Rough or Smooth Trade Press Release

08 December 2011 for Immediate Release

 When cross media producer, documentary filmmaker and respected industry consultant Marc Schwinges, teamed up with friends and well known and loved soap and theatre actors: Terence Bridgett and Paul du Toit (who had just started their own production entity Fanagalo Films) to produce a travel documentary series with a difference, things were bound to start off differently from the get-go.

Schwinges has volunteered for and been elected to various positions in organized industry, pretty much since he founded his company Underdog Productions in 1993. It was via this work that he not only realised that the current model of broadcasters doing a 100% commission, and owning all rights on a property for life was not only old-fashioned, and increasingly hard to sustain, but also deprived the creators and producers of a project of any possible revenue in years to come. International sales of South African television programming is rare and usually managed by the broadcaster, who also beneficiates from any such sales. Essentially the producer typically is in reality no more than a “producer for hire” who takes unusual levels of risk, and shares very little if at all in any further sales of a property.

The Department of Trade and Industry of South Africa (DTI) has a special “South African Film and Television Production and Co-Production Incentive” designed to offer a “rebate” of up to 35% of “qualifying spend” you spent in South Africa on one of a defined list of “qualifying productions”. The rebate has often been used on South African or formal co-production feature films, and a variant on this rebate is frequently used for foreign films facilitated in South Africa. However Schwinges realise that very few, if any, TV series projects had qualified to date, and certainly none, which were financed almost exclusively with South African money. A Documentary TV Series of up to 13 parts would qualify, if the total production budget were over R2.5 million and most importantly if a South African Broadcaster does NOT own it. The idea is to promote producers ownership and resultant industry growth and not for it to be used to supplement broadcasters commissioning budgets.

As a predominantly TV producer, Schwinges had never used the DTI rebate before, and so had to first acquaint himself with its complexities and challenges, and there are many.  Also not every qualifying project will lend itself to even using the rebate, since there has to be some chance of doing something with the equity you earn in this way as producer, or why go to all the trouble. It is public knowledge that the SABC has been in a bit of a tough period over the last few years and Schwinges was well aware of the increasing difficulties for the public broadcasters SABC 1&2 in meeting their local content mandates with this reality.

It was with this in his head that when Bridgett and du Toit first met Schwinges with the unique idea that was to become “Rof of Spog” way back in September 2009 he proposed a unique model of finance for the project that would allow the team to own rights in the project. The three did not want to give away all rights as is usual in a commission, and believed in the potential of some foreign sales.  A year later the project was developed to a point where it was ready to present, and initial budgets had been done. The critical thing was to get a large portion of the money on board from a local broadcaster, by way of a license deal, as this would then provide sufficient finance and the “distribution” requirement the DTI needs to offer a “provisional approval” to the project.

Schwinges submitted the project as unsolicited to the SABC, and also contacted the Acting Program Manager of SABC 2, Ziaynda Ngcaba about the project. He proposed both a solution to their lack of documentary, but with a high audience retention value, highly recognized stars attached, and a finance model that would allow the broadcaster to save at least 50% of their costs as apposed to a commission, while still maintaining the exposure required in South Africa, and using the DTI rebate.

Ngcaba however, knowing that Bridgett (who had spent most of his career on SABC 2) and du Toit both had extensive experience in Afrikaans drama, asked if perhaps the show could also be done in Afrikaans, as their channel had language requirements to meet.

It was thus that “Rough or Smooth” also became “Rof of Spog”. The English version was naturally still required if the show was to be fully financed, and have any opportunity for foreign sales. After all Schwinges says “There is no sense in owning equity of something that can’t be sold on anywhere”. Bridgett and Du Toit thus had to agree to do everything on set in two languages, every link, every spontaneous outburst, every interview, they all had to be done in both languages. The voice over also had to be scripted and recorded in two languages, two different edits, two final mixes, an additional set of sub-titles, two different sets of deliverables, and probably more to allow for foreign language dubbing requirements.

“So a lot more work, at least double the deliverables, for the same total budget, and even with SABC’s license deal (assuming it was agreed to), and the DTI rebate, we were still short around 25%”, says Schwinges.  “At this stage we urgently first however needed to sign with SABC, and so a ‘killer’ pitch was required. We managed to get a pitch meeting in late 2010, and threw in all the stops, resulting in a full approval from the large review team SABC had assembled (to ensure transparency). A few complex and confusing business meetings, and several budget versions later, and we had a deal in principle. However still no signed agreement!”

In February 2011, the team had to start shooting, since the Dusi Canoe marathon was about to take place, and it was an essential episode. With no assurance of future funding, the team decided to do it themselves and persuaded highly respected DOP Riaan Laubscher (Fear Factor, Survivor) to do this shoot on risk, with only Schwinges doing sound, producing and a bit of directing. The two raced to follow Du Toit at all the meeting points along the river, till Bridgett was able to join the team for the second half of the four-day shoot. This shoot helped form the template for how the rest of the show was to be shot, and with some pick up’s shot later this shoot became one of the episodes in the series itself!

Schwinges then managed to get another 3.9% from a private equity investor, but still needed more. In order to get the DTI Rebate money, he also needed to set up a SPCV. This meant a separate company, with its own tax setup, own bank account etc. In the interim, the shooting schedule had very specific gaps to allow for time where Bridgett and Du Toit were both available between Soap, Theatre and other theatrical commitments, and the first shoot gap was already mid May 2011. “In the nick of time for that shoot SABC signed their license deal, and so the shoot could go ahead using the money we got from the private equity funder”, says Schwinges.

“However we were still short, and so were not able to access the completion bond required to access the DTI rebate money.  We needed to license the English version of the show somewhere, and do it fast. The IDC were happy to finance, but only if we had another license on the English version anyway, and since the shortfall was so small, it hardly made sense looking at their offer. Both M-Net’s Mzansi Magic and Top TV’s Fox Network, seemed the fastest offer as foreign buyers were not biting without final episodes being complete”, says Schwinges. However how to get a Pay TV Operator to at least agree to a short delay on a show which had already been seen on SABC2, despite it being in another language. Schwinges explained that both shows represented original first run local content, and managed to excite Mzansi Magic’s Lebone Maema both on the creative, and the unprecedented nature of this finance model.

However this new deal also took the requisite few months of negotiation and re-negotiation, all the while shooting on some of SABC’s money and any other money that could be scrounged up short term.

In October of this year, despite some incredible obstacles and very unusual circumstances, the deal was finally in place to finance the full budget, and there was certainty on the contractual deliveries required by the previously signed agreements. “No time to pop the Champaign yet however as now the rush was on to deliver, and we had an understandably upset SABC who wanted the project exclusively in Africa. Our deal did allow us to license the English version into Africa, and the reality is the deal would not have been possible at all if we had not got M-Net in. It’s surely better to deliver as promised than nothing at all and be legally on the line to repay SABC for what had already been shot on risk”, justifies Schwinges.

And so it is that the first of its kind projects was to be born. A project where for the first time in South Africa, a documentary series was produced, created mainly for the South African market, with an on-set Afrikaans shot version, an English global release version, export potential, DTI rebate money, and the major Pay TV and Public Broadcaster both licensing versions of the show, while the majority of rights and potential revenue goes back to the shows creators and producers.

Schwinges concludes, “I hope this case history will be the first of many such dynamic and new approaches to TV financing. I am optimistic broadcasters realise that for less than 50% of their commissioning budgets, they can produce a much higher quality show this way. A show, which while they don’t own it, will fulfill their local content quotas, and give the potential for real and meaningful industry growth as a result of the rights ownership creators of the show will now enjoy. It also adds to the highly visible export pool of South African content, further exposing our wonderful country to the world. Why should be only be exposed to US and UK content. It’s time we had quality content to expose to them made in South Africa, and this is certainly one way to make that a reality. I hope other produces will soon follow suit, and that this will be a proven and popular method to produce South African TV Content.” Schwinges adds however that not all projects will work in this way, since certain programming will simply be designed uniquely to only work with a local market. Such content should continue to be commissioned.

The show first airs on SABC 2 in Afrikaans as “Rof of Spog” on Friday the 9th of December 2011 at 18h00, and for 13 weeks from then, and is sure to have a massive following.

“I just hope it will be easier to do the next time around!” are Schwinges final and somewhat exhausted words; a sentiment shared by his Associate producers Terence Bridgett and Paul Du Toit.

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For More information contact:

Marc Schwinges

011-483-8800