Public Media Content Fund Frequently Asked Questions

Public Media Content Fund Frequently Asked Questions

On what dates should the funding agreement start and end?

The start and end dates of the funding agreement are defined as the “Term.” The start date should be the date that the first budgeted expenses were incurred by the producer and the end date should be the date of expected completion of services by the producer. It is not unusual to have a start date that “predates” the signature date of the funding agreement if the producer is incurring costs/undertaking approved development, production or post-production activities.

I received funding for production only, not post-production. Why does the funding agreement require me to deliver a completed production?

When a producer receives funding for production expenses from a NMC member such as VMM, the funding is contingent upon the producer completing the production in its entirety. The reasoning behind this requirement is threefold:  (i) during the production phase, the producer will secure all of the elements (e.g., footage, releases, etc.) necessary to complete the production (put it “in the can”); (ii) the producer has secured or is in the process of securing any funding necessary to complete the production; and (iii) the NMC member (VMM) is funding the production at a key stage and must protect its investment by requiring completion and delivery of the production as a condition of full funding. This is a non-negotiable term. The producer may use NMC member (VMM) funds to cover both production and post-production activities, so long as such expenses are included in the budget. The producer is not precluded from seeking additional completion funding from VMM or from other NMC members.

Why must I report and share in revenue with VMM for 16 years?

The 16-year reporting period is a requirement of CPB and is passed on to producers through each NMC member, including VMM, in its funding agreements. The reporting requirement was increased from 15 to 16 years in the FY2015 CPB Grant Agreement. This term is applicable to all R&D, Production, Completion and Webisode agreements. This is a non-negotiable term.

Why must I give VMM exclusive public television rights? What if I also receive money from ITVS and ITVS requires those rights as a condition of funding?

As a funder of public television productions, producers must provide each NMC member, including VMM, with exclusive public television rights to secure its interest in/rights to the program. This right guarantees that the program will be available exclusively for public television broadcast. CPB also requires that each NMC member secure the exclusive public television rights to protect its (and CPB’s) financial investment. A NMC member’s funding of a program, presentation rights, and exclusive public television rights will not preclude funding from ITVS, CPB, PBS or other public television sources. Generally, the agreements of subsequent funders will reflect that the NMC member holds the exclusive public television rights. Furthermore, if a producer has already contractually assigned the exclusive public television rights to another entity such as ITVS prior to seeking funding from a NMC member (and provides a copy of the signed contract), the NMC member will amend its agreement to reflect the rights held by ITVS or the other public telecommunications entity. If you are receiving or plan to apply for funding from ITVS or from another public telecommunications entity, you should discuss this with VMM staff.

Why must jurisdiction for VMM's funding agreement be in Nebraska?

The jurisdiction of an agreement specifies the laws of the state that will govern the terms of the agreement in the event of a dispute and/or lawsuit between the parties. Since VMM funds projects in all 50 states, it would be quite risky and expensive for it to be subject to the laws of all other states. As a funder, each NMC member’s policy, including VMM’s, is to maintain venue in the state of its incorporation. This is a non-negotiable term due to NMC policy and out of fairness to all producers receiving funding. The only exception to this requirement is when a NMC member funds a public television station that is a licensee of a state university – state universities, which are part of state government, traditionally cannot be subject to the laws of any state except the state in which they are based. Therefore, when VMM funds a station licensed to a university, we may delete the jurisdiction provision entirely, thereby leaving jurisdiction “open-ended”.

When do I need to secure Errors and Omissions Insurance?

E&O insurance should be secured after completion of the production but prior to any distribution of the production. The E&O policy should cover any intended distributions of the production (e.g., to the home video market), and it must cover the broadcast of the production over public television and/or Internet distribution (with each consortia member and CPB being additional named insureds). A copy of the E&O insurance binder is now required as a final deliverable prior to the making of the final payment under any funding agreement or acquisition. In the event the producer intends to distribute the production in other markets (e.g., film festivals, DVD) or VMM or other funders also acquire additional distribution rights (e.g., podcasting), the E&O policy must also cover each of those distribution methods.

Why does VMM have approval rights over my deliverables, budget and work scope?

As a funder, each NMC member has an interest in the production including approval rights to ascertain that the production stays on budget, meets certain public broadcasting standards, and conforms to the original proposal submitted by the producer, among other things. Each NMC member also has contractual obligations to CPB, which receives its funding from the federal government. CPB’s receipt of federal taxpayer dollars is conditioned upon a number of obligations, including oversight of production budgets and complying with federal laws and regulations. These obligations are passed on to each NMC member, including VMM, when it receives funding from CPB. The approvals specified in the funding agreement reflect VMM’s obligations to CPB as a NMC member as well as its own corporate policies and Board requirements. The approval provisions are not negotiable.

Do I need to work with a fiscal agent?

Whether or not a fiscal agent is required is at each NMC member’s discretion. It is advisable to require a reputable fiscal agent for a “first time” producer, multiple producers co-producing a project without an umbrella corporation or for a producer who has a history of producing great television programs but difficulty keeping accurate financial books and records. Fiscal agents generally take a percentage “off the top” to administer a production, and that percentage is on the rise. A cap of no more than 10% is allowed for a fiscal agent of a public television production. A producer may submit a proposal for funding consideration to VMM without a fiscal agent in place. Producers who have not previously received funding from VMM may be required to have a fiscal agent. The fiscal agent will be a party to the funding agreement and will be expected to assume responsibility and accountability for Producer’s fees, expenses (either spent or committed) and all funds to be received by Producer, including responsibility for tracking each transaction for general ledger reports and ensure that the chart of accounts matches the budget categories proposed. The fiscal agent is also expected to sign off on all reports and request and receive payments on Producer’s behalf.

How is VMM's share of net revenue calculated and is it negotiable?

The standard revenue share in the agreement is the minimum amount VMM may request, a policy set by CPB’s Board of Directors, and is not negotiable. The share is based on VMM’s total contribution to the production’s total budget (including R&D and completion), which is then multiplied by 50%. If VMM provides both R&D funds and production funds, its share will reflect the combined funding from both agreements. A calculation and example is provided in the Exhibit entitled “General Terms and Conditions.” In certain instances, VMM may share in additional revenues from the production if it serves as a distributor of the production to ancillary markets (e.g., home video, foreign broadcast, educational), but these rights are negotiated by way of a separate license agreement with the producer. VMM may request a revenue share that is greater than the minimum amount required by CPB, but cannot agree to a lesser amount.

Why does VMM ask for distribution rights (home video, etc.) to my production in addition to public television rights?

As a funder and distributor, each NMC member is uniquely positioned to distribute its funded productions into markets beyond public television and may have developed contacts and distribution channels that are difficult for any one producer to duplicate. Producers will be offered additional distribution opportunities through VMM, including educational audiovisual (all formats), home video (all formats) distribution through Theatrical, non-theatrical, television (all formats) can also be included in this distribution opportunity.

Why does VMM have approval rights over any decreases or increases in the total production budget and why does it limit budgetary reallocations between budget categories in Exhibit B?

These requirements are required by CPB as part of its annual grant to each NMC member, including VMM, and are not negotiable. These terms have been contained in public television funding agreements (including those from CPB and ITVS) since the mid-1990s. These requirements exist to protect the financial investment of the funder and to ascertain the funds are being used by the producer prudently and appropriately.

If VMM cannot secure a national public television release of my production, why don't the rights revert back to me automatically?

A NMC member such as VMM, is not only a funder, presenter and distributor of public television programs, but it oversees the use of funds allocated to it by CPB. As such, an automatic reversion of rights might not be in the best interests of VMM, CPB, or the public broadcasting community in general. In certain states, the automatic reversion might also run afoul of state laws or impose tax or other financial obligations on VMM and/or the producer. VMM is open to discussing and negotiating a reversion of rights on a case-by-case basis, subject to CPB’s approval. This is a CPB required term and is not negotiable.

Why does VMM have prior approval over any presales or ancillary sales of my program and over other program funders?

In order to protect its investment in the production and to ascertain that the production meets all applicable public broadcasting standards (particularly those limiting underwriters and their messages and payola/plugola requirements), each NMC member, including VMM, has approval over any party that is contributing money to or securing rights in the production. Although CPB may not make these requirements of producers in its own CPB/producer agreements, it does impose this obligation on each NMC member and it is thus passed on to producers.

Why do VMM funding agreements require that funds be kept in a separate account?

In order to facilitate financial reporting and audit requirements, to limit any co-mingling of funds with general business/other production funds, and to comply with industry and accounting standards, each NMC member, including VMM, requires that producers establish a separate bank account for each production.

Why does VMM's funding agreement require that I clear/provide unlimited public television releases in four (4) years?

Each NMC member, including VMM, is contractually obligated to secure at least six (6) releases in four years for each production funded with CPB money. This allows station programmers flexibility in scheduling the program year-round over the four-year period and not be limited to a set number of releases. For purposes of production, securing releases and budgeting, producers should secure at least “6/4” unless specifically authorized under a pre-existing agreement between the producer and PBS or APT. These special situations should be discussed with VMM staff.

Why must I secure music rights for some distributions but not for a public television program?

For non-commercial public television broadcasts, most music is covered for use under a compulsory license and voluntary licenses negotiated by PBS and CPB for publishing and sync rights. Producers must submit music cue sheets to the NMC member, including VMM, as part of the required production deliverables, but the producer is ultimately responsible for all filing requirements associated with music licensing. CPB makes any necessary payments to the music publishers, Harry Fox, etc. for use of the music in a public television broadcast. It is important to note that not all music is covered for broadcast (e.g., dramatic rights) and producers must directly secure music rights for other distributions of their production (e.g., home video). The distribution of programming over the Internet poses a new set of challenges and requirements for music rights. In certain instances (e.g., streaming), music rights may be covered under the existing PBS/CPB licenses, but no legal opinion has been issued to confirm this. Additionally, other distributions of a program (e.g., home video) are not covered under the PBS/CPB compulsory or voluntary licenses and producers must clear music rights for the program to be distributed in those markets.

What is the scope of the Web Content Agreement?

The Web Content Agreement is new and covers content that is produced for primary distribution over the Internet – usually known as “webisodes” or other short segments – and is not produced specifically for broadcast. A program that is produced for broadcast, but which has elements that may be distributed over the Internet, is funded under VMM’s standard production or completion agreement.

Since funding for webisode programming also comes from VMM’s annual grant from CPB, certain requirements contained in VMM’s standard production agreement (other than those pertaining to webcast rights) are also contained in the Web Content Agreement.

What happens after I submit final deliverables to VMM?

VMM reviews the deliverables for accuracy and completeness and will issue the final payment owed on the production. VMM then submits the completed program to PBS or to another “Designated Distributor” for consideration. This can take up to a year or more. If the program is “picked up” for distribution, the exclusive public television distribution period (two years for broadcast and one year for webcast) begins.

What if I am able to secure an alternative distribution deal?

By entering into a production funding agreement with a NMC member such as VMM, you are granting the exclusive right to distribute the completed program via public television pursuant to the terms and conditions of the production agreement. VMM cannot agree to include provisions for alternative distribution in its funding agreements due to its contractual and fiduciary obligations to CPB, and will not normally agree to allow alternative distribution of its funded programs. Although there may be rare situations where seeking a waiver from the exclusive public broadcast rights may be in the best interests of VMM and CPB this is usually the case only in the event that VMM has been unable to secure public television distribution for the program. In such cases, VMM may agree to alternative distribution but will retain its right to a revenue share from the alternative distribution and to all of its other rights under the funding agreement. Except in these rare situations, if a producer wants to pursue alternative distribution for its program after entering into a funding agreement with VMM, all VMM funds must be repaid in full and with penalty.

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