In support of closing deals quickly

After watching several deals stumble earlier this year, Serious Lunch and Eye Present's Genevieve Dexter has learned an important lesson she wants the rest of the industry to know.
December 16, 2020

Most of the key moments for Eye Present Productions and Serious Lunch Distribution have been serendipitous—our content suddenly becoming very relevant to the big players.

The acquisition of Ronja the Robber’s Daughter by Amazon Prime coincided with the rise of serial storytelling on SVODs. Operation Ouch! grew with a surge in demand for STEM programming, and the series has since grown its reach on Netflix because of the recent call for educational content that could support home schooling. Best & Bester benefited from Nickelodeon International’s new drive to commission and co-develop more third-party content. Most recently, the BBC acquired three series, driven by specific needs for content that was relevant to British kids (Monty & Co) and the combined forces of COVID and Black Lives Matter (The New Legends of Monkey and Tik Tak). I am not going to retrofit a strategy—these were all moments of opportunity.

You have to catch the moment, especially now as the speed of interaction between new media players and the independent sector tends to be a very short window. Once you identify an opportunity, you need to act quickly in all aspects—especially contractually.

Producers may worry about setting a contractual precedent, but they have to analyze the probability of that type of deal still being around to repeat.

At Kidscreen Summit 2020, Eye Present took out Messy Goes to Okido 3 and Best & Bester (pictured) to find co-producers and close financing. One minute we were in Miami, and then poof! Our dreams appeared to melt away as all funding was frozen. Coming out the other side, thankfully most of the players are back at the table, but COVID-19 is just one extreme example of world events that are happening all the time without our knowledge.

There is a tendency in our industry to move to finalize contracts only once all the partners are in place, while pre-production is usually held until these agreements are firmed and signed. I would argue that working in a linear, rather than parallel fashion, is actually riskier. There exists the very real possibility that a deal will evaporate for reasons beyond your control—your key contacts move to new jobs, a trade war influences investments, a pandemic hits the global stage. While you wait for the contracts, the deal you’ve worked towards can vanish. I would urge moving to contract (or at least heads of terms) as soon as possible, with timelines,  goals and, if necessary, exit terms.

There are common causes for contractual delays. There is the broadcast acquisition phase—the most exciting and uncomfortable period prior to start of production. Ideally, you have sound co-development contracts in place that regulate these issues, but there are always grey areas. I would urge everyone to cut through the final stage minutiae. Don’t hold up contracts over small details, and celebrate that you are about to see your program on a major platform. In any complex co-production structure, you are going to make changes along the way, so build in flexibility in cashflow splits, contingency, underages and overages. Keep the energy positive; it’s got to last for the duration of the production. Learn to give in on a few percentage points here and there—it might even work in your favor in the long run.

There are some things that should never be rushed. It is rare that an independent producer or distributor has the power to enforce any finetuning of the standard terms and conditions—better to concentrate on the business terms and the budget to fulfill them. Do the terms leave you with enough rights to be able to complete financing? Are the exclusivity clauses so extreme as to wipe out your future income? These things cannot be ignored or glossed over.

You might be familiar with how other industries tackle deal-making, where M&A teams stay up all night to close if they have to. They don’t wait for that next meeting in Cannes to push the boat along a little further. If you are contracting with an organization much larger than your own, their response time will be slower than yours, so make sure you react quickly and in concert with your partners in a way that encourages your investor that you are proficient enough to fulfill the remit.

You may also be familiar with putting off a contract review for a quiet moment, and then prevarication paints you into a corner. If the contract is a game-changer, anticipate the avalanche of work and opportunity that it entails. I am making a case for haste, so get the financial and team support around you to give you the space—in other words, make sure you can afford to succeed quickly. And remember the ABCs: Always Be Closing.

The views expressed in the article are the author’s own and should not be taken as legal advice.

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