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Need some help negotiating

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Joel MaysonetNeed some help negotiating
by on Sep 17, 2008 at 3:38:33 am

Hi everybody,

First post ever on this forum. My respects and appreciation for everyone here who takes the time to maintain these forums alive with useful information.

I'm in the middle of negotiating a work opportunity with a production company. I'm a motion graphics artist and editor with a full time position on a local TV station in Texas, but want to venture into production houses. I'm in the middle of negotiating a work opportunity with a production company that says cannot offer me a full time position (it's a young company) but are willing to work out a business plan with me. They mentioned two things that are a bit confusing to me (since I don't know the freelancing world too much). 1) They said they want to represent me. How does representation works in the post industry? Do production companies usually do the "representing" or are there agencies who usually do that? I undestand the basics of representation (they get 'x' amount of the money I make) but that's pretty much it. What should I be aware of? Can someone guide me in the right direction?

2) Since I told them I that in order to leave my current job I need some economical security, they suggested a to offer a monthly retainment fee plus the money from incoming work they get. Apparently they do that with other members of their staff. This is where it gets even trickier for me since I don't know how this works, what a retainment fee should be like, or how those contracts are set up.

Are there any freelancers or contractors who can share some info on how to handle this or how it's usually handled? I know how much I want to be making a year, but have no idea how to break it down with those types of agreements. Any help will be highly appreciated.


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Emre Tufekci S.O.A.Re: Need some help negotiating
by on Sep 17, 2008 at 11:27:47 am

I can answer the part about retainers:

I was on retainer with ABCNEWS for 8 years when I lived overseas (As a cameraman). It was a good deal where they guaranteed me 10 days of work a month and I was paid that like a salary every month. If they could not generate enough work for me I would still get paid my rate.

What you have to take into consideration is the retainer they will provide you has to cover you basic needs as you have to rely on yourself to freelance to make up the difference incase you don’t get more work from them.

I had a few advantages like I was working exclusively with Ted Koppel and Peter Jennings so I was high on demand and worked well over my retainer. I also had camera gear I was renting them so there was a second income from the retainer.

But I had to get my own health insurance and retirement as I was officially still a freelancer. If you are getting a retainer from a small company I would recommend for you to not get attached too much and in a year seek a staff position elsewhere if they do not make you a permanent employee.

I hope this helps a little.

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Mark SuszkoRe: Need some help negotiating
by on Sep 17, 2008 at 2:51:05 pm

When they "rep" for you they are acting as an agent for you, drumming up business. Typically, a rep takes a percentage of said business they helped you get. Somewhere between ten and twenty percent, I think, but don't quote me on that. This could be good or bad. Depends on how much of what kind of work they throw your way, what they are charging and what amount they give you after they take their cut. Also it means that all your time is spent actually working creatively and not out beating the pavement looking for assignments, and it is only fair that someone else taking that burden on for you should get a "taste" of the profits for their effort.

Some of these arrangements are very lucrative for all parties, others are more like sharecropping and shopping the company store. Certainly the agent company is alwyas going to consider you both an asset and potential rival. From the other side of the desk, they have to worry that you might want to eliminate the middle man (them) and pocket the agent's percentage by trying to steal away all the hard-earned clients.

They are first of all looking to save money over the costs of hiring a full time employee with benefits and all the other government-ordered paperwork and costs, by using you as a freelancer on retainer, where you as a contractor have to handle all that stuff for yourself. When there is no work, they don't pay any contractors. Well, except if they have a retainer fee. That fee is highly negotiable and could be reasonable or paltry, depends on the bargaining situation.

This is why contractors have to charge more than salaried staff for the same job. Not necessarily because they are more expert, but that they have to cover all these other expenses that a salaried person never sees, whether there is work or NOT. The question is then, how much more one can charge as a contractor, before the contractual status is really no cheaper or more convenient to the companay than a full-time staffer. Contractors can always say no, especially if NOT on retainer, when they have a schedule conflict or just don't want to do a particular gig. Salaried people usually have to bend to the boss' whims whenever.

Before you go back to negotiations, inform yourself. Do a detailed analysis of ALL your costs versus the days in the year you want to work, and figure out from that your true minimum hourly and day rates. You can't afford to take the job for less than that figure. Then compare the numbers they are offering, based on aconservative estimate of how many gigs a year you'll do. Be brutally conservative at this stage, assume a bare minimum of work. It may work out that after they take a percentage off for their efforts, they can't pay you as much as you can pay yourself working sans retainer but as a fully fledged independent.

I can't tell you which way to jump, I don't know your specific numbers situation. But if you check the achived COW threads on salaries and rates, you'll dig up a huge amount of added info to help your decision process.

Good luck, remember, first man to say a number loses.

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Joel MaysonetRe: Need some help negotiating
by on Sep 18, 2008 at 2:36:20 am

Thank you very much for taking the time to respond. Things are getting clearer.

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Chris BlairRe: Need some help negotiating
by on Sep 18, 2008 at 3:32:09 am

As a facility owner and 25 year veteran of production, their offer sounds a little suspect to me, especially if they're a "young company" as you mention.

We use freelancers and contract folks extensively, with a couple working for us probably on average about 20 hours per week. We just pay them their freelance rates, which if you break them down hourly or daily seem high...but when you figure in the cost of hiring a full-time employee and all the related tax costs, it's WAY cheaper for us to use the freelancers on an as needed basis.

However, if you're thinking of leaving your full-time job, I'd recommend you have several other solid prospects for freelancing. If you took this gig, and 6 months down the road, this "young company" imploded. You'd be screwed.

On the other hand, if they're a solid company and their "retainer" offer is decent, it might be a "jumping" off point into freelancing so to speak. As Emre pointed out, his deal was excellent. But then again, he was working at the top of the business. So I'd proceed with caution and as others have noted, make sure their offer will cover your basic costs and provide at least enough income to survive. I'd also look hard at the company itself. Ask around town about them. Find out what kind of people they are. Ask if they pay on time (very important). Make sure you go into the position well-informed.

Chris Blair
Magnetic Image, Inc.
Evansville, IN

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