Producer Handbook: Frequently Asked Questions from Producers

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Frequently Asked Questions from Producers

“On what dates should the agreement start and end?” (defined as the “Term”) – The start date should be the date that the first budgeted expenses were incurred by the producer and the end date should be the date of expected completion of services by the producer.  It is not unusual to have a start date that “predates” the signature date of the agreement if the producer is incurring costs/undertaking approved production activities.

 “I received funding for production only, not post-production.  Why does the contract require me to deliver a completed production?”  When a producer receives funding for production expenses, the funding is contingent upon the producer completing the production in its entirety.  The reasoning behind this requirement is threefold:  (i) during the production phase, the producer will secure all of the elements (e.g., footage, releases, etc.) necessary to complete the production (put it “in the can”); (ii) the producer has secured or is in the process of securing any funding necessary to complete the production; and (iii) NAPT is funding the production at a key stage and must protect its investment by requiring completion and delivery of the production as a condition of full funding.  This is a non-negotiable term.  The producer may use NAPT funds to cover both production and post-production activities, so long as such expenses are included in the budget.  The producer is not precluded from seeking additional completion funding from NAPT.

“Why must I report and share in revenue with NAPT for 15 years?”  The 15-year reporting period is a requirement of CPB and is passed on to producers through NAPT in its funding agreements.  The 15-year reporting requirement was formalized in a Resolution passed by CPB’s Board of Directors several years ago and is not a new requirement. This term is applicable to all agreements – R&D, Production, Completion and Webisode agreements. This is a non-negotiable term. 

“Why must I give NAPT exclusive public television rights?  What if I receive money from ITVS and ITVS requires those rights as a condition of funding?”  As a funder of public television productions, producers must provide NAPT with exclusive public television rights to secure its interest in/rights to the program – this right guarantees that the program will be available exclusively for public television broadcast.  CPB also requires that NAPT secure the exclusive public television rights to protect its (and CPB’s) financial investment.  NAPT’s funding of a program, presentation rights, and exclusive public television rights will not preclude funding from ITVS, CPB, PBS or other public television sources . . . generally, the agreements of subsequent funders will reflect that NAPT holds the exclusive public television rights.  Furthermore, if a producer has already contractually assigned the exclusive public television rights to another entity like ITVS prior to seeking NAPT funding (and provides a copy of the signed contract), NAPT will consult with ITVS and, if merited, will amend its contract to reflect the rights held by ITVS.  Additionally, PBS now allows for “co-presenters”, and in many instances, NAPT and ITVS consult with each other and work together regarding presentation rights and activities. 

“Why must jurisdiction be in California (LPB), Nebraska (NAPT) and Hawaii (PIC)?”  The jurisdiction of an agreement specifies the laws of the state that will govern the terms of the agreement in the event of a dispute and/or lawsuit between the parties.  Since NAPT funds projects in all 50 states, it would be quite risky and expensive for it to be subject to the laws of all other states.  As a funder, NAPT’s policy is to maintain venue in the state of its incorporation.  This is a non-negotiable term due to NAPT policy and out of fairness to all producers receiving funding.  The only exception to this requirement is when NAPT funds a public television station that is a licensee of a state university – state universities, which are part of state government, traditionally cannot be subject to the laws of any state except the state in which they are based.  Therefore, when NAPT funds a station licensed to a university, we may delete the jurisdiction provision entirely, thereby leaving jurisdiction “open-ended”. 

“When do I need to secure Errors and Omissions Insurance?” E&O insurance should be secured after completion of the production but prior to any distribution of the production.  The E&O policy should cover any intended distributions of the production (e.g., to the home video market), and it must cover the broadcast of the production over public television (with NAPT and CPB being additional named insureds).  A copy of the E&O insurance binder is now required as a final deliverable prior to the making of the final payment under any funding agreement or acquisition.   In the event the producer intends to distribute the production in other markets (e.g., film festivals, DVD) or the NAPT member also acquires additional distribution rights (e.g., podcasting), the E&O policy must cover each of those distribution methods.

“Why does NAPT have approval rights over my deliverables, budget and work scope?”  As a funder, NAPT has an interest in the production.  NAPT’s interest includes approval rights to ascertain that the production stays on budget, meets certain public broadcasting standards, and conforms to the original proposal submitted by the producer, among other things.  NAPT also has contractual obligations to CPB, which receives its funding from the federal government.  CPB’s receipt of federal dollars is conditioned upon a number of obligations, including oversight of production budgets and complying with federal laws and regulations.  These obligations are passed on to NAPT when it receives funding from CPB.  The approvals specified in the agreement reflect its obligations to CPB as well as its own corporate policies and Board requirements.  The approval provisions are not negotiable.

“Do I need to work with a fiscal agent?”  Whether or not a fiscal agent is required is at NAPT’s discretion.  It is advisable to require a reputable fiscal agent for a “first time” producer, multiple producers co-producing a project without an umbrella corporation or for a producer who has a history of producing great television programs but difficulty keeping accurate financial books and records.  Fiscal agents generally take a percentage “off the top” to administer a production, and that percentage is on the rise.  I recommend that a cap of no more than 10% be allowed for a fiscal agent of a public television production.

“How is NAPT’s share of net revenue calculated and is it negotiable?” The standard revenue share in the agreement is the minimum amount NAPT may request, is a policy set by CPB’s Board of Directors and the minimum share is not negotiable.  The share is based on NAPT’s total contribution to the production’s total budget (including R&D and completion), which is then multiplied by 50%.  If NAPT provides both R&D funds and production funds, its share will reflect the combined funding from both agreements. A calculation and example is provided in the Exhibit entitled “General Terms and Conditions. In certain instances, NAPT may share in additional revenues from the production if it serves as a distributor of the production to ancillary markets (e.g., home video, foreign broadcast, educational), but these rights are negotiated by way of a separate license agreement with the producer.  NAPT may request a revenue share that is greater than the minimum amount required by CPB, but cannot agree to a lesser amount.

“Why do some NAPT members ask for distribution rights (home video, etc.) to my production in addition to public television rights?” As a funder and distributor, NAPT is uniquely positioned to distribute its funded productions into markets beyond public television.  NAPT has developed contacts and distribution channels that are difficult for any one producer to duplicate.  Whether or not NAPT secures such rights is negotiable, particularly in instances where the producer has already “pre-sold” ancillary rights to pay for production costs or where the producer’s ability to secure such rights (e.g., paying step-ups, residuals or additional licensing fees) for ancillary markets is cost-prohibitive.

“Why does NAPT have approval rights over any decreases or increases in the total production budget and why does it limit budgetary reallocations between budget categories in Exhibit B?”  These requirements are required of it by CPB and are not negotiable.  These terms have been contained in public television funding agreements (including those from CPB and ITVS) since the mid 1990s.  These requirements exist to protect the financial investment of the funder and to ascertain the funds are being used by the producer prudently and appropriately.

“If NAPT cannot secure a national public television release of my production, why do the rights not revert back to me automatically?” NAPT is not only a funder, presenter and distributor of public television programs, but it oversees the use of funds allocated to it by CPB.  As such, an automatic reversion of rights might not be in its best interests, those of CPB or the public broadcasting community. In certain states, the automatic reversion might also run afoul of state laws or impose tax or other financial obligations on the NAPT member and/or the producer.  NAPT is open to discussing and negotiating a reversion of rights on a case-by-case basis, subject to CPB’s approval.  This is a CPB required term and is not negotiable.

“Why does NAPT have prior approval over any presales or ancillary sales of my program and over program funders?”  In order to protect its investment in the production and to ascertain that the production meets all applicable public broadcasting standards (particularly those limiting underwriters and their messages and payola/plugola requirements), NAPT has approval over any party that is contributing money to or securing rights in the production.  Although CPB may not make these requirements of producers in its own CPB/producer agreements, it does impose this obligation on each NAPT and it is thus passed on to producers.

“Why do some agreements require that funds be kept in a separate account?”  In order to facilitate financial reporting and audit requirements, to limit any co-mingling of funds with general business/other production funds, and to comply with industry and accounting standards, NAPT requires that producers establish a separate bank account/production.

“Why does the agreement require that I clear/provide six (6) public television releases in four (4) years?  Certain public television distributors only require four (4) releases in three (3) years.”  NAPT is contractually obligated to secure six releases in four years for each production.  In the event CPB waives or limits this requirement, any decreased term/benefits will be passed on to funded producers with existing NAPT agreements if allowed by CPB.  However, for purposes of production, securing releases and budgeting, producers should secure “6/4” unless specifically authorized under a pre-existing agreement between the producer and PBS or APT.

Why must I secure music rights for webisodes and not for a public television program?  For non-commercial public television broadcasts, most music is covered for use under a compulsory license and voluntary licenses negotiated by PBS for publishing and sync rights.  Producers must submit music cue sheets to NAPT/PBS, which then makes payments to the music publishers, Harry Fox, etc. for use of the music in a public television broadcast.  It is important to note that not all music is covered for broadcast (e.g., dramatic rights) and producers must directly secure music rights for other distributions of their production (e.g., home video).  The distribution of programming over the Internet poses a new set of challenges and requirements for music rights.  In certain instances (e.g., streaming), music rights may be covered under the existing PBS agreements, but no legal opinion has been issued to confirm this.  Conversely, podcasting is not covered under existing PBS agreements.  At this time and given the various types of distributions for webisodes by NAPT(including podcasts), NAPT requires producers to clear music rights to ascertain that the production is fully cleared for distribution over various Internet platforms.