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2016 BROADCAST REPORT & COST INDEX


The Changing Content Production Landscape in 2015 was another big year for the content production industry. The industry has adjusted its practices, responding to the realities of a changing media consumption marketplace. Traditional media, both content production and broadcast, still leads in supporting the needs of advertisers. However, the significant expansion of media options that are available to advertisers has put tremendous pressure on the industry. In general, traditional broadcasters have embraced new media. They have done this with methods as varied as viewer participation in news gathering operations to advances in the delivery of video on websites. Although cable networks often resist an ala carte approach, a number of traditional content producers have embraced OTT, or over-the-top content. Similarly, aggregators have created new opportunities for viewing media as the number of possible linkages continues to increase. It’s also worth noting that the growth of media consumption on mobile devices has climbed even faster than the most optimistic (or pessimistic, depending on your perspective) projections. The expansion of new media technical infrastructure has made all of the above possible. Some content producers have embraced the new delivery systems, because these systems can meet the needs of advertisers and viewers, as well as increase audience share. Others are not sure how to proceed. The conversion to digital production is done; the new normal is the HD broadcast. This new norm is now being pushed by 4K and sometimes 6K production and transmission technologies. 4K has been broadcast on a limited basis, but the extent of the large-scale adoption of the format remains unclear. The reallocation of the wireless spectrum is not yet finalized, and the broadcast industry remains active in its defense of its needs, voicing its concerns over the planned, long-term changes in airwave use.


BROADCAST DATA | FACILITY BENCHMARKING

HLW International LLP © 2015


The Future is Now


Content producers and broadcasters have experienced the hard reality of another year of having to react to near constant change in their industry—change that is driven by technological advances and an evolving marketplace. To adapt in a considered way is to remain competitive. Change in the past has primarily been driven by technology. Now, with marketplace changes, as well as new demands for increased productivity and efficiency for existing real estate, content producers and broadcasters everywhere are affected by the need to adapt to new workflow. Furthermore, traditional facilities for the industry, especially those dating from the 1960s and 1970s, were built at a time when interior space standards were much less efficient than current requirements. The result is that interior renovations of existing, working facilities will continue to be necessary. In summary, content production facilities managers are being pressured to be as efficient as possible. Newsrooms are the original “creative workplace.” For many years, newsrooms were the rare work environment where ideas were shared across desks and, when necessary, shouted across the floor. It is increasingly apparent in a range of workplaces that a working style that fosters collaboration and creativity—a dense style of planning—has many merits, and this approach has been adapted in offices around the world. The successful implementation, though, involves also providing employees with a variety of quiet zones, meeting facilities, and discussion areas. It is noteworthy that this can be accomplished while still reducing space standards. In the broadcast industry, a move to IP technology has permitted a less restrictive approach to the location of technical rooms, which has freed-up facilities planning to allow for achieving creative adjacencies and, at the same time, the efficient planning of technical spaces. Today’s workplace must support the creative staff in their work. In no way does this new mission prohibit or negatively impact the smart planning of technical infrastructure. It’s a win-win for all concerned. HLW International LLP © 2015


FACILITY BENCHMARKING REGIONAL TELEVISION STATION 52,031* USF

14% 3%

33%

MAJOR MARKET TELEVISION STATION 92,611* USF

BROADCAST

38%

13% 26%

15%

4%

9% BROADCAST

52% 22%

14%

5%

22%

28%

NETWORK NEWS BUREAU 30,508* USF

8%

26%

BROADCAST

59%

30% 28%


MEDIA CONTENT PRODUCTION NETWORK 68,960* USF

REGIONAL SPORTS NETWORK 51,465* USF

BROADCAST

KEY CONTENT PRODUCTION

WORKPLACE

POST PRODUCTION

OFFICE SUPPORT *Circulation distributed

DISTRIBUTION PRODUCTION SUPPORT

15% 3%

33%

6%

BROADCAST

40%

22%

4% 7% 10%

16% 27%

14%

15%

41%

BROADCAST

36%

3%

33% SPACE TYPE

AVG.

BROADCAST 22% 45% WORKPLACE OFFICE SUPPORT

28%

29% 26%

HLW International LLP © 2015


OTHER FACTORS Sustainability represents an additional pressure for rethinking existing facility infrastructure in this industry. Content producers and broadcasters, like other industries, are realizing that the benefits of a sustainable workplace include a measurably more productive workplace, in addition to the tax incentives and resultant energy efficiencies. The new norm for the industry is to include sustainable practices, policies, and materials in the design and construction of a broadcast facility. Consistent with this environmentally responsible mindset is a desire to seek sustainable approaches regardless of whether or not the client will pursue formal LEED* certification for the new or upgraded production facility. Current “green” rating systems are not refined enough for the realities of broadcast facility energy needs. Still, many architectural and engineering firms are directed by their patrons to adopt an aggressive, proactive strategy for identifying and implementing sustainably driven design and material decisions. Any added financial burden resulting from the choice to “go green” can be alleviated by the reduction of long-term operating costs. Moreover, facility owners benefit from the perceived added value transpiring in the workplace. Major renovation and new facility projects are at an advantage in the contemporary construction environment, as current practices take into account “green” costs that are not considered optional. Significant government mandated energy requirements are already in place for initiatives, such as those involving lighting strategies, many of which mandate the use of new technologies and approaches. It is possible to clearly demonstrate cost savings by introducing green design measures during the early phases of a project and by sustaining these efforts with the support of an integrated team throughout the life of the project—that is in lieu of tacking on individual sustainable measures late in the design process. * LEED, or Leadership in Energy & Environmental Design, is a green building certification program sponsored by the US Green Building Council that recognizes best-in-class building strategies and practices. To receive LEED certification, building projects satisfy prerequisites and earn points to achieve different levels of certification


OUTLOOK: 2016 As widely reported by the US commercial building construction media, construction costs have increased steadily in recent months when compared to previous years. As of the writing of this report, costs have increased approximately 10% - 15% overall from 2014 to 2015. Although some leveling off is expected, early indicators show construction costs may increase another 4% - 8% in the coming year. Due to a buoyant construction economy, we do still expect projects to commence in earnest, as prices are expected to continue to increase. We expect this to occur despite the fact that some locations are still experiencing elevated costs and the markets are only beginning to normalize after experiencing highs. Because pricing is continually on the move, the short to medium term outlook suggests cost advantages in bidding a construction project now rather than waiting for the market to move higher.

HLW International LLP Š 2015


2016 Broadcast & Media Production Facility Construction

COST OUTLOOK PURPOSE OF THIS REPORT

HLW, together, with supporting data from Benchmark and CBRE, has issued this report to assist anyone involved in the broadcast and media content production industry in determining probable costs for the creation or alternation of a content media production facility. The data contained within the report is designed to help with bracketing and benchmarking probable facility construction and project costs, including design, construction, renovation, and furnishing. This document is conceived as a benchmarking tool and is, therefore, not designed to replace a detailed cost estimate prepared during the course of a specific project. Rather, this document is intended to help you set a target and subsequently measure progress.

METHODOLOGY We have employed a broad, multifaceted approach in generating the forecasts contained within this report. The methodology for developing the updated costs by facility type involved the following components. In-house cost indices from broadcast media project experience Analysis of contractor bids Review of nationally published cost data Review and analysis of labor rates and productivity All costs are given in Usable Square Feet (USF), defined as the actual enclosed interior space required to house the project or function. Rentable Square Feet (RSF) varies according to the location or city. Accounting for future market fluctuations is critical when benchmarking. It’s important to allow for escalation contingency. The economic data shows that in the last twelve months preceding July 2015, costs have escalated approximately 4.3% in New York City and at an average of 2.3% nationally. The benchmarks shown in this document are derived from current market pricing. Therefore, this data suggests that we can conservatively project these benchmarks into future years and guard against labor and material escalation. For example, if your project is due to start in eight months and in New York City, take 4.3%, divide by 12 (months), and multiply by 8 (months). This is the factor that should be added to account for future cost increases. *TABLE 1: Shown here are New York City tri-state area broadcast and media facility renovation construction costs per gross square foot (GSF) by facility type. Construction Costs are based upon union construction, which typically results in higher quality, on-time construction and therefore, may be more expensive.


YEAR 2016 RENOVATION CONSTRUCTION COST

FACILITY TYPE

per GSF ranges

1. NEWS OR SPORTS-ORIENTED PRODUCTION AND BROADCAST FACILITY (SMALL SINGLE HEIGHT STUDIO)

$280 - $325

Assumes studio height is available within exsisting building

2. NEWS OR SPORTS-ORIENTED PRODUCTION AND BROADCAST FACILITY (LARGE DOUBLE HEIGHT STUDIO) Assumes studio height is created by removing or expanding structural condition of site

3. VIDEO & AUDIO PRODUCTION FACILITY (NO LIVE OUT)

$300 - $350

$250 - $300

Assumes only minimal UPS for shutdown and no back-up power/generator

4. MASTER CONTROL/NETWORK RELEASE FACILITY Cost for entire facility not just room type

$350 - $400 TABLE 1: BROADCAST DATA COST BENCHMARKING

HLW International LLP © 2015


Construction Cost Ground Rules CONSTRUCTION COSTS All hard construction. As a test, imagine raising your building into the air and turning it upside down. Whatever components don’t fall out (or rattle around within the building) are considered part of the hard construction cost. For the purposes of this report, when a broadcast and media production building is considered, construction costs also include the following aspects of a building.

• • • • • • • • • • • • •

Walls and isolated wall assemblies Doors and acoustic doors Acoustic isolation and treatments systems Ceilings and isolated ceiling assemblies Mechanical systems and redundancy requirements Electrical power and distribution systems: service side transformers, backup generators, grounding systems, and UPS, PDU, and ATS systems Plumbing systems Fire protection systems: sprinklers and sprinkler booster pumps, pre-action systems, and clean agent systems Architectural lighting Broadcast lighting: grids, trusses, transformers, and DMX cabling and circuiting (but dimmer systems and racks do not apply) Long span construction to create studios and other double height spaces Raised and accessible floor systems Pathways, conduits, cable trays, and termination panels for broadcast, IT, and telecom systems are included. However, the actual cabling, racks, rack gear, servers, local interface devices, control surfaces, and computers

• • •

are not included. Building management and automation systems Basic building commissioning Pantries or non cooking cafe; no cooking or kitchen/servery space

General Contractor’s overhead/profit or construction manager’s fee/general conditions. Finally, it is also customary and prudent to include a design contingency in the construction cost.


What do you get for interior spaces per square foot $100 - $120 PER SQUARE FOOT • • • • • • • • •

Carpet (material cost $20/square yard) VCT Flooring, vinyl base, ceramic tile No minimal millwork (plastic laminate finish) Basic drywall construction Standard 2ft x 2ft acoustical ceilings Standard hollow metal doors and frames Minimal lighting

• • • • • • • •

Minimal architectural finishes

• • • • • • • • •

Specialized paint finishes

Standard paint finished Basic wall covering No exposed duct work No exposed structural elements No interconnecting stairs No slab openings Standard pantry appliances

(2ft x 2ft, 2ft x 4ft or high hats)

$140 PER SQUARE FOOT AND UP • • • • • • • • •

Custom carpet (material cost $40-$50/square yard ) Carpet tiles Custom Millwork Detailed drywall construction Sheetrock or acoustical ceilings with soffit and fascias Custom doors and frames with sidelights Extensive array of lighting fixtures

Custom wall covering Exposed Duct work (round, oval) Exposed structural elements Interconnecting staircase Slab penetrations Ornamental metal Architectural glass Access Floor

High End architectural finishes

HLW International LLP © 2015


MAJOR PURCHASED ITEMS The following major purchased items are not included in the construction costs.

General furniture. Items, such as desks, workstations, chairs, conference room furniture, furniture for common or break areas, file cabinets, coat hooks, artwork, etc., are considered “general furniture.” In addition, we consider items generally

• • • • • • • • • • • • •

referred to as “FF&E,” or furniture, fixtures and equipment. Broadcast, IT, Telecom, and computer cabling Telephone system, paging, and security systems Desktop office computers Broadcast technical equipment: racks, rack gear, servers, local interface devices or control surfaces, consoles, and computers Broadcast lighting systems, including dimmer panels or racks and lighting instruments Audio visual equipment Moveable or benchtop testing and repair equipment ENG or microwave communication equipment Set construction or installation Antennas, antenna design and surveys, and satellite dish equipment Signage Artwork Expanded or extended commissioning

The Total Built Area Construction cost measures are based on gross square feet, which constitutes the total built area. Net, or usable area, is only a portion of what you are building.

TOTAL PROJECT COSTS Total project costs include the sum of all of the costs necessary for an owner or client to build a project. These additional non-hard construction costs (listed below) are referred to as “soft costs.” The predictable range of soft costs includes the following items.

• • • • • • • • •

Architectural and engineering design service fees Other consultant fees Project Manager fees Set design fees Broadcast technical design and integration fees FF&E (see items listed under “Major Purchased Items”) Construction Manager fees (if part of the project) Construction change orders and owner’s contingency Legal fees Permits and filing fees

The unpredictable range of project soft costs can include land costs, financing costs, moving costs, and relocation and/or business interruption costs associated with renovations. Together, these expenses could far exceed the cost of construction. Be advised that these costs are not under the control of the consultants or construction professionals, hence, the lack of predictability.

CONSTRUCTION COSTS AND PREDICTABLE OVERALL PROJECT COSTS • •

New construction, excluding land and financing, ≈70% – 80% of project costs Renovation construction cost ≈ 65% – 75% of project cost.


21+18+4579

RULES OF THUMB FOR GENERAL TECHNICAL INTERIOR CONSTRUCTION STRUCTURAL $5-$7

ELECTRICAL $50-$68

PARTITIONS/DOORS $15-$21

WINDOW TREATMENTS $2-$3 PAINT/WALL COVERINGS $4-$5

MILLWORK $12-$16

HVAC $39-$53

CARPET/ FLOORING $12-$16

ACOUSTICAL TREATMENT $5-$7 CEILINGS $10-$14

PLUMBING $4-$5

LIGHTING GRID $4-$5

SPRINKLER $5-$7

13+8+31119151246

Hard Costs 63%

STRUCTURAL 2% PARTITIONS/DOORS 6% WINDOW TREATMENTS PAINT/WALL 1% COVERINGS 1% MILLWORK 4% CARPET/ FLOORING 4% ACOUSTICAL TREATMENT 2%

Soft Costs 37%

FURNITURE 13%

PROFESSIONAL FEES 8%

CARPENTRY (CEILINGS) 7% LIGHTING GRID 2% SPRINKLER 2% PLUMBING 1%

ARCHITECTURE 3% MISC. FEES, PERMITS 3%

IT/AV BUDGET 11%

HVAC 15%

ELECTRICAL 19%

HLW International LLP © 2015


Increased electric Increased HVAC Specific electrical requirements 24/7 operation requiring supplemental air access 24 hour AC floor

Perimeter core for maximum open space interior offices High floor-to-floor height Maximum load capacity 24/7 operation Accommodation access floor

Increased structural capacities Accommodate access floor Adequate power

BASIC

$250 +

$300+

ENHANCED

$275 +

$325+

$300 +

$350 +

HIGH END

Windowed offices Open Plan Electronic Library and condensed filing 30% technology 70% Office Secure entry 24/7 operations

INTERIOR CONSTRUCTION COST PER SQUARE FOOT

WHAT ARE THESE FINISHED SPACES TYPICALLY LIKE?

CONTROL ROOMS

TYPE OF BUILDING OR SPACE NEEDED

TYPES OF SPACES

NEWS ROOMS


STUDIOS

EDIT ROOMS

RACK ROOM/ C&R

Windowless ewnvironment High floor-ceiling height High level of acoustic control 24 hour AC

Some acoustic control Sliding glass doors controlled colors

Enter room on access floor seperate AC from other areas Back up power

Large, open column free space Level floor slabs Height ceiling/slabs Heavier structural capacity

Enhanced office type space

Heavy floor loading Generous floor to floor height Ability to install backup door sources

$500 +

$180 +

$700 +

$600+

$190+

$750+

$700 +

$200 +

$800 +

TABLE 2: Broadcast Facility Construction guidelines according to type of space

HLW International LLP Š 2015


Seattle 0.79 Boston 0.90 New York 1.00 Chicago 0.89

San Francisco 0.95

Philadelphia 0.87

Denver 0.75

DC 0.74

LA 0.81

Dallas 0.65 New Orleans 0.66

Miami 0.67

OUTLOOK BY LOCATION

Local market conditions vary. Local conditions tend to be uneven, but the underlying market pressures, e.g., increased prices for commodities, steel, and cement due to global demand, will result in price increases irrespective of the local markets. Costs are going up nationally.

Construction Cost Escalation July 14- JULY July 15 CONSTRUCTION COST ESCALATION JULY 20142015 17150

10075

16950 16750

10025

National Linear (New York)

16550

9975

Linear (National)

16350 9925

16150 15950

9875

New York CCI Index - 4.37% Increase National CCI Index - 2.05% Increase

15750

9825

15550

ENR CCI Index - National

ENR CCI Index - NY Only

New York

July-15

June-15

May-15

April-15

March-15

February-15

January-15

December-14

November-14

October-14

September-14

August-14

July-14


Basic Cost Ranges for Technical Space BASED ON 2015 RENOVATION CONSTRUCTION $/USF RANGES NEWS/SPORTS ORIENTED PRODUCTION AND BROADCAST FACILITY (SMALL STUDIO)

$280-$325

NEWS/SPORTS ORIENTED PRODUCTION AND BROADCAST FACILITY (LARGE STUDIO)

$325-$350

RACK ROOM/CENTRAL EQUIPMENT ROOM

$700- $800

MASTER CONTROL/NETWORK RELEASE FACILITY

$350-$400

VIDEO & AUDIO PRODUCTION FACILITY (NO LIVE OUT)

$250-$300

POST PRODUCTION FACILITIES The following facilities are part of a larger building or facility, representing only a part of the full building cost.

• • •

POST PRODUCTION EDIT FACILITY

$180-$200

POST PRODUCTION AUDIO FACILITY

$250-$300

NEWS PRODUCTION $180-$200

RADIO PRODUCTION & CONTROL FACILITY

$375-$450

BRANDED GROUND LEVEL DISPLAY STUDIO

$625-$875

MAJOR CONCLUSION The most influential cost driver in 2016 will be decreased competiveness due to market pressures in local markets. In general, costs can be expected to increase 4% - 8% on the East and West Coasts and 3% - 5% mostly everywhere else (over 2015 levels).

HLW International LLP © 2015


Written by Keith Hanadel, Principal & Director of Broadcasting Design and John Gering, Managing Director of HLW International LLP, with research by Fred Sacramone of Benchmark Builders Inc. and Andrew Sumner of CBRE Project Management. HLW International, a 130-year-old design firm with practices in architecture, interior design, engineering, planning, and consulting, collaborated with Benchmark Builders and CBRE Project Management to develop a “Content Production Facility Construction Cost Index.” This index has been created to assist decision-makers as they plan for the future. The index is an efficient tool for the assessment of cost options for facility changes under consideration. The index takes into account the typical characteristics of the type of space needed, the level of infrastructure required, the estimated costs of individual components in the space, and what materials can be provided within various cost ranges. A serious of companion charts have been developed to guide broadcasters and production facility professional in the preparation of budgets as this work is considered.

CONTACT FOR ADDITIONAL INFORMATION Keith Hanadel Broadcast Design Director HLW International LLP 115 Fifth Ave New York, NY 10003 +1.212.353.4946 khanadel@hlw.com www.hlw.com/about/leadership/ John P. Gering Managing Partner HLW International LLP 115 Fifth Ave New York, NY 10003 +1.212.353.4744 jgering@hlw.com www.hlw.com/about/leadership/ Fred Sacramone Principal Benchmark Builders, Inc. 237 West 35th Street, Suite 901 New York, NY 10001 +1.212.766.8800 fsacramone@benchmark-ny.com www.benchmark-ny.com Andrew Sumner Director of Cost Consultancy CBRE 140 Broadway | New York, NY 10005 +1 212 803 6145 andrew.sumner@cbre.com HLW International LLP © 2015


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HLW Broadcast Report and Cost Index  

The Changing Content Production Landscape in 2015 was another big year for the content production industry.

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