Producers face many challenges during the creation and exploitation of an audiovisual project. Complying with contractual obligations towards multiple parties is one of such challenges. One of the contractual obligations is payment of a share of the revenues. This includes payment to investors, co-producers, talent, and others.
In this article, we will focus on management of the revenues and how Collection Account Management can be beneficial to producers.
A Collection Account is an account set up in the name of a neutral third-party Collection Account Manager (or CAM), who receives from the local distributors the revenues generated by the international exploitation of the project.
The revenues include royalties payable under straight distribution agreements, minimum guarantees and overages. Subsequently, the CAM disburses such revenues to the multiple beneficiaries of the project.
A Collection Account can be set up for feature films, documentaries, television series, animation, video games, and even for non-audiovisual projects.
Anyone that is entitled to receive a share of the revenues of a project is called a beneficiary. Any beneficiary with a major financial interest in the project, may look to establish a Collection Account.
Generally, such beneficiaries may include producers, sales agents, financiers (lenders, equity investors, or tax credit financiers), actors, directors, writers, guilds, talent agencies, or law firms.
In practice, it is often the main producer, the sales agent, a financier or a law firm that sets up the Collection Account.
A production may need a Collection Account if it meets one or more of the following characteristics:
There may be several reasons for parties to engage a CAM:
The producer and the parties with a major financial interest in the project, together with the CAM enter into a Collection Account Management Agreement (or CAMA). At the same time, the Collection Account is opened.
The parties that sign the CAMA may include production companies, the domestic and international sales agents, financiers like lenders, equity investors and tax credit financiers, the guilds (SAG-AFTRA, DGA, WGA) if residuals are payable and talent like actors, directors, writers or individual producers.
The CAMA includes the Recoupment Schedule of the project.
The producer, the sales agent, and / or the worldwide distributor instruct(s) the local distributors to pay the royalties due under the Distribution Agreements, into the Collection Account.
The CAM allocates and disburses the revenues from the Collection Account to the beneficiaries in accordance with the Recoupment Schedule in the CAMA. At the same time, it supplies the parties with all the relevant information related to the revenues and makes such information digitally available.
The producer has a particular role in independent production. He or she can be seen as the project leader who enters into agreements with all individual parties of interest. The producer therewith incurs multiple liabilities and obligations vis-à-vis financiers, talent and guilds.
Collection Account Management may be of use to the producer during production, for financing purposes, for sales and distribution and in connection with the producer’s contractual obligations and liabilities.
Below we will point a couple of specific benefits of Collection Account Management for producers.
Collection Account Management during Production
Collection Account Management during Financing
Collection Account Management and Sales & Distribution
Producer’s Contractual Obligations and Liabilities
Collection Account Management is essential for independent productions, with multiple financial sources and distribution channels.
Execution of the CAMA with included the Recoupment Schedule, safeguards the entitlements of the beneficiaries, including producers, sales agents, financiers, talent and guilds.
The rights, obligations and liabilities of the producer are centralized in the CAMA.
The producer can benefit from establishing a Collection Account for production, financing, sales and distribution purposes, and to deal with multiple contractual obligations and liabilities.
I have been working in film and TV since 2007. Through my consultancy firms XamanHaC and Zannoni Media Advisors, I have been involved as consultant and representative for amongst others Fintage House and Visualnet. For Fintage I negotiate agreements for films and television series, and am involved in business development and relationship management specifically in the US, Latin America and Spain. For Visualnet I expand their business globally and specifically in the US, and work on business development and client prospection.
My focus is business & legal affairs, business development and prospection, and production, distribution and financing in and from Latin America. I have given presentations, workshops and seminars at universities across the globe and at events such as the yearly conference of the National Association of Latino Independent Producers in the US (NALIP), the Winston Baker Film Finance Conferences, the Rio Film Market, the Bogota Audiovisual Market (BAM), and at the Rio Film Market and LATC Program in Los Angeles. Born in the Netherlands and a Dutch-Italian citizen, I am fluent in English, Spanish, Dutch and Italian, and basic in German.
More Stage 32 blogs by David Zannoni:
Let's hear your thoughts in the comments below!
Got an idea for a post? Or have you collaborated with Stage 32 members to create a project? We'd love to hear about it. Email Taylor at email@example.com and let's get your post published!
Please help support your fellow Stage 32ers by sharing this on social. Check out the social media buttons at the top to share on Instagram @stage32online Twitter @stage32 Facebook @stage32 and LinkedIn @stage-32
|Coffee & Content: Kate Winslet's Acting Secrets & Screenwriter Roundtable|
|How To Build a Universe From Scratch|