2.3 The development budget
You're going to look now at a development budget for the process that's just been outlined. This is not for a real film, but provides a very useful example. The figures used are typical.
Activity 2 Allocating development costs
Table 1 contains a number of cost items and their amounts. Take a look at the items and try to allocate them to the four stages of development. Take a look back if you need to. Add the stage number into the table.
| Items | Cost | Stage |
|---|---|---|
| Option renewal payment | £5,000 | |
| Line producer’s fee for production budget | £5,000 | |
| Writer’s fee for polish under director's supervision | £5,000 | |
| Director’s retainer | £5,000 | |
| Writer’s fee for second completed draft | £10,000 | |
| Hiring a location manager | £2,000 | |
| First option payment | £10,000 | |
| Costs of trip to Cannes Film Festival to meet with financiers | £2,000 | |
| Travel costs of scouting trip to review locations | £1,000 | |
| First draft screenplay plus one set of revisions | £20,000 | |
| Producer’s supervision fee | £2,000 |
Answer
Development costs would appear as Table 2: Development costs in stages.
| Stage | Item | Cost |
|---|---|---|
Stage 1 Total cost: £0 | No direct out of pocket costs | £0 |
Stage 2 Total cost: £30,000 | First option payment | £10,000 |
| First draft screenplay plus one set of revisions | £20,000 | |
Stage 3 Total cost: £20,000 | Writer’s fee for second completed draft | £10,000 |
| Director’s retainer | £5,000 | |
| Option renewal payment | £5,000 | |
Stage 4 Total cost: £17,000 | Writer's fee for polish under director's supervision | £5,000 |
| Line producer’s fee for production budget | £5,000 | |
| Costs of trip to Cannes Film Festival to meet with financiers | £2,000 | |
| Travel costs of scouting trip to review locations | £1,000 | |
| Hiring a location manager | £2,000 | |
| Producer’s supervision fee | £2,000 | |
| Total Production Cost | £67,000 |
The development process requires a producer to spend money on things such as: securing rights; hiring writers and other individuals required for the development process; other research costs, and budgeting the film. The producer needs to raise this money from development funders (or use their own private funds, which is not the usual practice). In order to do this they need a development budget.
The development budget is a tool to enable the producer to plan the development process and ensure that they will not run out of money during that process. In addition, the development budget will be required by almost all development funders.
Who are the development funders? In the UK, the principal funders include:
- the BFI
- BBC Films
- Film4
- certain private funders.
Most other countries in the world also have funding bodies that can be approached for development funding – for example, Telefilm Canada in Canada, the Swedish Film Institute in Sweden, the CNC in France, Screen Australia in Australia.
Generally, development funders get their investment returned with a premium (e.g. 50% or 100%) if the film goes into production. If the film is not made, the producer does not have to repay the development funding.