TV producers haunted by rental costs

No one had thought of introducing pandemic as force majeure in contracts.

MUMBAI: The pandemic may have halted production activities, but the costs are mounting, especially the rent, according to ANM Global managing partner Nidhish Mehrotra.

He was speaking at a virtual round table conference organised by that included some of the television eminent producers who came together to discuss the challenges faced by TV producers during the Covid2019 pandemic.

"I possibly see that currently and post Covid2019, the major concern is of rentals. We are commissioned by the channel and then we produce the show and bring the artists and crew together. We have the privity of contract with broadcasters and artists and crew have the privity of contract with producers. Most of the producers hire studios on rental; very few producers own their intellectual properties (IPs). Rentals are expensive at Rs 15 to 25 lakh per month,” he said.

He added that nobody had thought of adding pandemic as force majeure clause in the contract globally. If your insurance talks about a pandemic in your contract then you're covered, but if it doesn't mention it, then you are not eligible for the same. And to include force majeure in your insurance cover, one needs to pay a premium price. 

He mentioned that a couple of lawyers have filed a petition in the supreme court saying that their earning has gone for a toss and that they are unable to pay rentals. But the apex court has denied any intervention in this matter. The supreme court in the hearing clarified that it cannot give any favours to the lawyers as every organisation would come to them. There are people in India whose livelihood is completely dependent on real estate and rentals. 

The order, passed on 30 April 2020, stated that it depends on the understanding between the licensor and the licensee.

Mehrotra suggested that if the licensee feels that the licensor can terminate the contract or may reduce the rental fee by 50 per cent, it is essential to immediately make the contract. 

“Producers are left with no option, either they can pay the rent or they cannot. You can suspend or waive off only when it is written in your contract otherwise you will have to pay the rent,” he concluded.

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