Assessing Balance: financial contribution
In your co-production application, you must divide the finance plan between the co-producers to determine the proportion of the finance contributed by each co-producer.
This division is referred to as the ‘co-production split’. Once this is calculated, the co-producers can identify whether the project meets the minimum financial contribution. The way the split is calculated is, however, not solely at your discretion. Some aspects of a finance plan are inherently connected to the nationality of one of the co-producers, in that the financial support can only be provided by a co-producer of a given nationality. This includes:
- equity and financial support provided by national or regional screen bodies are considered to be contributed by the co-producer of that country (eg, Screen Australia or Australian state screen agency investment is automatically considered a financial contribution of the Australian co-producer)
- tax rebates tied to the nationality of a producer are contributed by that producer (eg, the Producer Offset by definition is a contribution of the Australian co-producer), and
- pre-sales, licence fees and distribution guarantees for each co-producer’s ‘home’ territory must be contributions of that co-producer.
This means that Australian contributions from any of the above sources must be reflected on the Australian side of the ‘split’ (and the corresponding equivalent applies for your co-producer).
Remaining aspects of the finance plan are not considered to be automatically contributed by either co-producer, which means they should be allocated according to whichever co-producer brought that aspect of finance to the project.
In many cases, however, finance is jointly contributed, and producers can therefore determine the ‘split’ for these monies as negotiated by the co-producers and then outlined in the Co-producers’ Agreement. Contributions such as gap loans, equity from third parties, presales or distribution guarantees from other territories or an advance against RoW sales can be attributed to either, or both, co-producers according to what works for the producers.
Please note that a finance plan in a co-production application cannot be speculative; you must be able to document, to some extent, each aspect of the finance plan (except for contributions which are automatic, such as tax incentives). Screen Australia will accept a Letter of Interest as the minimum documentation.
Once the financial contributions of each co-producer are identified, you need to demonstrate to Screen Australia that your creative contribution is reasonably equivalent to your financial contribution.