Production Budgeting & Delivery Models
This use case explains how to model production budgets and delivery models for media, agencies and creative studios in Model Reef.
You will:
Set up production budgets for projects, campaigns or shows.
Distinguish between fee, pass through and third party cost elements.
Represent different delivery models such as in house, outsourced or hybrid.
Connect production assumptions to P&L, Cashflow and client profitability.
Model Reef is not a shoot scheduling or production management tool. It provides a financial view of production budgets and delivery, not detailed call sheets or task plans.
When to use this pattern
Use this pattern when:
You produce TV, video, digital content or integrated campaigns.
Projects include large pass through and third party cost elements.
Margin depends on how you deliver and source production work.
You need to understand project and client level profitability.
It often sits alongside:
Retainer and Project Pipeline Forecast
Staffing and Creative Resource Planning
Multi Client Profitability
Architecture overview
Production budgeting and delivery modelling uses:
Structure
Branches for studios or production units.
Categories for fee revenue, production costs and pass through items.
Project and campaign budgets
Revenue budgets from retainers or project fees.
Production cost budgets per project or project type.
Delivery models
In house production with internal staff and facilities.
Outsourced production with third party vendors.
Hybrid models where parts are internal and parts external.
Financial outputs
Project and client gross margin.
Production cashflows and working capital needs.
Impact on studio level P&L.
Step 1: Define fee, production cost and pass through structures
In your categories and variables, distinguish between:
Fee Revenue (agency fee, creative fee or production fee).
Production Costs (internal studio time, internal facilities).
Pass Through Costs (third party production vendors, locations, talent and media bought on behalf of the client).
You can either:
Use separate revenue and cost variables per project or project type, or
Use aggregated variables per studio and client with project budgets feeding into them via drivers.
Ensure that pass through items are clearly identified so that gross income and gross margin can be calculated if required.
Step 2: Create production budget templates
In the Data Library, construct production budget templates for common project types, for example:
TV spot budgets with line items for director, crew, equipment, locations and post production.
Social or digital content bundles.
Integrated campaign packages.
Each template can contain drivers for:
Units (for example shoot days, edit days, deliverables).
Rates per unit for internal and external resources.
Standard mark ups on third party costs where applicable.
Use these templates to drive Revenue and Opex variables, either at individual project level for large jobs or aggregated for smaller jobs.
Step 3: Represent delivery models and sourcing mix
For each project type or studio, define drivers for sourcing mix, such as:
Percentage delivered in house.
Percentage outsourced to preferred vendors.
Percentage using freelance staff.
Adjust production cost formulas accordingly, for example:
Internal Production Cost = Internal Units × Internal Rate.
External Production Cost = External Units × External Vendor Rate.
Freelance Cost = Freelance Units × Freelance Rate.
Use scenarios to shift sourcing mix between internal, external and freelance to see the impact on margin and capacity.
Step 4: Link production budgets to project and client revenue
Connect production budgets to Revenue variables from the Retainer and Project Pipeline Forecast by:
Mapping project fees and pass through revenue to specific clients and studios.
Allocating production costs to the same branches and categories.
This enables you to compute:
Gross income (fee revenue plus mark up on third party costs where used).
Gross margin after internal and external production costs.
Overhead allocation and EBITDA per client and studio when combined with staffing and overhead models.
Step 5: Model timing and cashflow for production
Set timing and delay rules on production cost variables to reflect:
Deposit, progress and final payment schedules to vendors.
When you bill clients for pass through costs.
Payment terms on client invoices.
This will drive:
Short term cash requirements for production.
Working capital exposure on large projects.
The shape of Cashflow and Cash Waterfall across the portfolio.
You can then test scenarios where clients pay more slowly or where your vendor terms are less favourable.
Step 6: Use scenarios for pricing, scope and delivery strategy
Clone the base model into scenario models to explore:
Different pricing and mark up strategies.
Changes to in house capacity versus outsourcing.
Alternative scope levels for key clients.
Different levels of risk allowance and contingency in production budgets.
In each scenario, adjust:
Fee and mark up rates.
Sourcing mix drivers.
Production budget drivers per project type.
Timing and payment assumptions.
Compare scenarios using:
Project and client level margin.
Studio capacity and staff utilisation.
Cash exposure on production work in progress.
Valuation metrics where relevant.
Check your work
Production budgets reflect realistic costs and scope based on past jobs.
Fee and mark up structures match client contracts and commercial practices.
Timing assumptions align with how you bill and pay today.
Scenario outcomes support practical decisions about how to deliver work.
Troubleshooting
Related guides
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