Screen NSW weighs up completion bonds
The role of completion bonds, which protect screen investors from budget and schedule overruns, is being examined by Screen NSW.
A spokesperson for Screen NSW confirmed that the state agency is undertaking an industry survey "to ascertain current industry practice in relation to completion bonds, as the approach to risk assessment varies across screen agencies and broadcasters".
Screen Australia and most state agencies generally require a completion guarantor on any feature film or TV series in which they invest, giving an extra layer of certainty that a film will be completed on schedule and on budget.
However, completion bonds can add a significant amount to already tight production budgets even when the risks being insured for are relatively low. Screen Australia board member and filmmaker Robert Connolly raised the issue in an AFTRS white paper in 2008, arguing for greater flexibility as a way to extract more from declining budgets.
The award-winning indigenous drama Samson and Delilah, made on a budget of about $1.6 million, was one of the few local productions that was made without a completion bond. That decision saved about $40,000-$50,000, producer Kath Shalper said when the film was released in 2009.
The troubled Australian-UK production Singularity, which remains unfinished and in limbo, was also made without a completion bond. However, a completion bond does not cover issues when the financing does not materialise, as appears to have been the case with the $28 million film.
Both of those films were made without a loan to cash flow the Producer Offset rebate – completion bonds are not a mandatory requirement for Producer Offset approval but a financier is unlikely to cashflow the tax rebate without one.
Screen NSW said completion bonds are a general requirement under its terms of trade although "depending on the experience and track record of the producer, as well as the size and complexity of the project, a completion guarantor may not be required for domestic documentary productions or low-budget (non-Offset) films".
Screen Australia occassionaly does not require a bond when it makes a post-production investment (because the riskiest parts of the production has been completed) or when an established investor (such as a major distributor, studio or free-to-air TV network) pledges to ensure the project is completed.