Breakthrough Terms of Trade for NZOA Programmes

PRESS RELEASE - FOR IMMEDIATE RELEASE
Thursday 19 April 2007

Breakthrough Terms of Trade for NZOA Funded TV Programmes

NZ On Air has announced new terms for funded TV productions. The deal was locked off in late March, after discussions with SPADA and the Screen Council, and announced yesterday by Minister of Broadcasting, Steve Maharey.

“The boards of NZ On Air, SPADA and the Screen Council deserve congratulations for reaching an agreement,” said Maharey. “Balancing the traditional imperative of an adequate return to the taxpayer, with current Government objectives for screen industry development, means that all the parties involved had to step outside their preferred positions and find a new solution. It’s a tribute to those involved that the solution is both original and fair,” he said.

NZ On Air chief executive Jane Wrightson says the agency is delighted with the new arrangements. “The new deal will help producers grow new markets for their programmes, yet keep a consistent return to the taxpayer,” said Wrightson. “We’re very grateful to SPADA and the Screen Council for helping us sort this out,” she said.

SPADA chief executive Penelope Borland said the organisation was extremely pleased with this outcome which was a solution for New Zealand's unique screen industry environment. "We believe these new terms of trade will be very positive both for the independent screen production industry and NZ On Air, who have approached these recent negotiations most constructively. These new terms will enable production houses to retain a greater share of returns to their programmes, resulting in a strengthening of the economic and creative value of the screen production sector, as well as the creative sector as a whole," said Ms Borland.

From 1 April, NZ On Air will retain 25% of programme sales income and the producer 75%. On full recoupment of NZOA investment, and for other sales (eg formats), the split is 90% to the producer and 10% to NZOA. In a new approach, receipts from programmes receiving under $200,000 NZ On Air funding will be 100% to the producer, provided the broadcaster contribution takes the full form of a licence fee.

“The 100% recoupment to the producer is a step specifically designed to assist documentary and factual programme makers,” said Wrightson. “Producers have been telling us for a while that selling smaller docos is generally too hard, as the cost of sale often outweighs the income. It’s in NZ On Air’s interests that these programmes are seen by as many people as possible and, given sales income to us from them is generally modest, NZ On Air decided to relinquish its income share,” she said.

The new position is non-negotiable except for projects with significant third party funding (generally meaning international co-productions and feature films, which will be individually negotiated as usual).

The new arrangements can be backdated provided the producer secures a letter of variation to their NZ On Air contract. Income already received by NZ On Air as at 31 March 2007 remains with the agency. Further details are on www.nzonair.govt.nz.

ENDS

New Terms of Trade

As at 01 April 2007 NZ On Air has adopted new terms for its TV productions. The new terms of trade are the culmination of nearly two years of negotiations by SPADA on behalf of its members. SPADA is extremely pleased with the outcome.

The new terms are as follows:

1) Producers retain 75% (NZ On Air 25%) of programme sales net income shared with NZOA until recoupment; thereafter producers retain 90% (NZ On Air 10%).

2) Producers retain 90% (NZ On Air 10%) of all other shared net income from all other exploitation, including ancillary rights (as defined in NZ On Air’s Letter of Variation.)

3) Producers retain 100% income from all exploitation of any programme receiving under $200,000 NZOA funding; provided that the broadcaster contribution is comprised solely of a licence fee.

These terms are non-negotiable except where programmes have significant third-party investment (eg. international co-productions, feature films) where individual negotiations still apply.

"Kickstart", NZ On Air's making and marketing initiative, ceased on 01 April 2007. This producer assistance mechanism has been replaced by the new contract terms.

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