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Percentage of sales?


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#1 Erik Turestedt

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Posted 28 March 2009 - 10:29 AM

Just wondering,

anyone know how common it is to shoot independent, and offer actors/team a percentage of a possible future distribution?

Anyone did this, or know if it's common?

I'm planning a feauture where a budget can't include actors/team... however I haven't got much problem getting people for free who believe in the story.

But I wan't it to be jurudically correct done with a lawyer an so on... and it's quite hard to guess the percentage...

Is there anyway of counting on percentage? Like how much from budget does a main actor get? A boom operator, and so on?

It's of course hard to estimate... It's probably easier to try to estimate how much a boom operator costs per day, and count on a normal filmbudget.

But when it comes to financiers...

I have a financier who's prepared to support with 30% of the budget if we get them a good deal...

How much should this partner get from total sales in %?


Would be interesting to hear of others idéas and experiences in this...


Regards,

Erik
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#2 Brian Drysdale

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Posted 04 April 2009 - 09:43 AM

I think you're talking about deferred payments or where you pay the crew a percentage of the net profit, which after various distribution deductions like marketing etc means no one actually gets paid.

I know on one film the lower grades each got 1% net profit and then it worked up the scale. I suspect it might come down working out what your financier needs and coming up with a split that works depending on the size of your cast and crew and if the latter includes any willing "names".
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#3 John Brawley

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Posted 04 April 2009 - 05:53 PM

Just wondering,

anyone know how common it is to shoot independent, and offer actors/team a percentage of a possible future distribution?



It's common.

I've never heard of crew (myself included) getting a cent from this kind of deal.

This is usually because unless the film is so spectacularly successful it make millions (and you probably won't be one of these), the crew on this kind of deal is so far down the line in terms of recoupment that they never see any of it.

Ever been to a wedding where they have the giant stack of Champaign glasses built into a pyramid ? As the Champaign is poured it overflows and fills the glass below.

Imagine doing this with only one single bottle of Champaign

The cinema owners, the distributors the sales agents are at the top. And they want to recoup all their *investments* in the film, their p&a, long lunches and trips to Cannes, usually with a markup.

They will get this before the producer even gets anything. Remember even the MG is repaid.

Then your investor that want's to put in 30% of your budget will want the right to be first in line BEFORE you as the producer to at least recoup their 30%. After that they will want to split, 50% to them of profits, 50% to you the producer. You take your cut and then distribute to the crew. Of course after the other distributors, sales agents are still taking a percentage as well.

If someone says to me deferred payment then I know I won't get anything.

I've sometimes suggested that I could charge my commercial rate, and then have that *fee* treated as a dollar investment (much like your 30% investor) but for some reason noone wants to do that. That's because the TRUE budget then becomes much larger (and closer to what it is)

So then your 1 million dollar Indie is now a 10 million dollar film. Your 30% investor is only going to get a much smaller percentage for the same cash outlay, and in reality, on a 10 million dollar film is less likely to get any Champaign, especially if it's at the same time as the crew are getting it.

It's common for sales agents and distributors to make money from your film but for the film to not recoup it's budget.

in Australia, a film needs to generally return 4 times it's budget to *break even*.

A 1 million dollar film needs 4 million at the BO before you're at square 1. Im sure there is a similar formula for your part of the world.

Don't let it stop your crew and actors. If they want to be part of it for free then great. Go and make your film with their donations and good will.


jb
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#4 Jim Keller

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Posted 04 April 2009 - 08:54 PM

Every deal is unique. I've seen producers take as little as 5% of the "producer's gross" (the money paid to you by the distributor), returning 95% to the investors. I've seen producers take 50% of the producer's gross, returning 50% to the investors. More common is a sliding scale, where the investors receive a significantly higher percentage (even 100%) until the film recoups their initial investment, and then the producer's percentage increases with each subsequent full return.

As for cast and crew, the ethical thing to do is to treat them as investors as well. That means their usual salary is considered an investment and they're paid back on the same schedule, (out of producer's gross, not net). If the cash investors balk at this arrangement, inform them that it can be avoided by them coughing up more money so they can be paid up front.

Note that if you're on a union contract, residuals will also be owed out of the producer's gross, so don't promise more return than you can deliver. No one will let you renegotiate later to correct your mistake, and bankruptcy will be your only option.
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#5 Joe Giambrone

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Posted 30 May 2009 - 12:32 PM

Every deal is unique. I've seen producers take as little as 5% of the "producer's gross" (the money paid to you by the distributor), returning 95% to the investors. I've seen producers take 50% of the producer's gross, returning 50% to the investors. More common is a sliding scale, where the investors receive a significantly higher percentage (even 100%) until the film recoups their initial investment, and then the producer's percentage increases with each subsequent full return.

As for cast and crew, the ethical thing to do is to treat them as investors as well. That means their usual salary is considered an investment and they're paid back on the same schedule, (out of producer's gross, not net). If the cash investors balk at this arrangement, inform them that it can be avoided by them coughing up more money so they can be paid up front.

Note that if you're on a union contract, residuals will also be owed out of the producer's gross, so don't promise more return than you can deliver. No one will let you renegotiate later to correct your mistake, and bankruptcy will be your only option.



I am very interested in more information like this, on how to structure a very, very, very low budget film production deal. Any sources?
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#6 Erik Turestedt

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Posted 29 July 2009 - 09:07 PM

Thanks a lot guys... Appreciate the good replies...

Well it's a hard business. I really regard spending time as invested money... Since salaries of course stand like the biggest part of a budget, some low budget feauture's couldn't coup with it. Me, myself havent made a single dime on any dramatic production. Although I completely earn my living from commercials and infomersials, my only future vision is feauture film. Jumping in to it, I realize it's a big hell understanding distribution and so on... Any tips on distribution and funding material to read (or sites)?
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