What is film budget contingency? Contingency budgets are extra amounts of money set aside up front for things like reshoots, overtime, and other additional costs that are considered essential.. Most productions don’t typically tap into those budgets though.
What is a contingency budget?
- Definition from WhatIs.com Contingency budget, in the context of project management, is an amount of money that is included to cover potential events that are not specifically accounted for in a cost estimate. The purpose is to compensate for the uncertainty inherent in cost and time estimates, as well as unpredictable risk exposure .
What is film budgeting?
Film budgeting is the process of preparing a budget for film production by a line producer, unit production manager, or production accountant. This document, which could be several pages long, is used to seek funding for the film's pre-production and production, as well as to lead to pre-production and production.
What should be included in a film budget breakdown?
Fun things like publicity costs, festivals, and attorneys. Be sure to include production insurance and any other generation costs for the production office. 3. Start with film budget accounts The project type and genre play a big role in the structure of your accounts and sub-accounts on your film budget breakdown.
What is the difference between a film budget and line items?
In simple terms, a film budget is a shopping list, and a line item is just an item on that list. But line items, in a larger sense, are really where the rubber hits the road.
How much should contingency be film budget?
between five and ten percentContingency--This is a buffer, typically between five and ten percent of the total budget. Production is unpredictable, and contingency prepares you for the unexpected.
What is an example of a contingency cost?
For example, if the project team feels they need a 10% contingency reserve for a $1,800,000 project, they would add $180,000 (10% of $1,800,000) to the cost of the project - for a total project cost of $1,980,000.
How is budget contingency calculated?
The easiest way to do this is to multiply the probability percentage by your estimated cost impact, providing a risk contingency for each line item. For example, a risk probability of 20% multiplied by a cost impact of $40,000 equals a risk contingency of $8,000.
What is an example of contingency?
Contingency means something that could happen or come up depending on other occurrences. An example of a contingency is the unexpected need for a bandage on a hike. The definition of a contingency is something that depends on something else in order to happen.
What is a 10% contingency?
A construction contingency is the amount of money allocated to pay for additional or unexpected costs during the construction project. Typically, a 5-10% calculation of the construction budget should be allocated to your construction contingency.
What are the 5 steps of contingency planning?
The following are the five basic steps of contingency planning for epidemic, pandemic, or other emergency situations.Program Management. ... Planning. ... Implementation. ... Testing & Exercise. ... Program Improvement.
How do you identify a contingency?
To develop a contingency plan, first conduct a risk assessment: identify your business-critical operations, identify the threats to those operations, and analyze the potential impact of each threat. Then, include the following points for each threat: Scenarios. Triggers.
Why is it important to plan for contingencies in budget?
The purpose of contingency planning is to ensure continuity of business operations or financial stability. It can help individuals, families and businesses recover from disaster and can ensure that damage or injury to personnel and property is effectively contained.
Is contingency an expense?
Contingency Amount: Contingency amount refers to the money set aside to cover any unforeseen expenses of the organization or the project. Contingency expenses are required because any organization or a project can face an uncertainty because of which certain costs are incurred.
What is the purpose of contingency?
“The purpose of any contingency plan is to allow an organization to return to its daily operations as quickly as possible after an unforeseen event. The contingency plan protects resources, minimizes customer inconvenience and identifies key staff, assigning specific responsibilities in the context of the recovery.”
What are the most common contingencies?
There are four common contingencies that every homebuyer needs to work through:Home inspection contingency.Appraisal contingency.Financing contingency.Home sale contingency.
What is another term for a contingency?
Some common synonyms of contingency are crisis, emergency, exigency, juncture, pinch, straits, and strait. While all these words mean "a critical or crucial time or state of affairs," contingency implies an emergency or exigency that is regarded as possible but uncertain of occurrence. contingency plans.
What are contingent costs?
A contingency fee is a form of payment to a lawyer for their legal services. In contrast to a fixed hourly fee, in a contingent fee arrangement lawyers receive a percentage of the monetary amount that their client receives when they win or settle the case.
What is contingency cost in construction?
Contingencies are downside risk estimates that make allowance for the unknown risks associated with a project. Typically, contingencies refer to costs, and are amounts that are held in reserve to deal with unforeseen circumstances.
What are contingency items?
Contingency Line Item means the Line Item in the Budget identified as "Contingency", which is intended to cover the eventuality of unforeseen Costs or cost overruns.
What will be added for contingencies charges?
The term “contingencies” indicates the incidental expenses of miscellaneous character which cannot be classified under any distinct item sub-head, yet pertain to the work as a whole. To meet such unforeseen expenses an additional amount of 3% to 5% of the estimated cost of the works is provided in the total estimate.
Overtime
We’ve all been there, you’re watching the clock wind down and there’s still a bunch of set-ups in front you and you’re two hours behind schedule. The crew is tired and torn between wanting to go home and earning time and a half. The producer and AD are desperately trying to find solutions to get what they need before they have to wrap up.
Reshoots
There’s nothing more deflating than getting into post, cutting up a scene and bam! You see it! Something no one noticed on set and it’s a glaring error, one that cannot be ignored. Producers now have to re-group to discuss the conundrum. They come to the conclusion that a day of reshoots is in order.
Essential Costs
Now we’re not talking about paying for a producer’s zip line tour while shooting in Hawaii, that’ll get you in trouble, but let’s be real, some producers get away with it. No, we’re talking about things you need to keep a production moving to avoid losing a whole day of production.
How does budget affect film?
Another impact of the budget is that many related costs rise and fall with the amount of the budget. For example, talent will charge far more on a big-budget film than they will for their identical services on a low-budget film. Similarly, premiums paid to completion guarantors and insurance companies are calculated as a percentage of the budget, not flat amounts, and every film budget includes a contingency for possible excess costs, always expressed as a percentage of the budget—usually 10%. Finally, all the guilds have fee structures that are higher for high-budget films.
What are the above and below the line costs?
The above-the-line costs include the costs for the rights, producer, and talent. For example, above-the-line costs include the costs of acquiring the underlying rights, script costs, producer fees, and payments to key talent (director and main actors). The below-the-line costs are basically all costs of production and post-production. Other costs include financing costs, the completion guarantee fee, and the contingency. The reason that these categories are relevant is that several items (such as insurance premiums and completion bond fees) are often calculated as a percentage of the budget, but excluding all or a portion of the above-the-line costs or other costs. Even the contingency itself may exclude certain above-the-line costs. Also, the below-the-line costs are used as a rough indication of the value of production going “on the screen,” as opposed to payments for rights, talent, etc. Insiders are always using this lingo, so you need to know it.
What is the role of budget in a film?
A film’s budget plays a dominant role throughout the film’s life cycle —with implications going far beyond the mere cost of the film. Perhaps the most tangible aspect of a film’s budget is that the amount that distributors will pay for a film is almost always calculated as a percentage of the budget (the “budget/sales corollary”), ...
What is included in a budget?
In general, the budget includes all costs relating to the development, production, and post-production of a film. Thus, the budget includes, for example, costs of acquiring the script, payments to talent, and production costs. There are also several interesting inclusions and exclusions, discussed below.
What percentage of the budget is overhead?
Most financiers go along with this. The budget almost always includes an artificial mark-up referred to as “overhead,” usually approximately 10%-15% of the budget. For example, if the budget is really $10 million, the producer will charge and retain an additional $1.5 million to purportedly cover its overhead.
Why do producers inflate the cost of movies?
The higher the budget, the more the film sells for, so there is a perverse tendency to inflate the cost of films. Producers often increase the budget for a picture by tagging on additional inflated “producer fees” or “overhead charges” for themselves, which are nothing more than a mark-up to the true cost of the film.
What are the miscellaneous items that should not be included in a budget?
These include all financing costs, including interest and fees, all legal fees relating to the film through completion, and the cost of the completion guarantee.
What is prep day?
Prep days are the days outside of shooting when your crew is working in order to be ready to shoot. We’ve marked this on our production budget template.
What is the production budget?
Production Budget contains the majority of the overall accounts. All pre-production and production costs, equipment and BTL (below-the-line) labor are accounted for in this category.
What is a preliminary film budget?
Film budgeting usually occurs in two different phases. The preliminary film budget is created to raise financing and it isn’t generally detailed or extended. It often only provides the top sheet (TS) which totals the accounts and contains potential costs.
How is kit fee calculated?
Kit fees can be calculated by the day or week. Costs vary depending on the gear and project.
What is included in the development phase of a SAG?
This category includes development costs, talent, and crew generally involved in development phase. Writers, producers, the director and talent are included in this category. Don’t forget all SAG hires, like the stunt team and studio teacher.
Why do we have pick up days?
Pick-up days occur after the scheduled shoot days in order to shoot something that was missed during principal photography. The longer shoots have more pick-up days budgeted. For example, a short-form project will benefit from even 1 pick-up day with a skeleton crew.
When to assign contingency amount?
Assign the contingency amount first, before working out the budget. That way you’re covered!
What is contingency budget?
Contingency Budget means the budget for development contingencies set out in the Proposal whether expressed as a percentage, specific amount or number of hours; Sample 1. Based on 1 documents. 1.
Does the FFGA Baseline Project Contingency Budget include changes not yet negotiated or finalized at the time?
The FFGA Baseline Project Contingency Budget does not include known changes not yet negotiated or finalized at the time of the Bottom-Up Estimate (BUE).
1. Consider inflation
Films take time to get off the ground. If you had a budget done before you started raising money, you could very well be dealing with stale numbers by the time you hit pre-production. Revisit your budget regularly, especially if you’re in development for a good stretch.
2. Accept unavoidable realities
Parking tickets happen. So do late fees. And data loss. No matter how many pre-production meetings, deal memos, or emphatic emails you send trying to communicate the importance of checking street signs or backing up files, you will wind up compensating for someone’s hasty choices that didn’t pan out.
3. Hire pros on a flat rate
April 15 comes for us all, and your film is no exception. Long after production and promotion costs are paid, you will still need to hire professionals for tax prep, production accounting, legal considerations, and many other services discussed in our blog post on Sticker Shock.
4. Learn from your experience
As noted earlier, we all make mistakes. It’s part of how we learn. So make sure you take time to process those lessons learned from successes and failures—big and small—on every single show. Sometimes things move so fast you can forget to do this, so we suggest the tried and true method of actually writing stuff down.
5. Save the contingency for actual contingencies
All these examples serve to illustrate why it’s highly probable if not inevitable that you’ll exceed your initial budget. That is why we cannot emphasize this enough: do not mess with the contingency. Your contingency is for unanticipated expenses. If you can anticipate an expense, it’s not a contingent one (e.g.
What is contingency budget?
A contingency budget is money that is set aside in a budget for unexpected costs. It is common for unexpected costs to be expected. As such, a contingency budget avoids the complexity of revising a budget with each unexpected cost and resubmitting it for approval. The following are common methods for calculating a contingency budget.
How much contingency is too small?
Looking at projects in your industry and how many go over budget. If projects commonly go over budget by 40% for similar projects, a contingency of 5% may be far too small.
