The second annual World Producers Summit held by the Association of Independent Commercial Producers (AICP) and the Commercial Film Producers of Europe (CFP-E) last month during the International Advertising Festival in Cannes has built significant momentum. This time the three-hour session drew 87 production company owners or stakeholders from 29 countries. They compared notes on issues, concerns and business practices, finding common ground on several fronts.
But perhaps the most significant development to come out of the event was the general consensus that dialogue needs to be ongoing among commercial producers around the world. As a result, organizers approved an initiative to have a Web-based platform up and running within the next six months in order to facilitate regular communication throughout the worldwide community.
AICP president/CEO Matt Miller related, “We’re creating an online forum for this world producers organization, if you will. The face-to-face annual summit has been great and will continue. But we all want to step that up to an ongoing dialogue among commercial producers globally.” Miller envisions himself and CFP-E president Francois Chilot initially posting different blogs to help generate communication and feedback on varied topics. Miller added that the intent is to draw commercial production leaders who are members of AICP and CFP-E, as well as their counterparts from other parts of the world. He noted that the summit attracted high-level production company attendees from such areas as Asia, Australia, New Zealand, South Africa and South America–key markets which need to be part of the online forum.
Summit delegates also came from Austria, Belgium, Brazil, Canada, Chile, the Czech Republic, France, Germany, Holland, India, Italy, Japan, Norway, Poland, Sweden, Switzerland, Thailand, the U.K. and assorted other countries.
Miller said that a mix of issues was discussed at the summit. He noted as an example the Australian community’s concern over a WPP production company startup, which has gone on to become a major production source in the market Down Under. Similarly, he added, that many Europeans are concerned over the in-house editorial push at many U.S. ad agencies. European production house still have a great deal of control over the editorial biz , added Miller, and view the agency in-house post arms as an encroachment. Miller brought Bob Cagliero, executive producer of 89 Editorial, New York, to the summit to address the topic. Cagliero is a board member of the Association of Independent Creative Editors (AICE), which too has voiced concerns over agency in-house edit ventures (SHOOT, 6/3, p. 1). In fact, agency edit houses are in the process of forming their own trade group, the Association of Agency Creative Editors (SHOOT, 5/13, p. 1).
BOARD MEETING
The global summit came about a week after the AICP held its semiannual national board meeting in New York. Among the key developments at that session were:
The board received an update on the labor front. The AICP is currently in negotiations with the Teamsters in New York and Los Angeles. Furthermore, at press time talks were about to get underway with the Directors Guild of America on a new contract. And protracted negotiations continue with the IATSE Scenic Artists Local 829, New York; these talks began three-plus years ago and an agreement has yet to be reached.
Also discussed was the growing number of financial incentives being put in place or proposed in different states throughout the country. As reported in SHOOT, an anti-runaway measure has passed in Georgia (SHOOT‘s “Meet the Commish,” 6/24, p. 2), while Illinois’ Film Production Services Tax Credit Act has recently gained flexibility that could result in a greater number of commercial producers taking advantage of that tax credit (SHOOT, 6/24, p. 1). Rumblings continue about possible incentives in California and New York.
On the latter front, Miller said that the AICP has been successful in garnering bipartisan support from New York State legislators for a tax credit (SHOOT, 4/8, p. 1). While the current legislative session came to a close without the passage of a proposed bill targeting commercials, Miller remains optimistic over prospects for the spot tax credit when both state houses reconvene in the fall. He related that Governor George Pataki’s office has gotten Pat Swinney Kaufman–executive director and deputy commissioner of the New York State Governor’s Office for Motion Picture and Television Development–involved in the incentive mix. Kaufman also serves as president of the Association of Film Commissioners International. Miller added that the AICP is also lobbying in New York City for a counterpart tax credit to whatever hopefully develops at the state level. This would parallel the additional city tax credit linked to the earlier feature/TV tax credit legislation passed by the State of New York.
The AICP continues its analysis of ad agency production contracts, which began in 2001. Analyses are being updated on three such contracts–from Saatchi & Saatchi, Young & Rubicam, and Grey. The AICP analyses are designed to serve as a road map to help AICP member production houses navigate their way through a maze of different agency production contracts and provisions. Contract issues range from receiving payment on a timely basis to postponement/cancellation contingencies, legal liabilities and proper indemnification. The intent of the AICP work is to raise awareness of contractual language and related issues, helping production companies make informed decisions in dealing with agency contracts.
The AICP is in the process of writing a definitive piece on wrap-up or blanket insurance, which will incorporate input from major insurance company Aon. On jobs involving a blanket policy, insurance coverage for the production is carried by the advertiser or agency rather than the production company. According to the AICP, this can open up a Pandora’s box of potential liabilities for the parties involved. This has led to concerns over risk management and whether contractual language affords the proper hold-harmless indemnification to production companies working on jobs under blanket policy coverage.
The AICP is looking to engage agency producers and business affairs staffers in dialogue about production company concerns over slow payment, sequential liability and other issues. As earlier reported (SHOOT, 1/21, p. 1), the AICP instituted new guidelines covering late payments, sequential liability and foreign production costs.
Many ad agencies have sequential liability language in their contracts or in riders or side letters. This language stipulates that no payment is due until the agency is paid by the client. Other agency contracts do not refer to sequential liability but they describe the agency as “acting as agent for” its principal, the advertiser–which can equate to the agent being liable for payment to the production house only if the advertiser has paid the agent.
For some time, a number of veteran production house executives have told SHOOT that it’s difficult to determine exactly when agencies get paid by the client. Furthermore, they point out that generally production companies cannot easily have a direct relationship with the client without jeopardizing their relationship with the agency. There have been instances where clients say they have paid agencies and are surprised to hear that the production house has not been paid. Whether or not the clients have sent payment, the bottom line is that production houses have been routinely asked to bankroll jobs over an inordinate period of time for much larger entities, often for multinational corporations and agencies. This can place a significant financial burden on production companies. Coping with past-due payments has jeopardized the health of many in the spot production house community.
When the AICP Show recently came to Minneapolis, Miller met with agency producers and broadcast business affairs people in that market to discuss sequential liability, among other issues. Miller said about 30 staffers from Minneapolis agencies turned out for the meeting, which he described as productive. Miller noted it’s important to educate agencies about the repercussions of certain business practices on the commercialmaking community at large. He hopes to have similar sessions with agency business affairs staffers and producers in other markets. He said such a session is in the works for Chicago when the AICP Show comes there for a screening in November.
And progress is being made on the AICP’s proposed health plan designed to offer coverage to company staffers and nonunion freelancers who don’t have medical insurance. As earlier reported, the health plan, which is years in the making, has gained necessary approvals from the U.S. Department of Labor and the Internal Revenue Service. Now the AICP has put the health plan out to bid to insurance underwriters.
