Ali Brown: Late Payments “Putting Tremendous Strain on Production Companies”
'Money Talks' is a new interview series, created in partnership between Little Black Book and SYZYGY, that is set to bust taboos by shining a light on the role of finance in production.
We’ll be speaking to leading producers and production company owners about the financial pressures they face day-to-day, and what challenges they need to overcome in order to simply make top-tier productions happen. Over the course of these conversations, we’ll hear first-hand stories from the production frontline and get a little more comfortable talking about that most important of topics: money.
To kick the series off, we are thrilled to welcome Ali Brown, president of PRETTYBIRD. She speaks with LBB’s Addison Capper.
LBB> Something we often hear is that timely payments can be a tricky factor in production. There's a contradiction between the need to obey contract dates when it comes to the shoot but the terms of payment seem a bit more 'flexible'. What are your thoughts on this?
Ali> You have hit on one of the most difficult things production companies face – delayed payments. Once a contract is signed and dates for the shoot are laid out, payment terms are as well. However, we still find ourselves experiencing delays in payments well past the date promised in the contract – so why are shoot dates locked in and payment dates seem to be selectively ‘flexible’?
Production companies can all tell you horror stories of jobs that have been late paying for months and months and there is very little recourse for a production company. With expedited times in post, we can no longer just ‘hang on to the masters’ and we also can’t afford to risk relationships with clients and agencies when the only thing worse than not getting paid on time is them never coming back again simply because you asked for payment according to the contract. It’s important that agencies and clients understand the impact that late paying has on production companies – especially when compounded across multiple jobs. You can find yourself floating a tremendous amount of money – having had to pay all crew, directors, vendors, etc. in order to maintain your contractual (not to mention moral) obligations to them.
Fortunately many agencies and clients are honouring 75/25 payment terms, which helps. But the problem these days is the uptick in requests for cost plus lines as well as more jobs having significant overages now that budgets are bid so tightly. So, even if the final 25% payment is coming in a reasonable time window, it’s the cost plus and overage payments that can be held up for months and months on end. And those are comprised of labour and other costs that have to be paid immediately that aren’t related to the production fee. So, late payments aren’t just causing companies to float their fees, but significant hard costs as well which is putting tremendous strain on production companies.
LBB> There's also the costs that go into bids and treatments, which can impact companies of all sizes. Is this still an issue do you feel, and what is the current status of this part of the production process? Can it ever be changed/adapted?
Ali> Not only is the cost of bidding and treating still an issue, it is a bigger one than ever. We are being asked to do rounds of treating, with multiple revisions and ever-changing creative that requires fast turnarounds to redo treatments entirely. But, even more so, we are being asked to bid multiple versions of budgets across multiple countries, sometimes not even for real scenarios but to justify choices around shooting outside the US versus within. It’s not a stretch to say that just trying to get a job can cost around 10k. We had a job recently that cost 30k just in bidding! Again, extrapolate that across a large roster and the increasing number of jobs that are just being cancelled or bid without having been pre-sold to the client, and production companies are unnecessarily bearing a huge risk entirely outside their control. And it’s easy to change – we can develop a fair system that charges fees in certain scenarios such as the job gets killed, agency requires more than two countries bid, agency requires more than one revision of treatment, the client decides to single bid after directors have been engaged and working. It would be easy to come up with best practices and some agencies and clients are already doing this! When there is shared buy in, we are all happy to do the work.
LBB> PSAs can be great opportunities to be more creative and flexible in approach, and they can also gain great traction. But, they're often done for free! How do you feel about that tension?
Ali> PSAs are incredible when they are done in service of moving people to take action, to learn, to raise awareness. They are amazing when they are creatively free from typical restraints and can make deeper impact with stronger creative while simultaneously advancing a director’s reel. However, when asking companies to do them, please make sure that you’re transparent in the ask. Start with the companies you’ve been giving all your jobs to – they will be more willing to make that investment – or have them tack it onto something you have upcoming and can single bid them on. Make sure that if you say it’s a PSA that it really is – that it can qualify as one with the unions and guilds. Be flexible and realistic about what can be achieved and be an equal partner in getting the favours needed to pull it off. Don’t just ask the superstar on the roster, let the production company stand to gain from the project by using the piece to help build a reel or forge a new relationship between director and agency. Make it a strategic conversation, not an uncomfortable one.
LBB> When it comes to budgeting a production, what’s the most surprising thing that you need to account for?
Ali> I think there is this push/pull between wanting to remove any padding but needing flexibility. We have to budget for unforeseeable changes so we can accommodate creative that is in a constant state of change, but simultaneously we are asked to cut every corner. So we agree to make a number work and everyone says they will work together… until you show up on set and there are 30 people in video village who want Hailey Bieber smoothies!
LBB> And what’s something that’s always forgotten in the budget?
Ali> Prep time! We either aren’t given enough prep time so we have to throw money at the job to make miracles happen within an insane time window, or if there is appropriate prep time given between award and shoot, we typically aren’t able to fairly charge for it as the budget can rarely handle the costs. Yet there is an expectation that work starts the moment a job is awarded. Budgets rarely reflect accurate time and costs around actual prep needed.
LBB> Broadly speaking, how healthy do you think the financial landscape of the industry is right now?
Ali> It’s totally strained. Some budgets are fair, some are impossible. Very little in between. Some countries are quickly learning the business, while locally we are pricing ourselves out of shooting here in California or New York. So the desires of everyone are definitely healthy – production value, day rates, number deliverables, speed of production – but the reality is most of the budgets can’t sustain all of those wants.
LBB> For any production business-owners reading this interview, what’s the best piece of advice you’ve either been given or had to learn first-hand?
Ali> You have to speak up when payments are late. I cannot stand being the one chasing payments down from the same people I’m hoping will give me the next job. I don’t like it one bit. But if you don’t ask the person you’ve been in partnership with to produce the job, it’s easy for the request to be dehumanised when it moves into the hands of those you haven’t been in the trenches with. You become a bill to pay rather than an individual or individuals who are running a small business trying to float funds. So, as much as it may be frustrating to have to chase payments, a friendly note that puts the late payment on the radar of someone who can help and who understands the value of your partnership is key, and ultimately critical, for your company’s financial health. And you’ll find most of the folks on the receiving end of those emails really will try to help in earnest and get you paid sooner than if you don’t say a word.
