The head of business affairs consultancy TVA concludes his exploration of deal-making in the scripted sector, this week focusing on the role of the agent in securing revenue streams for the format owner.
Simon Vyvyan
In any negotiation, it is always a good idea to try to understand the position of the other side and, in this context, the agent will normally strive to achieve the following key outcomes in a format agreement:
Right of first refusal: if the writer is also the owner, the agent will want their client to enjoy a right of first refusal to write all (or the majority) of the scripts in the first and subsequent series (including spin-offs) as well as any future screenplay, stage play, radio adaptation, novelisation or changed format version based on their format.
Secondary rights: they will want the owner to share in future revenue streams that might derive from all forms of secondary rights exploitation, including changed format, film, publishing, stage and radio as well as any merchandising that attaches to such activities.
Reserved rights: they may also want certain secondary rights to be reserved to the owner and it is worth noting that the BBC’s Model Format Agreement (MFA) states that the owner shall retain the right to exercise “any rights in the format not specifically granted” in the MFA. This is the polar opposite of the way that most format agreements are drafted in the indie sector and this reservation should be avoided at all costs because, if this point is conceded, it means that control over newly created (but not yet existing) rights may end up being lost to the owner. This is not good news if you are trying to build up the value of your company’s library.
Bells and whistles
If the writer is established and sought-after, the agent will also use the format agreement negotiation to push for some or all of the following additional revenue streams:
Production fee: some agents will ask producers to pay the owner a percentage of the producer’s production fee in recognition of the role that the format has played in winning the commission. This is, for obvious reasons, extremely unpopular with producers. This demand is usually resisted by the producer but other ‘bells and whistles’ are often traded as a result.

Net profits: in addition to the 5.6% multimedia royalty and the subsequent use advance (SUA), agents often now push for a share of the producer’s net profits from programme sales. The range of agent demand is 5% to 25% and it is reasonably common to end up in the 2.5% to 10% area. Care must be taken to ensure that the definition of ‘net’ is well drafted so that it is clear that other profit participants (e.g. the commissioning broadcaster) come higher up the ‘waterfall’ of third-party payments.
Re-commission bonuses: it has become quite common for producers to agree to pay owners a cash bonus in the event that the first series leads to further series.
Episodic fees: it has also become increasingly common for agents to insist that the owner should perform the role of associate producer or consultant producer alongside the producer or to be an executive producer. Depending on the circumstances, the format-creating writer is either warmly welcomed into the production team and paid accordingly or given a passive role with passive fees.
Consultation/approval rights: consultation is obviously less onerous than approval but agents will often want one or the other and it is becoming common for A-list deals to include consultation rights over the identity of the other writers, director and lead cast.
Script agreement
The above revenue streams will be dealt with in the format agreement and will be in addition to the following revenue streams, which will be dealt with in the script agreement:
Script fee: agents will want to achieve a script fee that recognises the writer’s current status and ‘going rate’ which will normally be well above the minimum rate cards for original drama published by Pact, the BBC and ITV.