discop link • #11

tools of businessTHE ART OF THE PRE-SALEBy Bob JenkinsThere are two distinct types of pre-sale and negotiating, each has a verydifferent psychology. Bob Jenkins talks to some experts and discovers thatthe one thing they have in common is it helps if you like playing poker.Sandra Carter, President, Sandra CarterGlobalAccording to Sandra Carter, presidentof Sandra Carter Global andan experienced producer / distributor,"there are two distinct types ofpre-sale. The first," she expounds, "iswhen the producer / distributor needsthe sale in order to complete theprogramme's funding. The second iswhen the seller has a programme thateveryone knows, or at least believes,will be a big hit, and everyone wants it.Both situations have interesting, althoughsubtly different nuances," sheexplains. "In the first," continues Carter,"two things will almost inevitablebe true. The first is that a substantialpart of the funding will already be inplace, and the second is that thebuyer knows that if you don't get thesale, there will be no programme tobuy, and, for the same reason, theyalso know that there is a minimumamount they have to pay."Carter's point about the amountof funding that would already have tobe in place is echoed by Anita Barnard,sales manger Asia, Central andEastern Europe at 3DD. "Usually,"believes Barnard, "where a pre-sale ispart of the funding of a programmethen it is almost always more of a coproductionthen a pre-sale, and that isa different ball game." This is a sentimentechoed by George McGhee, controller,programme acquisition at theBBC. "We would not normally acquiresomething just to get it made," revealsMcGhee, "unless we really believed init, and/or the talent involved. And," hecautions, "one of the pitfalls of such anacquisition from a buyer's perspective,is that you are told one thingabout the property, especially in regardto talent, and then it all changes,leaving you with a very different property.As a result," says McGhee, "inthe rare instances where we do makesuch an acquisition, we would generallyuse caveats requiring any changesto 'key' elements, especially casting,to be agreed with us."The second situation in which thepossibility of a pre-sale might be envisagedis where there is a general perceptionthat the property concernedwill be a huge hit. "The over archingfactor in this instance," says Carter,"is who started the process. If the selleris utterly confident they have a wildlystrong property," she goes on, "it ispossible that they will instigate theprocess, typically by calling for sealedbids. But," warns Carter, "this is a highrisk strategy. It is possible, especially ifone or more buyers decide not tomake a play, that the seller will endwith a low bid at which point, unlessthey are themselves a major player,they are in big trouble. If, however, abuyer approaches the seller with aAnita Barnard, Sales Manager for Asiaand CEE, 3DDhigh offer conditional on immediateacceptance without the propertybeing offered to others in the market,that sets up another fine call."3DD's Barnard agrees that, welcomethough high offers are, "whenyou are selling a hot show, it is veryimportant," she insists, "to be verycareful that you do not damage yourrelationship with other broadcasters.This," says Barnard, "is especially truein Central and Eastern Europe wherenew channels are being opened all thetime."Sandra Carter concurs. "If you sellwhat turns out to be a hit againstother broadcasters, without even lettingthem have a shot at getting it,then clearly, they are not going to bevery pleased with you," she observesdryly. But that is not the only potentiallynegative consideration that has tobe factored into any final decision."Additionally," explains Carter, "at thetime at which the offer is made youhave no way of knowing whether thatis, in fact, the best you could achievein that market, and, the only way inwhich you can establish that is by offeringthe property to other broadcastersthat will see the original offerwithdrawn, and it might be that thiswas indeed the best and it will then nolonger be possible to resurrect it."Underlining this dilemma, theBBC's McGhee says, "every project isdifferent and the circumstances arenever the same. Sometimes a pre-buywill be cheaper and have better termsand sometimes it won’t."Ultimately, Sandra Carter probablysums up the truth most succinctly."In the end," says Carter, "there is no'right thing' or 'wrong thing' to do, it allcomes down to how strong you believeyour property to be, how much youhave been offered and how much youenjoy playing poker." }54 DISCOP LINK • #11 • NOVEMBER 07