B1.1 Production Fund

Please note: The supplemental Production Fund Summary document that must be completed and submitted with your application can be found here.

Purpose and Scope:

The Production Fund is ScreenWest's principal fund for the provision of production finance.

Production funding is primarily allocated through competitive rounds held approximately on a quarterly basis.

The Production Fund has two tiers of funding (Tier One: up to 15% of the total cost of production and Tier Two: up to 25% of total cost of production). Both funding tiers are intended to assist productions to achieve full financing by triggering or complementing other funding sources, such as Film Finance Corporation Australia (FFC), market partners and the private sector.

The Production Fund primarily funds programs in Television Drama (children's "C" classification drama series, telemovies and mini-series) and Factual (including documentary) genres, however, the ScreenWest Board retains discretion to consider funding other productions on a case-by-case basis. Direct funding through ScreenWest will usually not be considered for the following:

• Productions primarily intended for corporate, educational, training or promotional purposes;
• Productions for non-commercial outlets, or which do not have national and/or international market attachments;
• In the case of documentaries, ScreenWest will not fund "domestic door" (formerly Accord) projects, in which full funding is shared between the broadcaster and the FFC unless the budget exceeds the full amount the FFC will provide under the domestic door guidelines;
• Television programming (other than drama or Factual including documentary) such as commercials, infotainment, current affairs, light entertainment and general children's programming.

Applicants are encouraged to seek online and cross-platform opportunities in addition to television broadcast.

Priority is given to applications from either a Western Australian-resident Production Company or a Western Australian-resident production company that has entered into a genuine co-production relationship with a non-Western Australian production company. Non-Western Australian productions will only be considered where the Production Company brings demonstrated strong economic and/or creative opportunities to the State.

Note: A genuine co-production relationship with a Western Australian-resident production company will be evidenced by both co-producers sharing creative control, copyright and profit entitlements on a pro rata basis and sharing credit entitlements by way of a shared card. Variations to the foregoing entitlements may be considered in exceptional circumstances.

Financial Assistance:

Subject to available funds, ScreenWest will hold four competitive funding rounds of the Production Fund in the 2006/7 financial year. They will be timed to integrate with the FFC closing dates. ScreenWest plans to allocate a minimum of 40% of available funds each year to Drama (Children's and Adult) and at least 40% to Factual Programming (particularly Documentary), subject to Board review. The remaining 20% will be available for additional production in any approved genre including Drama and Factual.

ScreenWest's finance per project will be capped at $600,000.

The allocation of production finance to any production company in any financial year will be capped at $800,000. This amount will exclude development monies, which ScreenWest may elect to rollover into the production.

Tier One Funding:

The majority of funds will be provided under Tier One funding investment. Successful applicants will need to meet ScreenWest's standard eligibility criteria. ScreenWest will offer funding of up to 15% of the total production budget in Tier One.

Tier Two Funding:

Under Tier Two funding investment, ScreenWest will offer funding of up to 25% of the total production budget. Applicants will only be eligible the enhanced funding from Tier Two where they can demonstrate that either:

• the project cannot be reasonably likely to find the required funds through any other source or;
• provides particular strategic or cultural value to WA through innovative funding partnerships, production or creative development.

Tier Two funding is only likely to be successful where it meets several of the following conditions:

• The project creates new and potentially on-going production partnerships or alternative funding opportunities; and/or
• The production shows significant innovation in its format or methods of interacting with the audience; and/or
• The production fills all key creative positions with local practitioners, including providing demonstrated skill development for key WA creative practitioners; and /or
• The production provides an opportunity to present significant Western Australian cultural content nationally or internationally, but which may have limited market attachment. In some cases this could override a less locally oriented project with a lower funding request.

Whilst up to 15% of the total production budget can be funded under Tier One and up to 25% under Tier Two, as a general rule projects seeking smaller percentages of their overall budget will receive priority over those seeking higher amounts, unless a proposal shows exceptional cultural or production development opportunities for Western Australia. The total amount of finance being sought from ScreenWest will also be taken into consideration.

Furthermore, as a yard stick, ScreenWest would expect that the Production Fund investment would gear up local expenditure of at least a 1:2.5 (Investment to Western Australian expenditure) ratio for Factual including documentary and a 1:4 ratio for Drama and Children's Drama. ScreenWest also expects that production roles and services, including most key creative roles, are to be filled by Western Australians to the maximum extent possible, subject to availability and broadcaster approvals. Special requirements such as formal co-production treaties will be taken into account.

ScreenWest places all its available production funds on offer to applicants at each round. Successful applicants will receive funding offers for a fixed period, enabling them to secure full funding within an agreed timeframe. Where a project fails to secure full funding within the timeframe, ScreenWest's commitment to funding will be reviewed. All lapsed and uncommitted funds will then be made available at the next Production Fund round.

Eligibility and Selection Criteria:

Tier One and Tier Two Standard Eligibility Criteria:

Projects applying for funding investment from ScreenWest will be assessed on a competitive basis. They must fit the eligibility criteria detailed in ScreenWest's General Guidelines.

Applicants must demonstrate that other sources of production finance and substantial market commitments are either in place or that negotiations are well advanced. For projects seeking investment from the FFC, the status of that application will be taken into consideration.

Production budgets and all investment, pre-sale, co-production, and distribution agreements will be subject to close scrutiny as part of the assessment process.

Projects will be selected accordingly.

For details of what needs to be included in an application, and the criteria used for assessment please refer to the General Guidelines. If there are more eligible applicants than available funding, a further selection procedure based on the slate of projects under consideration will be used.

Considerations will include, the balance of one-off programs and series, the diversity of topics and genres, and an appropriate balance of emerging and experienced practitioners in the projects within the slate of ScreenWest funded projects.

ScreenWest will utilize Indigenous readers or panelists for those projects which include Indigenous content or have Indigenous key creatives attached.

Funding Conditions:

Following funding approval, ScreenWest will provide a letter of offer to the Producer to allow the full production financing to be completed. Applicants must complete full financing within an agreed timeframe. Where the Producer fails to complete full funding within this period, ScreenWest reserves the right to review its offer.

ScreenWest funding may take the form of direct investments, loans, distribution guarantees, underwriting or a combination of these.

Once funding has been approved, ScreenWest will insist that production companies may only vary their undertakings for local staffing levels and expenditure in Western Australia in exceptional circumstances, once they have demonstrated that there are no suitable local or expatriate personnel available to do the job.

ScreenWest will be entitled to a percentage of copyright and profit share in accordance with normal industry practice. The terms for recoupment of ScreenWest funding will be determined by agreement on a case-by-case basis.

In general, ScreenWest will require:

• Recoupment of investment pro rata with other investors from 100% of net returns until its investment is fully recouped;
• Pro rata profit share with other investors of net returns after recoupment.

Where ScreenWest is an equity investor in a production, ScreenWest will share equally with the producer the funds it recoups from first dollar, with the producer's share capped at $100,000. After the producer has received $100,000 under this arrangement, recoupment will fully revert to ScreenWest until the ScreenWest investment is recouped. To be eligible, the producer must be a Western Australian resident as defined in the General Guidelines. Also for Western Australian resident companies, ScreenWest may elect to transfer proprietary and beneficial copyright in a project to the production company seven years after the completion of the project.

ScreenWest may offer loans on a fully or partially secured basis. Security may take the form of assignment of the proceeds of pre-sale and distribution commitments, corporate guarantees, letters of credit, personal guarantees or other security acceptable to ScreenWest at its sole discretion. Contractual commitments from Australian television networks will generally be considered acceptable security.

ScreenWest will consider waiving the requirement for a completion guarantor where the total Production budget is less than $250,000 when the Production Company can demonstrate a successful track record and can provide evidence of its financial ability to self guarantee the completion of the project. If the completion guarantor is waived, the Production Company must agree to underwrite any overages or additional costs incurred by the project. ScreenWest will commission an independent budget and risk assessment to verify that the project is viable. If the completion guarantor is waived the ScreenWest funding will be cash-flowed after rough cut is viewed and approved. 

ScreenWest will require execution of all the finance and security documentation before commencement of cash flow.

ScreenWest will consider providing a production loan for completion monies on projects that have already commenced production.

It will be a condition of any such production loans that:

• The loan be recouped in first position, prior to equity investors recoupment, with an additional premium of 10% of the loan amount being payable;
• An agreed copyright share be held by ScreenWest until completion, at which time the copyright share will be reassigned to the production company;
• ScreenWest will not receive a profit share, due to the finance being provided to the production company by way of a loan; and
• Either a completion guarantor be appointed or a process be agreed to ensure that ScreenWest's funding will be expended on future production costs only.

Production Companies that receive funding of $125,000 or more from ScreenWest will be obliged to fund attachment(s) in consultation with ScreenWest. The number of attachments that are required to be funded by the Production Company is determined by the amount of ScreenWest finance, as listed below. Each attachment should be at least of an eight week duration and a minimum of $500 per week be allocated per attachment:

• $125,000 to $299,000 - at least one attachment;
• $300,000 or more - at least two attachments.

The costs of the attachments must be included in the budget submitted to ScreenWest. Please refer to the A2.2 Professional Attachments and Mentorships Guidelines for details on other obligations in relation to attachment funding.

A Production Company may apply to ScreenWest for more professional attachments.

Study Guide Costs:

For those projects that do not have FFC funding, ScreenWest will require that the producer supply ATOM with three VHS tapes of the finished film for the possible production by ATOM of a study guide booklet. ScreenWest will cover these costs which are listed below as a reference. These costs must be included in the budget, and ScreenWest will recoup these monies should the funds not be utilised.

• $1,500 per hour;
• $2,000 per 2 hours, plus additional $500 per subsequent hour.

Study guides must be completed before the first Australian broadcast. ScreenWest will not pay for study guides where the program has already been broadcast.

Application, Legal & Administration Costs:

ScreenWest legal and administration fees are repayable as outlined in the Production and Investment Agreement with ScreenWest.

An administration and legal fee at a flat rate of 2%of the ScreenWest Investment, with a cap of $15,000, will be charged to the production company and will be payable from the first drawdown of the ScreenWest funds.

Applications:

Applications should address the assessment criteria for projects listed in the General Guidelines. Projects are assessed competitively taking into account the economic, employment, industry development and cultural benefits to the State, the proposed deal terms, and the funding available.

The applicant will generally be required to submit:

• A completed Application Form;
• A completed Production Fund Summary
• A brief one paragraph synopsis and a one page detailed synopsis;
• The final draft script(s) or treatment for Documentaries;
• Deal memos or other documentation giving proof of market place commitments (eg. distribution and pre-sale offers) and private investment;
• A summary of production financing and the deal sought from ScreenWest, including a breakdown of investment and other financial contributions including deferrals, draw-down and cashflow schedules, the proposed recoupment schedule & proposed copyright shares as outlined in the Production Fund Summary form;
• A full production budget which includes a breakdown of WA expenditure, ScreenWest and Production Company Legal fees, Attachment costs, Administration fees and Study guide costs;
• A list of confirmed and likely WA crew;
• A shooting schedule including a location breakdown;
• CVs of the project's principals, including key cast and crew;
• An executed letter of intent from a completion guarantor;
• A preliminary marketing strategy, including an estimate of returns from all media in all territories verified or provided by the distributors or sales agents attached to the project;
• If applying for a second series, applicant must provide sales figures on first series.
  

Applicants should be available for phone hook-up when the Funding Investment Committee convenes to consider the application in case the Committee requires any clarification.

Closing Dates:

The next closing date is 5pm Monday May 12 2008.

Applicants are strongly advised to contact the ScreenWest Producer Intern Mala Sujan (ph: 08 9224 7346) for further information.

Production Cash-flow Loan Facility:

ScreenWest offers short-term loans for producers seeking to cash-flow distribution guarantees or other market attachments. These loans are subject to the availability of funding, and applicants should contact ScreenWest for further details.

The interest rate applying to cash-flow loans will be set periodically based on the 90 Day Bank Bill rate rounded up to the nearest 0.5%.

Important Note: Notification of Decisions:

Applicants seeking funding of less than $25,000 will be notified in writing of the funding decision within five business days of the Panel meeting.

Funding between $25,000 and $50,000 requires Board approval and applicants will be advised in writing of the Board's decision within five business days of the ScreenWest Board's approval.

Where funding in excess of $50,000 is sought, decisions are made by the Minister for Culture and the Arts. Applicants will be notified of the Minister's decision within five working days of notification of that decision to ScreenWest.

All decisions may be made conditional on the applicant meeting specified requirements. Unsuccessful applicants will be advised of the decision after the decision has been made and where applicable, after the successful applicant has been notified.