Starting a production co- I have questions...

sputnikslim

sputnikslim

Active member
Finishing up a spec children's pilot soon with a very good chance of going into production . I am the rights holder for the property and do have a lawyer. Can't be any more specific on details and have a number of general questions. I have the loose groundwork laid to do the production as a possible co-production with an existing company (with my new formed company) or, my new company would contract with them for specific filming/post tasks. I understand budgeting for the different aspects of a program but was curious as to what profit margin to strive for when preparing said budget . Say for example, on a budget of 100k per episode, what approx. percentage would stay with the house (prod co) after all is said and done? 2-3%? Less, more? I will also be directing. What would I get paid as the director?
I'm making a number of wonderful contacts thru this process but would like to go into "the room" with my own thoughts. I've run businesses before but not in this arena.

Has anyone done this before?

Can anyone recommend a great book/articles on the web for assembling a production co just so I can get some good background info?

Thanks
 
There are no percentages. You set those.
You'll pitch the pilot and when you make the deal, you'll simply agree on terms. It's up to you as the producer to alicate that budget, maintain production quality and feed your family. Short change the production and it'll be a very temporary gig. Short change yourself and the mrs will put an end to the production.
Thats it, really. I have never gotten into percentages of figures that will never be what was planned.
My biggest advice is to be careful in the pitching process. If you have an agent for this, cool. done. If you are pitching this yourself, know the old 10 nos for every yes was for the agents and that you will be getting about 50 nos for every yes. Be very careful of the releases you sign to get that pilot in fron of programming depts. Many networks accept unsolicited material with releases and these are the ones that specialize in creating new shows without having to have a think tank.
I have a childrens show I was pitching about 12 years ago:
http://grinnerhester.com/snerk.html
PBS was willing to air it but I can't afford to do free stuff like I use to. Nickelodeon called me back twice telling me they are still kicking it around, then I got the ole no thanks letter.
My little girl is 12 now. Thats her.... the baby in the open.

aaawwwww
 
Thanks grinner. Lots of good advice. Any good/great books that you can suggest? Snerk looks like it was fun to put together. We have puppets & animation.
So, PBS was willing to broadcast your pilot/series but not fund production? My daughter grew up in an instant as well- blink and yours will be 20!
 
Before you invest money in creating a pilot, you need to understand who buys television series' and why.

Research MIPTV & NATPE. Go to both of these. Walk around. Look at the booths. Pretend your a buyer from a territory. Ask them to pitch you. Ask them how sales are going. Go to the various parties and speak to buyers.

If you don't do this you'll lose a tremendous amount of money.

Selling a TV program is far more complicated than selling a feature film. It's also far more lucrative...but, you'll lose your shirt unless you intimately know the details of MIPTV and NATPE.
 
Thanks Prodigal-
Have been to NATPE twice, once as a walk around attending meetings and once with a booth. Made many contacts and was in talks with the WB and a couple other firms, however, nothing came of it. On to our new project with much broader appeal with a much better chance of being accepted. Also, I am now in the position to produce and direct the programs thus eliminating a stumbling block that we had before. Mostly looking for advice on setting up a prodco and how the money works. Would love to find a book (quickly) that lays out what is reasonable to expect profit-wise for the prodco. How much do they make? How much does a director make on a children's series?

Also, for anyone with a project with series potential, I can't recommend NAPTE enough.
You are in the same room with all the executives that are impossible to reach thru normal channels. I have over 100 contacts (business cards) that came into our booth and showed interest. Yes, it is expensive for a booth but the walk around fee is quite reasonable given what you have access to. When our pilot is finished, we will be knocking on some of those doors.
 
I was in a situation similar to yours, and the production company I was partnering with was asking for 7%. I was also going to pay them a separate fee per show to do graphics and post.
 
Thanks trh. Spent the weekend reading a very good book titled Producing Animation by Winder/Dowlatabadi. It is filling in a lot of the blanks for me but no real info on wages.
It is interesting that in the chapter called The Development Process, it appears that we have done a good many things right. It would have been great to have this info beforehand though.
 
Well on a music video for a record label, given a substantial budget at least, production company takes a standard 15% markup on the below-the-line costs of the project, director takes 10%, producer 5%. So there's an overall 30% markup on whatever the cost is. If the cost is $100,000, $30,000 is added on top of that to pay those three areas, bringing the budget (cost plus above-the-line costs) to $130,000. In this case I have no idea what the production company would take, but I wouldn't want less than 15% ever. That's just not acceptable. I don't care what the budget is, 15% is required, especially for larger companies with office expenses, employees, paperwork, computers, mail expenses, transportation, lunches, etc. There are a lot of expenses for a production company, so 15% isn't actually "profit," anyway, because a fair portion of that has to be paid towards expenses. Not to mention the company is taking a risk with every project, and thus deserves the rewards that go with taking those risks.

We adjust these percentages on smaller projects. I can't take 10% as a director if the budget is only $6,000, screw that, I have to make $1,000 minimum. The by-the-book numbers work better on real budgets, like $50,000 and higher for shoots less than a week, and $500,000 and higher for a feature, etc. Then it's more reasonable.
 
Thanks Jonathan- That helps a lot. I figured there were some general % numbers out there and that's what I need at this point. I understand all the variables that come into play but it's nice to get this general idea. Thanks.

This reminds me in a way of the Seinfeld episode where Kramer spills hot coffee on himself and in the lawyer/coffee co settlement meeting, he jumps on the first thing they say, and ends up with a year's worth of free coffee (instead of the large $$ award that they were also going to offer/negotiate in addition to the year's free coffee).
 
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