MONOLITH PRODUCTIONS

The traffic flowing into downtown Burbank on Monday, August 20, was even worse than usual. The summit
meeting at Monolith Productions started promptly at 10:45AM. The president of the company, Hugo Monolith
III, called the meeting of his vice presidents to order.

“Ladies and gentlemen, thank you for meeting here on such a short notice. A most important contract has been
won by our company. As you may know, George Walters, our vice president of project development, has been
negotiating with the Broadcasting Association of America. (BAA). The fruit of that work has been the signing
of Monolith to produce a new made-for-TV version of Charles Dickens’s A Christmas Carol. The movie will
be broadcast during prime time on the nationwide BAA Network.

Monolith’s announcement was met by enthusiastic applause. He then continued.

“Details of the agreement are not of immediate importance. Suffice it to say that BAA has agreed to pay us
USD1.25 million for the completed 90-minute movie. The first installment of USD250,000 will be received
when the project starts. An additional USD350,000 will be received on November1, and the balance will be
received the day the film is to air.

“We are in complete control of the project. We will write a screenplay version of the story (with the BAA
having final approval), produce the film, and support BAA’s promotion of the film. We also have the rights to
release a picture book based upon the film. We are here today to begin development of the project’s production
budget. The project will be coordinated by John Quinn. I’ve asked John to give a brief presentation
summarizing the project. John?”

“Thank you, Mr. Monolith,” stated Mr. Quinn. “I would like to give everyone an overview of the ‘Christmas
Carol.’ The production of the film will be the responsibility of the director. We have been fortunate enough to
recruit Steven Playhill for that task. Steven will present his ideas later. I will personally handle the promotion,
and will follow Steven’s discussion. We will then hear from Madeline Crawford, who will be in charge of the
production and release of the picture book. Please feel free to ask questions at any given time during the
presentation. It is now my privilege to introduce one of the most popular film directors of our time, Steven
Playhill. Steven?”

The introduction of Playhill brought further applause. It was acknowledge by a slight bearded man in rumpled
casual clothing who walked to the front of the conference room and started to speak.

“Thank you. As Mr. Monolith said, we are here today to develop a budget for this made-for-TV film. I would
like to detail the production process which must be accomplished. We are targeting the completion of the film
for December 17. The film is to be shown on the evening of December 24, but BAA wants one week in case
last minute rescheduling during Christmas week is necessary. At this time we are at the very beginning of the
project; we have yet to start anything.”

Well, we have Mr. Dickens’s original book,” chucked Mr. Monolith. “I signed USD25,000 check just this
morning for the rights. The check went to the Dickens Foundation, 221C Baker Street, London.”

“Yes, but you can’t have the people stand and read the book verbatim over the air,” Playhill replied. “:the first
task is to have a screenplay written. I have chosen a couple of writers who worked on my last feature film,
‘Paws.’ The screenplay, with revisions, should take three weeks to complete.”

“Excuse me.” Interrupted Felix Birchfeld, vice president of accounting, “But how much will these undoubtedly
fine writers cost us?”

“The writing team usually receives USD20,000 for a feature-length screenplay. This is a little more than the
going rate, but the quality of their work allows me to forego an additional week of review and rewrite.”

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“And what is that going rate?” asked Felix.

“About USD10,000. Are there additional questions about the screenplay? Very well. The next step is to cast
the leading roles according to the screenplay. Casting for this project will proceed in two stages because filming
will take place in two stages. Interior scenes requiring only the primary characters can be shot at a studio using
soundstages. Exterior shots, depicting the streets of 19 th century London, will be filmed on location.”

“Wait a minute,” said Charles Hume, vice president of data processing. “Aren’t there outdoor soundstages
available for the exterior work? Location shooting in London sounds quite expensive.”

“Actually, shooting the exterior scenes at a studio would be more expensive. A London set is not available at
any studio, so we’d have to build one. Construction would be more expensive than location work because a
bank loan from Burbank National Bank at 15% would be required to finance it. Also, what would we do with
the set after shooting? None of the studios may want to buy it.”

“But, to fly everyone to London…”

“Unnecessary. There are areas ion Boston that can be used for the filming. The architecture in Beacon Hill and
Cambridge areas are well suited for this film. The traveling expenses would be lower…”

“Speaking of expenses...”

“Yes, Mr. Birschfeld. Soundstages rentals average about USD30,000 per week. I expect we can comfortably
complete the interior scenes in about four weeks.”

“Thirty thousand dollars! Steven, how long would it take to complete the interiors, say, working longer days, or
on weekends?” Birschfeld asked.

“Well, the four weeks is a very rough estimate. After reading the story over, I can see us using six interior
scenes.”

Playhill went to the blackboard and drew the following table:

Scene Days Needed Characters

Cratchet Home 1 2-3 Whole Cratchet Family
Scrooge Office 1 2-3 Scrooge, BobCratchet
Cratchet Home 2 2-3 Mrs. Cratchet, Children
Scrooge Office 2 2-3 Scrooge
Scrooge Bedroom 1 4-5 Scrooge, Ghosts
Cratchet Home 3 6-8 Cratchet Family, Scrooge

“As you can see, this schedule can take anywhere from four to five weeks,” Playhill continued. Union rules say
any work on Saturday of Sunday means a 50% bonus for all off-stage labor involved. So, if we shoot one
Saturday, everybody gets 150% of their daily pay for that Saturday.

“The shooting in Boston will probably take about three weeks. However, we want good amounts of fog and
some snow available, so we cannot begin Boston shooting before November. Rental of locations, including
traffic and crowd control, is about USD45,000 per week. We cannot shorten the time the location shooting will
require.”

Talk of expenses had subdued the audience’s enthusiasm. Mr. Monolith cleared his throat and asked, “Are there
any other non-personnel expenses which are needed for shooting?”

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“Let’s see…well, some props would have to be constructed. I’d say that should take a week but could be done
prior to renting shooting sites. The cost would be about USD10,000. Costume rental and fitting will cost about
USD20,000. Lighting, filming, and sound equipment can be rented for about USD7,000 per week for sound
stage and USD10,000 per week for location work.”

Jill Habaersham, vice president of marketing, made a comment. “Steve, you mentioned that casting would be
handled around the shooting schedule.”

“Yes, thank you for reminding me. Casting of the primary roles, such as Scrooge, will be for both the interior
and exterior shooting. The payroll for Scrooge and the Cratchet Family should run about USD15,000 per week.
Secondary roles and extras are another matter. The interior scenes will require minimal use of extras. In Boston
many local people should be hired as extras to provide background crowds. Most of these people could
probably be paid a total of from USD2,000 to USD3,000 per week. They can be hired just for the Boston work,
so auditions can be held anytime before that. However, the casting director should probably do this work
immediately prior to the Boston shooting. This would insure that the extras will be available and ready when
shooting begins. Casting should take about one week at each stage.

“The other people are the technical, backstage staff. We formed a company of the people who normally work in
my crew. They know my directing style and we’ve worked well together in the past. The fee is USD300,000
including my USD60,000, for the film.”

“Are there any other processes during this project which will require time to complete the film?”

“Yes, Mr. Hume. After each stage of filming is completed, we will need at least one week to edit the film which
was shot. We’ll need an additional week at each stage for shooting any retakes. Has anyone requested a
preview?”

Mr. Monolith spoke up. “BAA always requires their films to be previewed. Why?”

“Because we should allow another week for staging the preview here in Burbank and processing any re-edits
they request. That should produce us a made-for-TV film. Any questions? Thank you.”

Playhill took his seat and Quinn began to discuss the promotion of the film.

“BAA has requested two forms of promotion. They would like us to produce a 60-second and a 30-second
commercial including actual film footage. The 60-second spot must include scenes from both interior and
location shooting. The 30-second spot should contain only close-ups of the primary characters. They want to
run these commercials from December 3 through December 24. The cost of the commercials will be around
USD20,000, and I have set aside a week to complete this task. The commercials could be competed in as little
as three days. But the production staff size would have to expand, probably increasing the commercial cost to
around USD37,000.”

“John, does that mean the film must be completed by December 3?”

“No, it means we’ll take some action shots during the editing stage, produce copies, and expect those shots to
appear in the film,” Quinn replied.

“The second phase of promotion also kicks off on December 3, BAA airs several talk shows, including Donny
Parson and David Postman. They would like two or three of the stars of the movie to make the rounds of these
shows after shooting is completed. They will appear, discuss the film, and introduce a film clip. The film clip
accompanying a star has to spotlight that star. Because filming of such shows is done two weeks in advance, all
these spots must be completed by December 10.

“That does it for the promotion. Now Madeline Crawford from our Phantom Books Publishing wing will
discuss the picture book.

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Thank you, John. Ladies and gentlemen, this portion of the project is not exactly a ‘picture book.’ What we
plan to do is develop a novella from the film screenplay. Basically, we’re editing Dickens into an action novel.
Then we will combine this prose with color photos taken from the film. Similar products have been quite
successful. Since we have total control over this part of the project, we are its sole benefactor and collect all
revenues. We anticipate sales of about 150,000 to 250,000 copies priced at USD1.80 per copy. The book
should be finished and shipped to outlets by the beginning of the last week of November to reap maximum
sales. A delay of one week would cost us about 100,000 copies.”

“Madeline, are you saying now that the film has to be done by the third week of November?”

“No, all that must be completed is the filming. Like the commercials, we can take stills from the footage. Once
we have the photos, it will take one week to put the photos in the book and print copies.”

“Excuse me, but about the cost of printing….?

“Yes, Mr. Birschfeld. Printing a book like this requires an initial outlay of USD100,000 for the first 10,000
copies. Then, every 100,000 copies printed costs an additional USD80,000.00”

“What about the prose portion of the book, Madeline?”

“The book has to be written from the original screenplay. Although some changes may occur during shooting,
such changes should not affect the book significantly. The ‘prose-ifying’ of the screenplay should take about
two weeks. We need another three weeks to choose an appropriate layout and composition for the book. Then
it’s all done except photos and printing. Are there any questions?”

Mr. Monolith rose to wrap up the meeting. “Ladies and gentlemen, we have one week to schedule and budget
this project. We plan to let the people who made presentations here begin their work one week from today.

“We will meet again Thursday. Between now and Thursday, my assistant, Jennifer Wilson, will put together a
preliminary plan. The report will include a schedule, budget, and cash flow. We will discuss, revise if
necessary, and approve a plan. And now, it’s almost noon, so let’s adjourn to the executive dining room for
luncheon and informal discussions.”

The vice presidents and other executives filed our of the room, leaving a rather nervous Jennifer Wilson bending
a paper clip and wondering what to do next. Jennifer had recently graduated from her MBA and wanted to do
well on her job at Monolith Productions. She knows that working with the executive group of the firm was a
tremendous opportunity to learn the industry and demonstrate her capabilities.

Questions:

1. What analytical tools can Jennifer Wilson use to schedule the project? Is any tool more advantageous
than others?
2. Are there ways of shortening the time it will take to complete the project? Is it more profitable to
shorten the project time?
3. Can the project support its own weekly cash needs?