Day Five Flashcards
(32 cards)
Independent film
No distribution. Sold by a sales agent. Split distribution rights worldwide.
Producer’s reps
Market and sell films domestically. CAA, WME, UTA. 10% fee cap.
Collection agents
Gather and disperse international revenues as a way to have transparency in the system. 1% of revenues fee.
Completion guarantors
Guarantee to investors that a film will be completed. Approve budget and schedule. Require insurance and contingency. Can fire director, producer, etc. Fee of 2% of budget.
Sales agents
Market and sell movies internationally. Provide production finance through pre-sales. Generate international estimates.
Minimum guarantee
Initial sum paid to the producer regardless of how the film performs. 20% upon commencement and 80% upon delivery.
Overages
Money paid to the seller if the film does well.
Sales agent deal terms
5% to 30% fee. 50k to 175k marketing fee.
Servicing fee
Marketing department and business affairs helps in finalizing a deal.
50/50 OTT deals
Take no money upfront. Whatever money made in country, split 50/50 after marketing/expense deductions.
US back-stop deals
Letter of intent from a distributor demonstrating interest provided the script and cast remains the same and assuming a portion of the film goes unsold on the market.
Senior secured debt
Money lent by a bank against collateral. Last money in, first money out. Can foreclose on film on film. No box office performance risk.
Banks
Charge interest and fee for lending money against security taking into account discounting by risk and time.
Acceptable collateral to debt providers
Production incentives, pre-sales/MGs, gap financing by sales agents.
Gap financing
Loan secured against unsold territories and rights.
Collateral
Property or asset that a borrower offers as a way to secure a loan.
Credit worthiness of distributors in pre-sales
Studios 100%, major indies in major territories 90%, minor distributors in minor territories 50%. Combination of country and distributor.
Gap financing collateral
200% coverage against unsold territory estimates by sales agent. No more than 20% of production budget.
Value of package
Based on actors, directors, genre (action/thriller high, comedy mid, faith/African American low).
International value
70% of budget. Europe big 5 and Japan/Korea.
Senior secured debt pricing
0.5% to 2.5% fee. Interest based on prime rate plus, federal reserve, and is higher for gap financing.
Mezzanine finance
Money lent by a financier/hedge fund against collateral. Aggressive and expense senior debt. Fee of 5% to 10% with interest of 12% to 25% and 10% plus ownership.
Equity
Investment that owns the film in perpetuity. First money in, last money out. No security. Recoups after senior secured and mezzanine. Performance risk.
Equity ownership
50% of film or 1/2 of budgetary contribution.
