Break every programme down into smaller parts
A factual series may consist of several different types of programmes. For example, an arts series may consist of three studio discussion programmes, six location shoots across the country and one theatre shoot. The person budgeting such a series needs to have a budget for each type of programme, a budget for central costs such as core staff and overheads and also must make an assumption as to numbers of each type of programme that will appear in the series.
Scripted programmes would need to be broken with reference to the final script and filming schedule.
Amort & Pattern Budgeting
US TV studios require Amort and Pattern budgeting and costing for multi-episodic commissions.
A Pattern budget is produced for the cost of one episode/block, and is repeated for the number of episodes/blocks commissioned.
The Amort costs are those not specifically related to the length of shooting, so if there is a change in the number of episodes/blocks, the amort costs remain the same. These costs are then amortized across the Pattern (episode/block) costs. So, if additional episodes are commissioned, the value of the amortization allocation per episode would decrease.
The cost report is required to summarise the results for each Pattern (episode/block) and with the Amort costs amortized against each Pattern.
Key assumptions in a budget must be clearly stated so that the person reviewing the budget is able to challenge those assumptions, eg foreign exchange rates, number of shooting weeks, shooting locations.
Budget for the worst case scenario initially
A good budgeting method is to do a first-draft budget which includes everything the Director might wish for. This budget will generally be significantly higher than the funder is prepared to pay and discussions can then take place with the Producer, the funder and the Director to ascertain which areas of the budget can be reduced to arrive at a budget acceptable to all parties.
Budgeting for unknowns
It is very hard to budget for a programme unless a detailed synopsis of the programme is available. For example, where you are given a script or synopsis for one programme and asked to budget for a series based on that one script/synopsis then the budget must clearly state that the series budget assumes that each programme will cost a similar amount to the one detailed in the script/synopsis provided.
Another example of this scenario is commonly encountered when budgeting for magic shows. Many magic tricks require bespoke props, critical timing and long set-ups and unless the person budgeting the series has a full list of the proposed tricks supported by a magic expert’s costing of the props, with a detailed breakdown of the set-up required, the budgeting is very much guesswork. Assumptions must be clearly stated so that if a more expensive scenario is later demanded by the broadcaster then additional funding can be negotiated.
Where there is uncertainty in a budget don’t be afraid to put in contingency allowances to cover uncertainties. An arrangement can be made with funders whereby the un-used part of a contingency is returned to the funder.
Obtain quotations where possible
If you don’t have the expertise to budget a specialist area then request quotations from experts in that field. VFX (visual effects), for example can generally only be budgeted by a VFX expert who understands the complete process.
Take a prudent approach
A good budget should always veer on the side of caution so budget allowances should ideally be on the generous side.
Budgeting for overseas currency transactions
When budgeting for foreign currency income or expenditure it is sensible to assume worst case scenario exchange rates (i.e. assume prudent rates of exchange).
Don’t try to budget a programme to a set figure
Where the person doing the budget wants the budget to be a set figure (because, for example the broadcaster has said this is what they will pay) then there is a danger that the budget loses objectivity. A budget should first be prepared based on the synopsis and then discussion should occur as to how that budget can be reconciled to the available finance.
Are actual deliverables consistent with the budget?
Each source of finance will have specific and contracted requirements as to delivery format and different versions for domestic/overseas sales etc and the Production Accountant needs to be confident that these are adequately provided for in the overall budget. It would also be sensible to have the contractual requirements reviewed and costed by a Post Production Supervisor or facility house just to ensure that the budgeted provisions are realistic. It is important that if the numbers need to be changed the Producers and funders should be made aware of this as soon as possible.