REALITY CHECK: A FORUM ON DOCS AND TRENDS
Real Screen
May/June 2005

"Is 'the deal' damaging the doc biz?"

Gone are the days when deals were sealed on the strength of a handshake. Today, programs are more complex and so, too, are the contracts. The demand for teasers, talent deals and insurance coverage can drag negotiations on for weeks and sometimes months. Have things gone too far? As the saying goes, time equals money. Is the process of getting factual programs into production eliminating the profit margin?

Michael Hoff
President & Executive Producer
Hoff Productions, U.S.

The longer it takes to get a deal done, the more it's costing me. When we sell a show to cable networks, there's no money for development. Nobody cares that you were setting up budgets and updating treatments for two years, and spent money creating the concept and fine-tuning the research. That's never shown in the budget, it's just the cost of doing business. On paper, our production fee and our margin is 10%, but they never give us money for what are often our real overhead costs. Our true margin is five percent. To run a five percent margin business is very dangerous.

[Also], shows are becoming more complicated to produce. We're dealing with third entities a lot of times, whether it's another company or a talent. In the case of a reality show, you might be dealing with a complex logistical or legal situation. The additional insurance complications make everything take forever. And networks now, DCI in particular, are very concerned about locking up talent. That has become a whole new parallel negotiation. A really fast talent deal takes four to five weeks.

The newest stage is everybody wants video, or tasters. Sometimes they're paying for it and sometimes they're not. The truth is, you're always putting in more money than you get back. Demos are loss leaders in order to get the business. You're trying to get a series, where you hope you'll make the money, but this can backfire. Should I give out [that value] with such a limited guarantee?

As a producer, I have to become more and more clever about how to produce value and good product for less cost. One of the big challenges for me right now is, is there really more money to be made doing volume versus doing a handful of shows? The cost of creating infrastructure to do high volume is expensive.

Kimberley Brown