Broadcasters and producers are being asked to put their money where their mouth is in the new eligibility criteria for the Canadian Television Fund.

With guidelines released Dec. 10, the 60-page, seven ‘module’ opus splices, weights, rates and navigates the means by which next season’s $197-million ctf will be allocated amongst drama, children’s, documentary, feature film and performing arts programming.

With some calling it a brilliant balance of the differing producers’ agendas and others calling it an unbelievably puzzling blur of subjective criteria scuttling the once straight-up Licence Fee Program, key to the new guidelines is the ranking of productions for financing based on the size of the licence fee from the broadcaster.

For example, in the new point system which has replaced first-come, first-served in the lfp, a Canadian broadcaster putting up 50% of the licence fee on a one-hour, English-language drama program with a budget under $250,000 per episode will give its project 35 points as opposed to the same project licensed at 25% of the licence fee, which only gets 10 points.

For big-budget drama (over $750,000 per episode), a broadcaster allocating $225,000 per hour will earn the production 35 points versus a mere 10 which comes with $170,000 per hour.

As the lfp is divvied up, those projects with the most points take the money, with financing being allocated pyramid style until it runs out.

‘Twenty percent [of a project’s budget as a licence fee] won’t get you anything these days,’ says Richard Stursberg, chairman of the ctf, ‘because you’re going to be competing with everybody.

‘People have criticized private broadcasters in the past for pretending to be interested in Canadian programming but not really doing so. Now they have really stepped up and taken a big bet on Canadian programming.’

In tandem with the points for increased licence fees are more points for private ‘risk dollars,’ including equity investments of up to 20% of the budget by broadcasters, distribution advances (which are capped at 20% towards ranking if the distributor is also the producer or an affiliate), foreign presales, sponsorship and unlimited third-party investment. They do not include deferrals, tax credits, other government money or private fund equity or grants.

The effect of the new focus on private investment is intended to place the decisions as to what gets financed in the ‘hands of the market.’

‘The more the private broadcasters put in by way of licence fees above threshold and the more producers put in by way of cash at risk, then the more likely you are to get access to the government money,’ says Stursberg.

‘It’s that simple.’

Only Canadian need apply

The lfp’s point system comes into effect only after ensuring that the projects adhere to the fund’s four Essential Requirements: that the program speaks to Canadians and reflects Canadian themes and subjects, rates 10/10 cavco, that underlying rights are Canadian owned, and that the story is shot and set in Canada (pb, Oct. 5).

The distinctively Canadian test will be applied to all projects seeking funding from either the eip or lfp, and represent ‘a dramatic increase in the Canadianness associated with the fund,’ says Stursberg.

‘You can’t come in the door until you pass those distinctiveness tests.’

As expected, exceptions to the distinctively Canadian rules have been made for children’s animation and documentary genres, including allowances for animation set in ‘fantasy’ and documentaries that shoot outside of Canada but tell a Canadian story.

‘We’ve created arrangements that allow them to maintain the Canadian distinctiveness test but reflect the differences between the genres,’ says Stursberg.

On the eip side, little has changed except that the process has become more transparent, with the qualifying criteria being explicitly laid out in the form of a scorecard.

‘People can see not only what considerations are taken into account explicitly but the relative weighting that they’re given,’ says Stursberg.

Like the lfp, the eip criteria also includes investment opportunity, dollars ‘at risk’ and broadcaster licence fees over minimum threshold, with Stursberg noting that 20% of the total weighting value in the eip scorecard incorporates the criteria used on the lfp side.

‘The reason we did that was to make sure that the two [programs] will work effectively in harmony in terms of their decision-making structures.’

eip-specific criteria also includes corporate development considerations, with priority given to small and medium-sized producers, regional and official language minority production.

Changes for CBC

While the private broadcaster floors have not changed, the guidelines have mandated a minimum licence-fee threshold specifically for projects licensed by the cbc/src.

In addition, the national public broadcaster’s lfp envelope has been reduced to ‘up to 38%’ from ‘up to 50%.’ The cbc will now be able to access 45% to 55% of eip television programming resources as opposed to a rock-solid 50%.

The 38% lfp envelope reportedly mirrors the cbc’s historical draw on the fund. Stursberg says the cbc agreed to this reduction because it recognized that the demand for the fund would be greater this year than last.

Stursberg says that because the cbc will not compete against itself for fund dollars and thereby raise licence fees and the amount of private investment – which is supposed to happen on the private side – minimum licence fee thresholds for the cbc were dramatically increased ‘to make things fair.’

‘We are stretching the private sector through this machine,’ says Stursberg, ‘so we will provide the cbc with a stretch and we will guarantee that they will move up beyond where they were historically.

‘They [cbc licence fees] are higher now in most cases than they are likely to be from the private sector.’

For cbc’s big-budget (over $750,000 per episode) English drama projects such as DaVinci’s Inquest or Black Harbour, the licence fee threshold is now $225,000 per hour or 25% of the budget if it is less than $750,000.

On the French-language side, src must pay licence fees of 45% for shows with budgets less than $250,000 per hour, 27% for those budgeted between $250,000 and $750,000, and pay licence fees of $200,000 per hour on French drama shows budgeted at over $750,000.

When asked if this might be too much money for the cash-strapped Corp to pay in licence fees, Stursberg replies, ‘We don’t expect everybody [private broadcasters] to make that, but we’ve got to put some pegs in the ground here. We’re trying to maximize the efficiency of the utilization of the public money, and maximize the amount of Canadian production.’

With the federal government’s allocation of money for the cbc unlikely to increase anytime in the near future, the cbc will now be paying higher licence fees for ctf shows out of a stagnant budget.

The result could be less cbc projects being licensed and the mandated thresholds for the cbc could also result in more window/licence-sharing by the cbc with private broadcasters, as it has in the past with Traders and Emily of New Moon. New criteria for these kinds of partnerships stipulates that a shared project accessing the private broadcaster envelope must have a 20% licence fee threshold or $150,000 per episode.

In what appears to be a small victory for the national public broadcaster, projects licensed by the cbc seeking lfp funds are not required to adhere to the lfp project-ranking criteria. The cbc is also allowed to use its 38% lfp envelope on whatever projects or genre categories it chooses.

At first blush, the caps on big-budget dramatic series ($750,000 per episode or more) are down slightly from last year. For 13 episodes or less, the eip cap is $175,000 per episode to a maximum of $2.3 million. The lfp cap for 13 episodes or less is $175,000 per episode to a maximum of $2.3 million. Total ctf cap is $350,000 per episode to a maximum of $4.5 million for the series.

The same math applies to the 13 episodes or more, except for each episode over 13 up to $220,000 per episode will come from the lfp to a maximum of $3.8 million. The combined ctf financing cap for a drama series is $6.1 million.

The ctf will only participate in one series per broadcaster owner group at a level which exceeds $4.6 million and only one which receives the combined $6.1 million cap for 20 episodes.

According to Toth, the lfp will actually have more program dollars than the eip because of increased revenues from cable and other bdus. Although he wouldn’t confirm the numbers, word is that there’ll be roughly $18.6 million for private-sector English-language drama from the lfp side and $14.5 million from the eip.

Regions rejigged

Keeping with its goal of stretching fund dollars while placing more onus on private dollars, the ctf has cut the regional bonus from 10% to 5% of a project’s budget, but has increased the minimum licence fee threshold for regional projects from 15% to 20%.

Whether or not broadcasters will choose to solicit projects from the regions at a higher licence fee remains to be seen, but both Stursberg and Toth feel that the change will have little impact on the amount of regional production.

‘We don’t think it should impact the regional stuff,’ says Stursberg. ‘Saying that the broadcaster has to pay the same threshold for a production in the regions as in central Canada seems to me a mark of respect for the quality of regional productions.’

On the eip side, there remains, says Stursberg, an explicit preference for regional production as the fourth criteria in the eip evaluation grid. ‘Our general sense is that this [the regional incentives and criteria] should ensure. . . that we get a good distribution of projects across the country.’

The ctf will release its full schedule of cross-country meetings to explain the guidelines this week. Sessions begin Jan. 6 in St. John’s and run through to Jan. 15.