DirectorsUKandUKbroadcastersandproducersagreeanewUKTVRightsdeal

Directors UK has agreed the terms of a new 3-year UK TV Rights deal with the group of UK broadcasters and producers comprising BBC, ITV, Channel 4, Channel 5, BSkyB, S4C, Pact and TAC.

The previous deal was extended beyond its original expiry date of 30 June 2014 while protracted negotiations continued. The fee to be paid to Directors UK for the new deal and the dates of distribution to members will be as follows:

 

 

The fee paid to Directors UK for the previous deal was £20.5m. The new 3-year deal represents a 60% increase over the total paid to us under the previous 3-year agreement.

Directors UK will also be paid an additional £250,000 in respect of 2014/15 to add to the £7m already paid. This will be distributed to members in December this year with a supplementary distribution in Summer 2017.

“I’m delighted with this deal. It came about through the persistence of Andrew and the negotiating team. It will result in a significant increase in our payments, representing a 60% rise over the next three years”

Beryl Richards, Directors UK Chair

What is the Directors Rights Agreement?

Andrew Chowns explains the background to the new deal:

What is the Directors Rights Agreement?

The Directors UK TV Rights Agreement provides us with the bulk of the royalties that Directors UK distributes to you each year. The agreement is with the main UK broadcasters – BBC, ITV, BSkyB, Channel 4, Channel 5 and S4C – and the independent producers, represented by Pact and TAC. Under this agreement, the broadcasters and the producers agree to pay Directors UK an annual fee. In return, individual directors agree to assign the copyright in their television works to their producer in their employment contracts. This assignment allows producers to make any use they wish of the programme without any need for any further clearance.

The fee paid to Directors UK is distributed by us to directors according to our Distribution Rules. These Rules govern how we calculate a value to be applied to each use of a programme, based upon the uses that are reported to us and that we monitor ourselves. Once all the values are computed, we can work out the share of the fee to be paid to each director in our regular distributions. The Distribution Rules are reviewed regularly by our Distribution Committee, chaired by Delyth Thomas.

History of the Agreement

The first agreement was signed in 2001. It had a 5-year term with a total fee of £6m.

The agreement was renewed in 2006 for a further 5-year term with fees increased to £13m.

This was followed by a third agreement in 2011 with a 3-year term  The shorter term was proposed by us as we were concerned that the industry was changing so rapidly that we needed to be able to revisit our agreement more frequently to ensure it stayed fit for purpose. Total fees for the 3 years were £20.5m.

Negotiating the new Agreement

As can be seen from the above figures, we have come a long way since this agreement was first established in 2001. However, even though we made a significant leap forward in the last negotiation, our view has always been that the fee still did not represent a fair value for the rights we are granting to producers and broadcasters.

Our negotiating team of Board members - Charles Sturridge, Beryl Richards, Tom Roberts, Delyth Thomas and Steve Smith – set out to achieve a valuation that could be regarded as correct and fair using economic and legal evidence, and which could then provide a solid basis for future deals.

We devoted a great deal of time and money to build up this evidence base. As well as mining the valuable data we hold in our own database, we commissioned research on the extent of uses of our works, the ability of the broadcasters to pay, revenues they derive from using our works and new developments in the industry. We also commissioned an independent valuation of our rights from a leading consultant.

In contrast, the broadcasters and producers took the view that any new fee must be firmly based on the previously negotiated figure and they were unable or unwilling to acknowledge the argument that there could or should be an underlying logical basis for arriving at the right level of fee. This fundamental philosophical difference between us - a difference that remains to this day - was the main reason why it has taken so long to reach the new deal, and why talks went on right up to the final deadline.

Even though we have not yet persuaded the broadcasters and producers to accept the principle of an objective valuation of directors’ rights, we have achieved a substantial rise in the level of royalties paid to you. Your Board agreed unanimously that this deal should be accepted and that we should prepare ourselves for another attempt to achieve the right valuation in the next negotiations.