SPAA NEWS

25th June 2009

SPAA DOCUMENTARY  UPDATE - JUNE 2009

On Wednesday 17 June, SPAA met with Screen Australia to discuss documentary issues.  The broad agenda concentrated on terms of trade, producer offset issues, NDP, streamlining legals, completion guarantees, and reversion of rights. 

SPAA is already in discussion with Screen Australia on terms of trade across all genres.  Documentary members’ main concerns are about allowable recoupment and equity positions in the last iteration of Screen Australia’s terms of trade.  This is being addressed in the broader discussion with Screen Australia across all genres.  SPAA has asked for a number of matters to be clarified, in the next two weeks. 

As members will be aware, tax acquittal has been a main item on the agenda; SPAA has lobbied our Ministers, the ATO and Screen Australia to try to get a legislative fix: a short term solution to industry will be forthcoming from the ATO in the next few days, which should offer the opportunity for producers to liquidate SPVs and thereby submit final certification documents to the ATO at various times when projects have been deemed completed.  This removes the necessity to wait until tax lodgement at the end of each financial year.  A main SPAA bulletin will be posted once the outcome is known. 

The general consensus at SPAA and at Screen Australia is that a legislative fix can’t be counted on for the future. However, SPAA will continue to lobby for the preferred position, which is for producers to have the capacity to acquit when projects have been completed at any time during a financial year. 

Screen Australia will give advice to industry on matters relating to SPV liquidation once the ATO’s position has been received, as will SPAA, but once members have the ATO advice, they should also consult their own legal representatives. 

Documentary Councillors outlined their experiences with banks and cash flow lenders; it is almost impossible to attract lending facilities for either single or aggregated transactions less than approx $1.5m, which leaves documentary producers who do not have access to state agency cash flow facilities with one recourse – self-funding the Offset.  Ironically, the more production activity, the more producers are required to mortgage their own assets, which are of course finite. There is no immediate solution to this dilemma, unless banks can be persuaded to change their attitude to smaller loan requirements.  This is a considerable drain on already low producer resources. 

Assessment of NDP projects will be undertaken internally by a Screen Australia Committee.  With regard to the Film Library, it will be administered internally instead of the NFSA as originally envisaged.  Screen Australia is in the middle of a costing exercise; there are no additional funds allocated to the administration and maintenance of the library.  The curatorial aspect of maintaining a body of work in and for the nation is important, but is also costly.  SPAA raised the issue of stock footage sales and future exploitation to be controlled by producers /rights holders, and suggested that there would be more incentive for producers to exploit their own footage if these rights were outside of normal investment rights in PIA. 

With regard to the budget breakdown for factual programming in the coming financial year, Ross Pearson outlined the top level Screen Australia budget breakdown, which has as yet not been publicly released.  Factual programming has an allocation of $15m. 

Screen Australia will circulate a position statement on the NDP which will address all the points raised by SPAA. 

Screen Australia plan to streamline their legal templates for documentary contracts.  The intention is for Screen Australia to develop a new contract for both ABC and SBS, containing standard terms and conditions, with schedules appended for each project.  Various state agencies would have the option to clip on to these agreements where appropriate.  All agreed this would save valuable time in the contracting process for documentary, which has been a source of frustration over the past few years. 

SPAA Documentary Councillors feel that there is no need for completion guarantees for each documentary project.  On some series, the guarantee is around $80-$90K, and is considered dead money, particularly as many overseas broadcasters don’t see the need for a guarantee.  Screen Australia is in broad agreement, but does not want to assume the position of guarantor in place of bond companies, nor can it be exposed to cover the shortfall in case of non-delivery or default.

There was discussion of some options for the future, including a discretionary process where some producers can self-guarantee, and an optional guarantee where Screen Australia is satisfied that bonding is not required on individual projects.  SPAA agreed to put a paper to Screen Australia with various options, and concentrate on best practice overseas, which is at odds with the prevailing system in Australia. 

The Screen Australia Board will not consider retrospective reversion of rights prior to 1 January 2009, nor at this stage will they consider altering the period of 7 years reversion.  Documentary members would like to see retrospective reversion of rights for all projects prior to Jan 1 2009.  

Reporting and accounting beyond this period of time places administrative burdens on both the agency and production companies, particularly when producers are being asked to report on minor sales activity on projects 10 years old and over for often as little as $100.  Screen Australia indicated that they would like to reduce their administrative burdens too, and to that end, there is already a system in place where projects that are considered to be at the end of their earning cycle, or are anticipated to have no/very low returns are considered to be in ‘passive recoupment’, and there should be no reporting required for smaller amounts.  Screen Australia agreed to discuss with the relevant recoupment officers. 

SPAA asked Screen Australia for support to increase broadcaster licence fees for documentaries with international financing components.  SPAA is near conclusion of terms of trade with the ABC and are resuming negotiations with SBS.  Screen Australia will provide support where possible. 

It was a positive and productive meeting, with the following actions:
SPAA to present a paper to Screen Australia with some suggestions and future options on completion guarantees.  Screen Australia to circulate a paper outlining the operation, assessment procedures and budget allocation for the NDP from 1 July 2009.   SPAA is to have regular meetings with Screen Australia in future the day before SPAA Council meetings.