Film Budgeting Essentials: Structure and Cost Components

Film Budgeting Essentials

General Budget Structure

The film budget is an essential tool used to estimate future costs. The budget is typically divided into two main categories:

• Below the Line (BTL): Refers to costs determined by market prices for factors clearly defined in the industry (e.g., equipment rentals, non-star crew wages).
• Above the Line (ATL): Consists of the costs involved in policy decisions made by the film production management. These costs are often accessible only to executive and managerial levels and include major talent fees and contingencies.

Budget Models and Data Inputs

There is no single, universal budget model. The numerical values that populate the budget sheets are derived from several key sources:

1. A Database: Lists the determined market prices for various factors involved in production, crucial for calculating the Below the Line budget.
2. Production Data: Corresponds to specific decisions the film producer must specify for the project. This data typically includes the producer's name and address, film title, date, location, and other relevant details.
3. The Breakdown: This is the detailed analysis of the script, which forms the basis for organizing the work across different teams involved in the film.

The Script Breakdown Process

The breakdown analyzes the production requirements contained in the script, classifying, grouping, and quantifying the elements that constitute specific budget items (e.g., technical elements, materials). While there are several formats (e.g., the literary script), the breakdown process is essential.

It is initially performed by the Production Manager and the Assistant Director, and subsequently completed by department heads, including those responsible for Art Direction, Cinematography, and Camera.

Financial Planning and Production Design

The budget model often extends to include the organization of expenditure over time, known as the Financial Plan, and the organization of resource flow, referred to as Financial Planning or the Investment Schedule. These elements are integral parts of the overall production design.

Detailed Film Budget Items

The following items typically make up the detailed budget sheets:

1. Argument (Script/Rights Acquisition)

   Covers the economics related to developing the film script. Includes: fees for screenwriters and consultants, copyright acquisition, other rights, and professional association fees.

2. Direction

   Refers to all costs arising from the task of direction. This is an Above the Line cost, including: director's fees, advisory fees, personal assistant (to the director), and professional association fees.

3. Production

   Covers all aspects related to the roles of the Executive Producer and/or Production Manager. Includes: producer fees, consultant fees, professional association fees, and general expenses.

4. Development

   Refers to costs generated during the initiation and development efforts of the project. This should include: general counsel fees, overheads, and travel expenses.

5. Staff (Personnel)

   This item usually has the highest percentage incidence in the budget. Staff can be subdivided into:

   • Technical Staff: Contracts framed within union agreements.
   • Other Staff: Personnel whose contracts do not include these union rules.

6. Cast (Acting/Artistic Personnel)

   Costs for the main cast are considered Above the Line (often referred to as 'cartel' or star power). This item also includes the cost of extras, categorized as:

   • Common Extras: Those who do not fulfill a special condition.
   • Qualified Inclusions: Professionals who possess specific skills required for the role.

7. Social Security

   Contractual relations between the producer and the various human factors involved in the production necessitate a number of tax obligations that both parties must comply with (e.g., typically around 6% of wages).

8. Art Direction and Construction

   Covers everything related to the construction and material elements of the visual image. This includes matters relating to Clothing, Makeup, Hair, and Props.

9. Wardrobe (Costumes)

   This item requires a detailed analysis of the needs arising from the breakdown sheet. Includes costs for materials, accessories, rentals, shopping, and alterations.