Just as you are trying to keep all the balls in the air, a theatre has shown interest in displaying your show. What’s the next step? Now you will need to determine how to estimate the cost of your show while negotiating with the theatre venue company. In France, this sale is specifically known as “le prix de cession” and this article is based on french rules and regulations. This price you are calculating is translated as the “transfer price”, the sum that the theatre will pay the company to put on your show.
Starting things off, it is important to understand that a universal transfer price does not exist and that each calculation method is perfectly valid. Here, we are proposing just one of the many possible methods capable of determining these costs. So keep in mind that there are many, many ways to go about this task and one single, absolute formula does not exist. Once you have picked your route, stick to it! There are going to be a lot of factors and variables, so be consistent.
To calculate your show’s transfer price, we will begin with your operating cost. Hang on, what’s an operating cost again? It consists of the compensation costs for the whole ensemble on the day of the show: dancers, technicians, stage director, etc. Here’s a helpful formula: Operating Cost = Gross Salary + Taxes that the company must pay as an employer for the show to happen.
Essentially, all of these (above) costs get added to the additional costs necessary to put on your show. Make sure to note these important points :
- Envelope budgeting regarding intellectual property: for example, author’s rights in relation to the “Société des Auteurs et Compositeurs Dramatiques” (SACD) or the right to use certain music given by the “Société des Auteurs, Compositeurs et Éditeurs de Musique” (SACEM). (Interestingly, this is a different process than copyright laws in the United States.) To note, most of the time these two costs are often covered by the theatre which would be stated in the transfer contract, however this may not be the case in a cooperation contract. So, you should verify with your contractor whether this cost is included or not. Our advice: try and get control of their payment declarations even if you have to backtrack and pay your dues. This will alleviate any confusion on the subject via administrative management from within your company.
- Communication Expenses regarding advertising: flyers, social network publicity, newsletter entries, etc.
Finally, it is time to pad your budget by placing a margin. This margin is generally understood to be between 15 and 30 percent. This margin provides extra cushioning to your company’s costs that might have added up during the creative process: choreography work, administrative work, publications, etc.
As you are almost done figuring out the cost for your show, it is quite possible that you will need to think about other elements that are just as important to communicate with the theatre venue. Take our suggestion and present them with a package of the actual price of bringing your show to the venue separate from the transfer price with as much of the details as possible so that you leave no room for misunderstanding and that everything is transparent and explicit. Here are two examples:
- The touring costs: As an employer, you are responsible for taking care of meals, transportation, and housing for your whole artistic and technical team as soon as everyone moves outside of their regular workplace or studio. This is called a tour. For the calculation, you can refer to the minimum charges mentioned in the collective agreement that your company runs on.
- The expenses for workshops and mediation activities that the company would organize if necessary in the case of the theatre contract. For example this includes the gross salary and the expenses of the people engaged in these activities.