Are you a Utah Filmmaker™? Join our Facebook group!

Thursday, October 10, 2019

Thoughts on film budgets

Budget breakdown for "Excursus"
A short film by the author—
with which he proposed to
his wife (who said yes).
One day, I was on the set of a corporate production and around lunchtime I was sitting with some of the crew members, talking shop. A newer member of the crew was asking one of the veterans about budgeting for a production. With appetites growing, catering and craft service was used as an example. Crafty can be budgeted by setting a dollar amount per day per person on the cast and crew. Allot $10 per person on a small 10-person production and your craft service budget will be $100/day. You’ll certainly want to be more generous and flexible when it comes to catering meals, especially if you opt to hire different caterers throughout the course of the shoot to add some variety to the menu. Productions—regardless of what they’re shooting—are often judged by the quality of their craft service and catering. In my budget template, “Comestibles” (Food) is the first item “Below-the-line” for that very reason.

Another question that was asked was, “Where in the budget can you most easily save money?”

Frugality, when budgeting for any film is always wise but I’m of the opinion that before one asks, “where can I save money?” One simply needs to become informed as to what the standard rates and fees are in order to properly estimate the required budget for a production. This is especially true if one is producing a project for a client. The client could be a business investing in a television commercial, or it can be an investor backing a feature film.

Knowing how much production services cost—and not forgetting that one needs to include their own fair wages—is essential to making a realistic budget estimate. When the client inevitably asks, “Can you do it for less?” the answer should never be “Yes.” It should be, “Only if you want to change the scope of the production and lower your expectations.”

Once production is rolling, and one has a defined budget for what they have been contracted to do, opportunities to save money may certainly present themselves. However, the way one saves money on a production and how one uses that savings should be informed by ethical business practices and the law.

Unfortunately, it is not uncommon for budgeted productions to request “volunteers” in front of and behind the camera, regardless of the fact that the practice is illegal. A producer may justify this practice—called “wage theft”—for any number of reasons, from saying that they’re “saving the client money” to trite appeals to artistic egos but it doesn’t change the fact that the practice opens up the production (and the client) to some severe legal ramifications that could cost much more than the savings envisioned by using unpaid labor.

In the case of productions that expect to take advantage of government-funded film incentives, the motivation to "save money" in the short-term negatively affects not only the people convinced to work for free but the bottom-line of the production itself.

If a project is approved for a film incentive rebate of 25% based on their commitment to spend at least $1 million dollars in the state, cutting corners through wage theft will directly impact the amount of money they would receive for their rebate.

For example: getting 100 people to be free extras for a simple crowd scene might save the production $10,000 for one day but NOT spending that money can, at best, shrink the production's rebate check by $2,500. Or worse. When all the receipts are counted, the budget has been properly audited and it turns out that not paying extras that one time was all it took to cut their in-state expenditures to less than $1 million dollars thus disqualifying them for the 25% rebate.

That $10,000 saved on one day of production would wind up costing $250,000. It's not uncommon for producers to count on incentive rebates to fund or at least supplement their post-production budget. And all it takes to screw it up is a short-sighted UPM or Line Producer to make an unethical and illegal decision because they think they're doing their employers a favor by "saving" them some money on a single day of production.

Bottom line, one should never try to save money at the expense of the people that are working for them. If one has given an accurate and fair budget estimate to a client and the client has agreed to it, there should be no excuse for asking—or requiring—anyone to work for less than a fair rate, especially if it means that a budget surplus is only going to be used to inflate one’s own reimbursement for their services as a producer. I can’t think of any producer that has used a budget surplus to refund their client/investor because they overestimated the cost of the production. Being able to make a reasonable profit for the work one does is an essential factor in making fair and accurate budget estimates.

When budget-saving opportunities present themselves, one needs to ask,
“Will any one person be negatively affected by this decision?”
For example: If one has allotted $2000 in their budget to secure the use of a location—based on typical rates for similar locations—and then learns that the owner/manager of said location only charges $1000 or its use. Before popping open the wrap party champaign, the question must be asked
“Will any one person be negatively affected by this decision?”
If $1000 is the standard fee, determined to be fair and worthwhile by the owner/manager, then the answer to the above question is, “No.”

Congratulations! That’s a $1000 budget surplus—assuming, of course, that the rest of the budget balances out at the end of the shoot.

So, what do you do with that savings?

One option of what to do with any budget surplus during production is to simply allot it to the contingency fund. Every production should include a “Contingency” line-item equal to at least 10% of the entire production budget. These funds are set aside from the beginning in order to cover unexpected expenses, and any minor differences between estimates and actual rates and fees for the production.

If a piece of equipment is damaged and needs to be repaired or replaced immediately, so the pace of production isn’t hindered, contingency funds can be used to cover those costs and those receipts provided to the production’s insurance company for reimbursement.

If one has fairly estimated the cost of a crew member’s rate and kit fee and the actual cost is slightly more than the estimate, don’t ask the crew member to give you a discount or to waive their kit fee just to match the estimate. Pay them what their knowledge and experience have determined is fair. Contingency funds exist to make up that difference.

If a new contractor has offered the production a valuable service for considerably less than what has been budgeted only because they’re new to the industry and have not yet grasped the value of their work, before just agreeing to their lower fee, ask the question:
“Will any one person be negatively affected by this decision?”
The new contractor would certainly be affected, even if they don’t realize it. One must also consider that agreeing to that lower fee may result in a budget surplus but it would be unethical and potentially detrimental to the segment of the industry that the contractor represents. Undervalued services often result in more knowledgable and experienced contractors having to lower their rates in order to be competitive while hurting their ability to make a living at what they do. So, it isn’t just one person being negatively affected, it has the potential to affect an entire segment of the industry. So, the answer to the above question is “Yes!”

It’s also important to remember that, in this scenario, we’re working within an approved budget. The funds are there to compensate cast and crew fairly so there is no excuse to exploit someone’s naïveté in the interest of “saving money” that's already been earmarked for necessary expenditures. The client has already agreed to the amount, fully understanding the inherent risks involved in such an investment. Worrying about the risk that a client is taking is not part of the producer's job description.

There are already too many established filmmakers that approach budgets with a “scarcity” mentality. Being knowledgable about the value of the work that goes into a production and standing firm with clients/investors about having realistic expectations when it comes to appropriate budget estimates will help ensure that the work is valued and respected.

The contract may still go to the lowest bidder, but at least the difference in cost will be based on reasonable variables in an estimate and not a deliberate effort to undercut the competition and devaluing the work.

Joe Puente
Founder/Administrator
Utah Filmmakers
_____________________________________________

Utah Filmmaker(s)™ and UFA™ are trademarks registered with the Utah Department of Commerce Division of Corporations and Commercial Code, Registration Numbers 10706542-0190 , 11025542-0190 and 10502093-0190 respectively.