What are 3 primary revenue streams for a tv series produced by a studio beyond its initial license of the series to a network?
Foreign Format Sales
Syndication Revenue
Foreign Sales of the Episodes/Series
What new areas of business are the MVPD's getting into to make us for lost revenue from cable subscribers?
Comcast is starting to get into the hardware space by launching their own TV's soon (like Goggle's and Roku's TV business).
What is a first look deal?
In a first look deal the network/studio is given the first right to acquire the material you've developed as a producer or production company (before any other company gets pitched your idea) in order to produce it as a series or movie. If the network/studio turns down the producer/writer, the he/she is free to shop the material elsewhere and try to get it picked up.
Define and explain what an AGR, MAGR (or MAG) definition is?
Modified Adjust Gross Receipts definition is essentially a net participation (or net profits definition) with negotiated "deductions" to the participant's share that will be less burdensome than all the deductions being applied before paying out the profit participant.
What period of time is considered "pilot season" and "staffing season" on a Broadcast Network show?
Pilot Season - Jan through March
Staffing Season - April through June
Which talent agency is a publicly traded company?
WME
How many seasons does it take before a network tv series is almost guaranteed to becomes a hit?
3 season because its then achieved enough episodes for syndication revenue
What are carriage deals and how are carriage fees calculated?
Basic cable networks (AMC, Freeform, etc.) do a revenue split with an MVPD based on number of users subscribed to the cable provider or satellite provider (e.g., Comcast or Dish pays the cable network "per user" receiving the channel), so the cable network may get anywhere from a penny to $12.00 per user for every market that the cable/satellite provider is available in.
What's an output deal?
In an “output deal,” a studio grants a tv distributor the exclusive rights to distribute the producer's films/tv shows, in certain media or territories for a specified term (in exchange for a large fee for the content)
Above the Line
What is a "favored nations" provision?
A provision that ties the compensation the talent is receiving to the amount of compensation being received by another talent on the project (e.g., if X compensation goes up $10K, then Y's compensation must be increased by the same amount).
Based on the outcome of the WGA's battle with the ATA, what are the 2 key changes that the agencies are required to make that will impact their business models
The sunsetting of agency packaging
Divesting ownership in their affiliated production companies so that their share of those companies does not exceed 20%
DAILY DOUBLE - WHAT IS AN Imputed license fee?
The amount of value "assigned by a studio" for licensing the show to a network (even though the studio is not receiving any cash for the show) when a studio and network is owned by the same parent company ("AMC and "AMC Studios" - Walking Dead Fight).
What is the Netflix business model for financing a show compared to a traditional network tv financing model.
Netflix pays the studio producing the show the entire budget upfront and provides the studio with a premium payment on top of the budget (i.e., they cover the cost of production plus a percentage of the budget in addition), which is a "cost-plus model."
Traditional network financing a show will pay the studio a license fee that's a portion of the overall budget (e.g. 1/3rd) for the domestic rights but then allow the studio to keep the international distribution rights to make up the money they need to finance the budget, which is called a "split rights deal."
What is the difference between an overall deal and a first look deal?
The key difference between a "first look" and an "overall deal" is that with a first look, writer/producer generally retains the copyright to the material that they created rather than the network/studio owning it based on the large fee they are being paid.
This is why First Look deals usually result in smaller amounts of money to the producer/writer compared to overall deals.