Terms of Trade FAQ

Terms of Trade FAQ

In April 2011, the Canada Media Production Association (CMPA) and Astral, Bell Media, Corus, Rogers Media, and Shaw Media signed a terms of trade agreement on behalf of all Canadian independent producers (The CMPA hopes to extend this agreement to all broadcasters in Canada. CMPA and CBC had entered into negotiations in July, but the postponement of the CBC licence renewals by the CRTC has delayed any further negotiations).

On August 1st, 2011 the entirety of the agreement came into effect; all contracts negotiated with the aforementioned parties must be modeled from this agreement. It is important for every documentary producer to understand the Terms of Trade agreement. This small introduction to the document will provide some answers to frequently asked questions, links to resources, and who to contact in case of disagreements with broadcasters.

How long is the Terms of Trade agreement (TOT) in effect?
TOT expire when the longest of next issued licence of the participating companies expire (5 years from July 27th, 2011). The agreement can be re-opened in two years.

Who is covered by TOT?
All English language independent producers producing content for the aforementioned companies.

What kinds of productions are covered by TOT?
TOT covers only commissions, not acquisitions, broadcaster-affiliated or broadcaster in-house productions, service production, or unrelated digital projects.

What aspects of production does TOT impact?
It defines boundaries and sets limits for all stages of the production process:

• Development and Evaluation
• Licensing Conditions
• Editorial Control
• Licence Term
• Rights
• Equity
• Super Licence Fees (A licence fee equal to either 60% of the budget of a production or the combined amount of the maximum CMF threshold and licence fee top up. This licence opens up negotiations for exclusive producer rights, such as profit-sharing, non-theatrical sales, and DVD sales)
• Producer Tax Credits
• Timeframe and Administration

Impact of Agreement
Producers will receive higher revenue through:

• Shorter licence terms (5 year maximum)
• No automatic co-terminous
• Greater rights retention
• No deferral of fees and overhead
• 25% tax credit retention (Broadcasters can only request producers to invest up to 75% of their tax credits)
• Producer recoups on equal footing with Broadcaster
• Tax credit treated as Producer equity investment
• Better quality terms
• Transactional rights subject to potential revenue sharing

The prescribed timeframes of the agreement let producers plan their productions in a more predictable manner.

Dispute resolution allows for an additional forum to expose broadcaster non-compliance and update the terms to reflect changing broadcaster practices and production conditions.

How to leverage the power of Terms of Trade?
The power of the Terms of Trade agreement originates from the solidarity of the production community. Producers must be on guard for broadcasters who will exploit any ignorance of the agreement. All producers must educate themselves about the terms of the agreement. Knowledge is power.

Learn more
click below to view the Terms of Trade agreements with Astral, Rogers, Bellmedia and Shaw as well as Corus as negotiated by the CMPA:
http://www.cftpa.ca/terms-of-trade/index.php

The CMPA is also in the process of developing a FAQ and a Terms of Trade Guide on their website for the production community. The CMPA will also be aiding all producers of (including non-CMPA members) during this period of transition. Please contact them regarding any questions about the agreement, about new contracts that invoke the Terms of Trade, or to report broadcaster non-compliance.

Contact Information:
1-800-267-8208
1-416-304-0280

John Barrack
Chief Operating Officer and Chief Legal Officer
John.barrack@cmpa.ca
Ext. 227

Reynolds Mastin
Counsel
Reynolds.mastin@cmpa.ca
Ext. 225