edition 51 may 19, 2006
  paying for talent costs

     In the USA there is a project reviewing the way talent fees and residuals are paid in that country. In the same way, P3 believe that same review should be undertaken here in Australia. Today we look at the flaws and weaknesses in talent contracts for actors and presenters and recommend changes that should be implemented to manage these fees more effectively. In this P3 e-news… taming the cost of talent – 62% of tv advertisers waste 25% of media impact – have a blogging opinion tutorial on sponsorship

taming the cost of talent

Talent costs for both television and print can be major expenses for advertisers. In fact poorly negotiated and contracted talent agreements have lead many advertisers to not realise the value of their initial production, with subsequent roll-over fees hindering the cost effectiveness of extending a campaign beyond the original agreement. There are also some myths about talent fees that often stop a rigorous process being implemented and in which the negotiation process itself is often flawed.

The Industrial Award There is an award that is agreed between the Media Entertainment and Arts Alliance (MEAA) and the Advertising Federation of Australia (AFA).

But this award only sets minimum fees for attending the actual shoot and clearly states that the rights for use of the talents image are open to negotiation based on media exposure, geography and time. There are guidelines for fees based on territories outside of Australia, but these are just that, guidelines.

The roll over fee The contract used by most agencies on behalf of their clients is drafted by the MEAA, in agreement with the AFA, and defines the terms and conditions. One of these terms and conditions concerns roll over fees.

Roll over fees are paid when the initial term is complete and the contract is rolled over to a new period.

The normal practice is for the whole fee to be rolled over, yet the fee is composed of a fee for the actual work on the shoot and a fee for the rights to use the image. Clearly there is no additional work for the rollover, so we suggest that only the rights component of the fee should be rolled over.

The flawed negotiation On one side we have the actor or model and their agency and / or manager. On the other side we have the agency producer and their client, the advertiser. In the middle we have the casting agency. The actor / model employs the agent / manager to maximise their fee and the incentive is that they earn a direct percentage on what they negotiate.

On the other side is the agency producer who is usually up against a tight deadline and who has no tangible incentive to negotiate the lowest possible fee beyond doing the right thing by the client. The agency producer is also under pressure to deliver the actor / talent that the film director / photographer wants to work with, as well as answer to the agency Creative Director, who is more focused on the creative outcome and not the cost. Taking this into consideration, if you have the preferred actor / model and a tight deadline, how do you go about negotiating the best deal?

Changing the balance There are a number of ways to address this. Firstly rather than choosing one actor / model per role, select a number of options and have the agency come back with the proposed cost for each so you can together select the best value for money.

Secondly, stop using the MEAA talent agreement and put in place an agreement that is more balanced in the terms and conditions such as the P3TV Talent Agreement.

Thirdly use the P3TV talent benchmarks to set the rates you are willing to pay and push the negotiation rather than being pulled through the negotiation. To find out more on how to achieve this contact tv@p3.com.au or call Sydney 02 9279 4997 or Melbourne 03 9682 6800.

 
62% of tv advertisers waste 25% or more of media impact
 

A recent survey of digital braodcasting by P3TV has found that more than 60% of advertisers are providing the wrong format masters to the TV networks. With almost 1.3 million homes in Australia viewing digital broadcasts this is a significant wastage. Are  you one of them?
To find out, get your free copy of the P3TV Format Survey Report. Just email georgia@p3.com.au
  have a blogging opinion  

    P3 ‘s new BLOG has arrived at http://www.p3.com.au/blog/ and is full of opinion. * Agency Selction * Marketing Process * Remuneration * Television Have an opinion. Make a comment. Check it out.  
  tutorial on sponsorship  
 
    IQPC Sponsorship Summit 2006 Leveraging Sponsorship Tuesday 27 June – Thursday 29 June Darren Woolley will be holding a post summit tutorial on ‘How to Determine the Best Fit Sponsorship Deal for Your Organisation’. Executive Tutorial A 9am – 12.30pm June 29, 2006 Reserve your place on 02 9223 2600 or www.iqpc.com.au/marketingIQ  

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