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Enthusiast
I believe this is called fraud…?
At a minimum, it’s a major auditing flag I wouldn’t want to be associated with at any point, freelance or not.
Icky!! I’m sorry you’re being put in this position.
Unless it’s a retainer relationship, agencies SHOULD make money from production because of the time spent overseeing the production team. The work doesn’t end when the concept is sold.
But that aspect of the budget needs to be agreed to by the client and clearly outlined in the SOW. So this one of two things:
- the client didn’t want to pay for the agency’s time (shame on them) and the agency is using dishonest practices to get what they feel they’re owed (also shame on them).
- the agency is already being paid and is looking to make more by marking it up (double shame)
Either way, you don’t have to be a part of it. Simply say you’re not comfortable with doing it that way.
Let me get this straight, the agency wants additional money from the client but they want that money hidden in the production company’s bill so the client won’t know? Wow.
That is correct!
Rising Star
I think I know this agency and if I’m right big lolz.
It sounds like regardless of how it’s handled from a line item standpoint, there is major risk that it will backfire later. A lot of these contracts get audited yearly so while you may get away with it at the moment, it could come back to burn you later.
Rising Star
Sketchy and unethical. Eep
I think that you’ve got to find a way to tell the agency no. Seems like a really shady thing to do.
There MUST be a “producer-y” way to frame telling this agency that it’s not worth risking their relationships with production vendors and worse putting the production partner in a legally risky position for a kickback.
Worst case, maybe you insist on treating production as a “pass-through” (which is typical) so client pays agency, and agency pays production. Then, if they choose to add a markup to the bid, it’s at least out of you and your production partners hands before it happens.
I would much prefer to keep any shady stuff off of the prod-cos invoice like you suggested. I am not a fan of having the prod-co bill the client directly. I just wanted to make sure this wasn’t the norm anywhere else so I was able to stand my ground on saying no!
And for added context (word count got me) we tried putting it in the production estimate is an “agency consultation fee” and they said to remove it and to just add a bit extra on each line so the client didn’t know the money was going to the agency.
Is it also weird to have your prod-co bill the client directly? Usually (from what I know) agency bills client, then agency pays all of the vendors.
Yeah so this isn’t bundling production management into production or marking up production this is straight up hiding a kickback. I would offer to put it in as a line item but get a bit more specific than consultation fee most procurement people are trained to look for generic vague items like that.
Enthusiast
It speaks to a huge lack of trust between client and agency first and foremost.
Second, tons of agencies feel differently about this, but it’s not typical practice to mark up hard-cost vendor line items - like a prod co or audio house. This is typically due to large clients having addendums in agency-client SOWs that let them audit as they want.
I’d honestly break out the money and add it to the agency hours portion like the producer hours - esp if it’s like less than 10-30K.
Enthusiast
Ya that’s very weird? Is there anyway to get them to change their mind? If you need to - try asking the prod co to provide one invoice for all hard costs and another for all hours/services - then break out each on your client estimate? That way you might (maybe) be able to mark up some services.