Wednesday, March 12, 2008

I Am Not A Hothouse Flower.

REALLY I'M NOT. But somehow, Uncle Jim Henshaw just has a way of prying the boards out from covering up the whole kissin-yer-cousin, doing nasty shit in the pews and sneakin smokes in the parlor nature of the Canadian broadcasting racket.

Even the stuff I knew already seems...shocking.

Remember that great moment in Lawrence of Arabia when O'Toole shouts "NOOOOO PRISSONERRRS!"

Well, how about Henshaw standing there, staring down the parliament block or the CRTC in Gatineau screaming, "NOOOO ACCCOUNTABILITYYYY!"

So, let's start with tax credits...

Allow Jim Russell, a partner at Heenan Blaikie LLP and expert at entertainment law explain them as he did in last Saturday's National Post...

"When the tax credits were first brought in, in 1995, the rationale was that they wouldn't be included in the financing plan for a show. They were designed to allow producers to build up their equity in their company between projects. And it took all of about two seconds for broadcasters, distributors and other stakeholders to say 'No, producer, that's your skin in the game'."

You can read the full article by Joseph Brean and its well-written primer on Canadian film financing here.

Prior to 1995, Canadian networks paid license fees on a par with the rest of the world, that being 60% of the total cost of a program. This meant for an average $1 million dollar hour of drama, the broadcaster would ante $600,000; receiving in return the right to all domestic broadcast revenue and usually a percentage of equity in foreign sales or future earnings.

With the advent of tax credits, the Broadcaster contribution dropped to around 20%, or $200,000 for that same hour with the same benefits in return. In other words, $400,000 in taxpayer and cable mogul money replaced their own investment without impacting their earnings.

Now this was specifically forbidden when the tax credit system came into effect. Yet it goes on every day and the Canadian Film and Television Producers Association (CFTPA) and others reminded the CRTC of that fact during last month's CTF Hearings. But it didn't change anything.

So your tax dollars and cable fees continue to be used to reduce the costs of Canadian Broadcasters in order to increase their profits.

And, in case you haven't noticed -- there never seem to be any profits to be shared with either the people who made the show or you guys who paid for it.


Apres lui, le deluge...?

3 comments:

Ed McNamara said...

When the tax credits were instituted, not only did broadcast contributions go down, but production costs, specifically the cost of labour, went up. I always wondered whether C-10, if passed, would bring a change in business practices, where tax credits would be forced out of the financing structure and allow the kind of investment in company equity the article mentioned. Call me a cynic, but I can't ever see it happening.

jimhenshaw said...

DMC,

Thanks for the kind words and the link but I'm from Saskatchewan. Does that last line mean "Hey, your fly's open?

Jim

Cunningham said...

After reading the full post, Jim it sounds like not only is the fly open, but there's a few dollars hanging out too...