If you had co-created the granddaddy of reality series, chances are you’d be hyper-aware when it comes to protecting the rights of your future projects. That’s why Jonathan Murray, president of Van Nuys, California-based Bunim/Murray Productions, the prodco behind The Real World, has updated his negotiation tactics since making the original deal for the show with MTV in 1991. Back then, Bunim/Murray was just getting started, and the deal was cut and dry: ‘MTV owns the copyright to the show,’ says Murray. ‘MTV bought it, and we had participation in various aspects of any revenue that would be generated from it.’
Bunim/Murray has kicked its negotiating skills into high gear over the past four or five years, and Murray says it fights to control at least the international rights to its shows these days. So if Bunim/Murray does a show for MTV now, he says the prodco generally ends up owning the international rights. The real issue for producers, says Murray, who also co-created Fox’s The Simple Life, is ensuring they’re part of the ancillary revenue streams of their shows. ‘That’s the challenge of it – it’s all about trying to control that process,’ he says.
Another negotiating challenge involves tethering the ratings of your hit show to how you’re compensated. John Pollak, SVP of ShineReveille International, the global distribution arm of the Shine Group and home to The Biggest Loser, says Reveille has always set pre-negotiated terms since its inception as a format distributor six years ago. ‘If [a broadcaster is] going to do a second season, there’ll be a five percent to 10% increase, so every year they do another show, there’s always going to be a bump up,’ says Pollak. ‘A lot of times, depending on the show and market, we’ll put in a ratings bonus on top of our license fee. It could be something like $2,500 an episode, or two percent of the budget.’
But don’t bank on these rewards unless you negotiate for them. ‘They’re definitely not an automatic,’ says David Dembroski, a Toronto-based entertainment lawyer who negotiates a lot of deals for unscripted shows. ‘And what you think is a reasonable increase, [broadcasters will] think is outrageous. I think broadcasters will typically be open to increases in line with increases in cost of living; they think three or four or five percent is reasonable, whereas you might want 10%, 15% or 20% or more.’
Dembroski boils it down to the bottom line for producers. As he warns, if you’re only getting fees out of the budget to produce the show and have a very miniscule back-end share of the net profits, you’re not going to make very much money. That’s why you’ve got to sharpen your negotiating skills. So when you pitch an idea to a broadcaster that wants to take all rights, as is often the case, Dembroski recommends asking some basic questions: What’s the budget going to be, and what are my fees as a producer within the budget? In terms of ancillary rights, will I, as producer, get distribution rights for any territory? Who will own and control the merchandising rights and the DVD rights?
You’ve also got to consider the finicky, and increasingly important, new media rights. If a broadcaster wants the exclusive rights for the show’s website, which is fairly common, Dembroski advises you negotiate for a micro-site for the show on your own corporate website. Be forewarned: if the broadcaster agrees, they may only allow you to post two-minute show clips or a limited number of photos. ‘You sometimes get into some real minutia arguments,’ he says.
But don’t loosen your grip on your rights during those arguments. Carrie Mudd, VP of distribution and development at Toronto-based Tricon Films & Television, a prodco that self-distributes, has noticed that most contracts from broadcasters ask for non-exclusive rights for global new media, and says ‘that is 100% buggering up our ability to sell these shows to other territories.’ She encourages fellow producers to fight to retain – or at least share in the potential revenue of – new media rights ‘because that’s the only way we’re going to make any money… and if some producers are giving up those rights for nothing, then the rest of us are fighting a losing battle.’ Dembroski recommends attempting, at the least, to limit the broadcaster’s new media rights to its domestic territory.
While this seems to paint all broadcasters as greedy, there are those that make concerted efforts to reward producers for supplying them with solid programs. Michael Dingley, content strategy chief at HGTV, says when shows are performing well, HGTV ‘alters the contract accordingly,’ which can mean placing an order for a larger number of episodes. ‘Business is business, but we really try to pride ourselves on being fair and empathizing,’ says Dingley.
Reflecting on what he’s learned about negotiating contracts, Real World EP Murray says, ‘In order to build a company, you need to build revenue streams that are going to come back to you in the future. Just working for the fee may take care of this year, but it doesn’t take care of future years.’
If negotiating for your rights still seems overwhelming, consider this recommendation from Barbara Schneeweiss, a Weinstein Company producer on Project Runway since the first season of the show – one that’s received much press recently since NBC Universal, the parent company of Bravo, which has aired the show since its inception, filed a lawsuit against The Weinstein Company for taking the show to Lifetime later this year. Schneeweiss’ advice to producers looking to protect their rights? ‘Hire a good lawyer.’