Fremantle, CJZ take sharply different positions on Offset reforms


Fremantle Australia and CJZ both want the TV Producer Offset to be doubled to 40 per cent and the Offset extended to entertainment shows – but beyond that they have sharply different views on key aspects of media reforms.

CJZ argues that only entertainment programming based on locally developed concepts should be eligible – and the $500,000 per hour threshold should be lowered to accommodate lower budget productions.

Fremantle proposes a 30 per cent Offset for entertainment, increasing the Location Offset to 30 per cent and lowering the thresholds of the Location Offset to support large budget entertainment shows.

So the multi-national company would not be pleased with CJZ’s submission to the ‘Supporting Australian Stories on Our Screens’ options paper review, which calls for all Offsets to be taxable as well as reform of the PDV Offset.

“We are now seeing the PDV scheme being misused at significant cost to the taxpayer,” CJZ’s Nick Murray says. “The ACMA discussion paper states the policy objective of the PDV as being ‘to attract post-production, digital and visual effects production to Australia, regardless of where the film is shot.’

“Where in this objective does it say that local remakes of international shiny floor entertainment formats should also get the PDV incentive? But that’s what’s happening.

“Foreign formats such as The Voice, Got Talent and MasterChef are getting large untaxed PDV payments, while smaller budget or shorter run local shows in the same genre don’t.

“Further, the producers of those shows are then able to remit the proceeds to their international shareholders tax-free because the PDV and Producer Offsets are not considered taxable by the ATO.”

Both Fremantle and CJZ advocate imposing local content spending obligations on SVOD services (Foxtel’s Binge should also comply when it meets the SVOD threshold, according to Fremantle) and additional funding for the ABC and SBS.

The points system for the commercial FTA networks’ quotas should be redesigned so there is no drop in Australian drama and the need for P and C programs should be removed and replaced with a new requirement for national broadcasters to allocate dedicated funding to children’s programming, according to Fremantle.

‘MasterChef Australia.’

CJZ proposes overhauling the points system on a sliding scale based on the licence fee rather than production budgets, which would penalise cheap New Zealand imports and reward higher licence fees with a maximum of 6 points for fees over $650,000.

Comedy and miniseries should get equal points and there should be a ‘risk factor bonus’ for genres such as scripted comedy and an enhanced independent production quota, either as a percentage of all production or as bonus points, CZJ says.

Fremantle’s submission gives some fascinating insights into its size and scale. The Australian company produces more than 275 hours of content annually, employs more than 500 people across the production business each year including an in-house post-production unit, and contributes more than $52 million in wages and related expenditure.

Now in its 35th year, Neighbours employs 170 cast and crew, producing 258 episodes over 43 weeks with an annual wages bill of $26 million.

Fremantle CEO Chris Oliver-Taylor says: “The result of a change to the regulatory settings should be an overall increase in the commissioning and production of original, new Australian content.

“The most critical change required to achieve this is bringing currently unregulated platforms into a regulatory regime that requires them to commission new Australian content and maintaining a regulatory framework on commercial free-to-air broadcasters and pay television.”

Murray concludes: “Without lateral thinking on how to help the industry create new local ideas, Australia will become an outpost of foreign companies simply remaking ideas that have already been made somewhere else. This is not helpful for exports and does not foster creative thinking.”