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Budgeting for a new shoot? Use these 10 tips to fight production inflation.

No matter what you are shooting today, film and TV production environments are more competitive than ever.  Cost pressures are mounting, and producers need to look at every line item in their production for savings. 

Filmmakers continue to contend with increasing marketing expenses and talent costs. 

In the case of scripted television, for example, some industry reports indicate that budgets have increased up to 15% over 2016.

Unscripted TV is feeling the squeeze too. In a recent Variety article, ITV America CEO Brent Montgomery said budgets are so tight that a producer’s fee may not be even 10% anymore. “Often it gets down to 6% or 7%. A company needs to be doing eight or 10 series to stay afloat now, and that’s not going to create a vibrant market.” Montgomery, along with many other industry experts, believes we are experiencing a pivotal moment in the production business: “Right now, we’re at the crossroads of the business model breaking. It’s a really difficult time to be a small company, and even though I run a big company, I’m quite interested to see what happens to these small guys, because they quite often create the next hit show that feeds the entire ecosystem.”

So, what can producers do to manage costs in this incredibly competitive market?  Consider these critical issues as soon as you start to create your production budget for a new project. They’ll help steer you in the direction of a strategic, well-managed cost structure and away from ballooning, unexpected expenses as you move forward.

 

Here are 10 ways to fight production inflation:

  1. SUI and Workman’s Comp rates are variable in every state. Each state has a minimum SUI rate, for new employers and a maximum SUI rate, for some established employers. These SUI rates range from 1.00% to as high as 14.30%! Visit the Secretary of State’s website, in the state you are filming, to see the posted rates by job classification. Being overcharged is an easy mistake and more common than you think. Do your research in your budgeting stage. 
  1. If your production is working under the various union contracts, make sure you understand the different tiers and the implications of going into a higher tier. In many cases, jumping into a higher tier could add $500,000 to $1,000,000 to your budget in higher labor costs, employer tax burden, and union PH&W. For non-union shows, knowing the labor laws of the state in which you are filming, and when overtime rules begin, is paramount. Some states have daily overtime regulations where the employee is paid time and a half after 8 hours worked, while others are based on a weekly aggregate, usually beginning at 40 hours worked. Some states even have meal penalty laws for non-union employees.
  1. Hire an experienced Line Producer and 1st AD; they will make or break your shoot. And they’ll get the crew that works well too. Experience may seem expensive at first, but inexperience will cost you more in the long run. 
  1. One of the most important areas not to skimp is accounting. Hire an experienced Production Accountant and at a minimum one 1st Assistant Accountant. When every penny counts, you need to know as early as possible where they all are going. Find problems before they find you!
  1. Reducing the amount of OT scheduled is a tried and true way to save. OT regulations vary by state, but in general it’s 1.5x for almost all non-union OT hours. And for union work, it’s important to know the rules. Avoid going beyond 12 hours in a shoot day. Five hours beyond 12 is a full double day! At 12 hours, you're also due a second sit-down hot meal, and this will delay your wrap and possibly affect your morning start.
  1. Consider the size and duration of your project when planning a 6-day week. Sometimes, what you think you're saving in equipment costs is eaten up in 6th day costs and creates a slow, tired crew. Projects with shorter shoot schedules tend to benefit the most from a 6-day week.
  1. If your budget is trending high, simplify your script, locations, cast, extras, set dressing, props and picture cars.  Stunts and special effects should also be included judiciously.
  1. Switching to Pre-paid Visa cards eliminates handing out petty cash and will save you time, money and help prevent departmental overages. 
  1. Eliminate paper, use a paperless digital workflow. Retrain your brain. You’ll save on ordering reams of paper, as well as the time it takes to distribute all of it, plus the trees will thank you! 
  1. When you can’t go 100% digital, you can still scan, file, and distribute digitally.

 

For more information on how to go paperless for payroll, timecards, and production accounting, along with fully integrated tax consulting and business services for all types of TV, film, and digital productions, we invite you to check out GreenSlate, a leading provider of entertainment payroll and business services.

Do you have more tips for managing production costs? Share them with us in the comments below!

GreenSlate
28 July 2017

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