Nations and Regions Production
It’s good news for the Nations and Regions, Channel 4 has announced a commitment to increase content spend in the Nations and Regions (N&R) from its quota of 35% to a voluntary target of 50%; the BBC is required to meet a quota of 50% (and spent more in the N&R than any other UK broadcaster in 2018) and ITV has a quota of 35%.
The UK government has also hinted that global streaming giants could face Nations and Regions targets alongside the PSBs and Netflix and Amazon have vocalised their ambition to create more local content. It seems that the on and off-screen talent who have been quietly and diligently working in the Welsh creative industries finally have a fighting chance of becoming the next darlings of the industry.
Companies throughout the UK are now looking for strong, intelligent and creative talent outside London to become trusted business partners. But what are the requirements for ensuring that commissions qualify as part of the N&R quota of the broadcasters?
To count towards the regional production quota by hours, relevant productions must meet two out of the following three criteria:
(1) Substantive base
The commissioned production company must have a substantive business and production base in the UK outside the M25, and the production in question must be managed from that substantive base.
The base will be taken to be substantive if it is the usual place of employment of:
- executives managing the regional business; and
- senior personnel involved in the production in question; and
- senior personnel involved in seeking programme commissions.
(2) Production spend
At least 70% of the production spend must be spent in the UK outside the M25.
Production spend should be based on the entire production expenditure including any funding from third parties and spend outside the UK, and excluding the cost of on-screen talent, archive material, sports rights, competition prize-money, copyright costs and any production fee (other than where some of the production fee is used to fund the costs of the production). Legal fees count as relevant spend.
(3) Off-screen talent
At least 50% of the production talent (i.e. not on-screen talent) by cost must have their usual place of employment in the UK outside the M25. Freelancers without a usual place of employment outside the M25 will nonetheless count for this purpose if they live outside the M25.
Key Considerations for N&R producers
If you’re a successful N&R producer and are approached by a London production company (“third party investor”) to head their N&R base consider:
- How will you continue to manage your own projects? Will all your time and energy be taken by the new venture and the third party investor’s projects? What will happen to your own company?
- How are you compensated for your role? Salary? Shareholding in a Joint Venture company? Share of net profits?
- How much on the ground control will you have over the company day-to-day?
- Is the profit split offered by the third party investor fair and reasonable taking into account your role in developing, pitching and pulling together N&R productions?
- If money is invested by the third party investor, what are the terms of investment? Is it recoupable? If so, will you be properly recompensed before recoupment?
- Can the third party investor benefit your own projects’ development? Can they open doors with commissioners for your projects? What do you expect their commitment to be?
- If you continue to develop your own programme ideas, who owns those ideas? The joint venture company? Your own company?
- If management and administration fees are payable under a programme commission, who retains what percentage of those?
Above all get to know and ensure that you trust your partners. Partnerships are stronger if there is mutual respect and a common goal.
The ultimate goal must be for strong, innovative and entertaining programmes to be commissioned regardless of where the producer is based, so let’s look to create successful and thriving UK wide partnerships that benefit all.
