<P> Generally, a producer will have a bank / lender lend against the value of the negative pickup contract as a way to shore up their financing package of the film . This is commonly referred to as "factoring paper". Most major North American studio and network contracts (incl . basic cable) are collateralized / factored by the bank at 100% of the contract value, and the lender just takes a basic origination / setup fee . </P> <P> Splitting the roles of studios and networks necessitated a means for financing television series appropriate to the varied risks and rewards inherent in the separation . A practice known as "deficit financing" consequently developed--an arrangement in which the network pays the studio that make a show a license fee in exchange for the right to air the show, but the studio retains ownership . The license fee does not fully cover the costs of production--hence the "deficit" of deficit financing . </P> <P> Deficit financing developed after the varied risks and rewards were determined and carried out through film financing . Deficit financing occurs when the license fee for a show doesn't fully cover production fees . A studio has ownership of the production, but as license fees are handed out in exchange to air a show, the phrase deficit financing comes into play as costs were not being met and paid . </P> <P> From the late 1960s through the mid-1990s special regulations from financial regulation's and syndication's rules created relations between television networks and independent production companies . These rules stated that ownership of the rights to the programs reverted to the producer / production company after a specified number of network runs (syndication). Profits from any other sales, including syndication, generally benefited the production community . Because of this, production companies produced original shows at a loss, hoping that they would eventually be run by syndication and make their money back . </P>

Who pays for a movie to be made