Doubling Budgets and Budget Doublespeak - TvTechnology

Doubling Budgets and Budget Doublespeak

When I moved into my first production manager position, my predecessor had the reputation for being able to predict almost exactly what a particular project would cost. Since we were good friends, I asked him how he did it. "Take the most you think it could possibly cost, and double it," he said. What can I say? He was unbelievably accurate.
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When I moved into my first production manager position, my predecessor had the reputation for being able to predict almost exactly what a particular project would cost.

Since we were good friends, I asked him how he did it.

"Take the most you think it could possibly cost, and double it," he said.

What can I say? He was unbelievably accurate.

Since we're not living in the pre-PC era like my friend was, we're going to be expected to produce lots of spreadsheets and do what-if scenarios to back up our predictions. But we're also going to be expected to be accurate.

EXPECTATION GAP

First step: Make sure everybody's expectations of the project are the same. That can be relatively easy if all parties to the project are within the station and have worked together before. Still, it doesn't hurt to go over expectations. Is there a previous project to compare this new undertaking with?

If there's an outside partner, the "expectation gap" can be really wide. Getting this settled may require being part of the negotiating process on the project itself.

Every television show is new and unique, but there have been untold millions of television shows done that can be used as examples. It's reasonable to ask the outside partner to show you an example of what is expected. If it's an example of what was done last year with a different station, what was the outside partner happy with and what do they expect to be changed this time around?

If that outside partner can't produce an example of what they want, we can show examples of work our own stations have done, asking if they're similar to what they have in mind.

What are the financial terms of the project? Is there a split of the gross proceeds that leaves the station to cover all the production costs? That can be a nightmare, because the outside partner has no financial interest in holding down production costs. Better to have a situation where the outside partner splits what's left after production costs have been paid.

Also, there's some due diligence to be done. If others have worked with this outside partner before, it won't hurt to talk with them. If you're competing with their previous partner for the project this time, getting this information can be dicey. But it's still good background to have.

Once I have a clear picture, or as clear a picture as I'm going to get, my first step is to figure out what I can control and what I can't.

Sometimes that's as easy as who works for me and what am I really in charge of.

I know my own people's salaries, and who and how many I'm going to assign to the project. That's what I can control.

For other departments, I really need to get a commitment to the same sorts of things. My advice: Get that commitment from the department head or someone he designates, not from someone in the middle. The department head can have your scalp for working through someone else, and only the department head is really accountable for the estimates anyway.

I learned from experience to be especially wary of station talent who want to negotiate a side agreement for hosting a production. More than once they told me the production in question wasn't covered under their contract with the station, only to find that not to be true. The solution to this one is simple: "We'll talk about this with your department head."

Whether it's my own department or others, union contracts can be a godsend for budgeting because the rules are usually spelled out explicitly. And with staffs as tight as they've been for quite some time, I always assume everybody's going to be on overtime and budget accordingly.

One of the real bugaboos for budgeting is travel. I always tried to establish reasonable travel rules that allowed comfort and flexibility, but still kept some kind of a lid on the spending.

I'm not telling anyone anything they don't already know that buying airline tickets ahead of time can save a considerable amount of money. However, the truly inexpensive tickets usually are non-refundable and bear a considerable cost to make changes.

We are also living in a time of flux in terms of travel agencies. Some airlines don't work with them at all, and there's some question as to whether they can access the lowest Web rates. But travel agents can usually give an ironclad top price for travel and lodging, which can be critical for accurate budgeting.

ELBOW ROOM

Budgeting for equipment can be relatively easy if you're using a vendor you've got a long relationship with. The newer the vendor, or the more different the project, the less accurate the forecasts are going to be.

Which is why you need to build in contingency funds. I don't know about you, but I can never think of everything. So I build in plenty of elbowroom.

If the contingency funds come to 20 percent of the total budget and are included in a line item titled "Pad" or "Misc.," they're likely to be a target for elimination by a quick-scanning general manager; better to take that 20 percent and apply it to each line item: equipment, personnel, travel and so forth.

Hope this is helpful; there is probably tons more to say on this subject. But I'll leave you with a story about one of these projects we got involved with a number of years ago.

There was a state high-school football contract we wanted to pick up. We were partnering with the state high-school athletic association.

Sitting in the negotiation session, I learned the association wanted the right to pick any game in the state for the weekly telecast. Since we weren't in the state of Rhode Island, there was the possibility of 300-plus miles of travel each way under that provision.

We managed to get the game selection limited to 60 miles in any direction from our station.

That would have been swell except that anyone who looks at a map of Seattle will find it's bordered on the west by Puget Sound. And the hottest team in the state that year was located on the other side of Puget Sound, but not quite 60 miles away. (You can bet I measured it!)

So for several games, we ended up spending hours waiting in line (Saturday mornings) traveling by ferry to the other side; same thing coming home. And of course that busted my manpower budget to pieces.

Now if I'd just doubled my original highest estimate, I might have come out just about right.