AICP has received many calls and notes from
members regarding an email sent by Anthony Vozza, Head of Chrysler Broadcast TV
Productions/Procurement, which states that Chrysler has implemented a set of
"pre-negotiated" guidelines for production companies to follow in
order to work with Chrysler on broadcast TV productions. Furthermore, it states
that Chrysler will not accept bids from companies that have not agreed to these
terms, thus creating their "roster". Mr. Vozza also states that these
guidelines are non-negotiable and will go into effect October 1, 2013.
We have seen other marketers attempt to
create "preferred vendors" lists in the past; however this is the
first time that a marketer has expressly stated that by joining this roster, it
will not be
obligated to treat any production company’s response as confidential, thus
allowing their agencies and consultants to identify which companies will offer
their services for these terms.
While the cover letter to the invitation to
join this roster states that all of these terms reflect terms "commonly
applied to Chrysler’s and many other large advertisers’ projects in the U.S.
market", we believe this to be a gross overstatement and in fact, counter
to how most productions operate. Some of these terms are:
- Limitation on mark-up (25%) for all jobs with mark-up dropping to 23% for
longer jobs (4 days or greater).
Limitation on mark-up inclusive of service-company fees for non-U.S.
Crew fringes to be handled cost-plus with a 15% handling fee.
Travel below the line with a 15% handling fee.
- Mandatory use of Chrysler/APR vendor for transcoding footage.
Chrysler may designate any line cost-plus at any time.
All cost plus items are “cost-plus not to exceed”.
See full set of terms here.
Furthermore, Chrysler states:
- There is
no guarantee of work by joining the roster;
The roster is not exclusive; any production company can be added to the
roster by accepting the guidelines; and
Chrysler may amend the guidelines at any time.
Over the years AICP has sent members
numerous bulletins regarding the precedent setting dangers of individual
issues, such as, putting items below the line, and "cost-plus not to
exceed". These bulletins can be found here:
Below the Line Overview
The Line Arguments
Plus Not to Exceed
We have seen many "programs" in
the past, but make no mistake: this is a very public and aggressive attempt by
Chrysler to establish a package of the lowest levels of production terms in a
"non-negotiable" format, and its cost consultant, APR, to memorialize
items that they have attempted to put into many of their client's guidelines
and thus change the way the industry operates.
If you are asked to adhere to
guidelines and participate in this or any roster program that will adversely
affect your business, you should scrutinize this request closely as an
important precedent-setting business decision for you, and a seminal moment for
the business. As a reminder, this is an invitation for you to join this roster
and thus accept this form of doing business. The decision to do so is yours.
An owner's summit to discuss this issue has been scheduled for September 19th. This meeting is for
owners and senior management of AICP General Member Companies only. Attendees
at this meeting should have decision-making powers within their company. For more information, please email email@example.com.