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Distribution : Distribution company have offered to match any money my producer can acquire for my script. Is this normal practice as Alarm bells are ringing. by Richard L. Davies

Richard L. Davies

Distribution company have offered to match any money my producer can acquire for my script. Is this normal practice as Alarm bells are ringing.

A company that my producer has signed a deal with has said that if we can raise 250,000 then they will match it. They are not a production company. I do not want to enter in to anything that I am not sure of.

D Marcus

Get it in writing. Have the agreement looked over by an attorney. If the company is legit and they can put up $250,000 they will sign a binding agreement. Can you raise $250,000 without them? If you can you might be able to find a better deal. But it will help you raise money if you have a binding agreement to match what you raise. This is standard with some distributors, but it's rarely what it seems so an agreement and contract is essential. If your producer is business savvy then this could be a very good deal.

Richard L. Davies

Thanks for the heads up. Ill take it to them and see what they say,

D Marcus

I should have read your post more carefully. I just noticed that you wrote that your producer has already signed a deal. I hope the deal your producer signed is a good one. Good luck.

Georgia Hilton

Have you read the contract? It has a vague sounding connection from your post to a possible Pre-sales deal. Distributors do pay in advance for projects. Normally if this is done with a reputable distribution company and a real contract is signed you would either get a pre-payment of some amount OR they would tie the actual payment to delivery of the project. Either way, IF ( big IF ) the producer is real, and has , in fact, signed a pre-sales deal, then that contract can be taken to banks that deal with feature films ( like Wells Fargo and Deutsche Bank) and factored for a percentage of the contracts value for a loan for production. Taking this money is dangerous, unless you know for a fact that you can find the rest because you are now obligated to the BANK and the DISTRIBUTION company. The smart way to play this is to collect all the contracts and take those to other potential investors / financial institutions to close the remaining required funds. Once the film is completed and delivered - to the acceptable quality of the distribution company - you would get your pre-sales payments and could then pay off the bank note. Sometimes you can get enough to make the movie from pre-sales advances by factoring the contracts. For example if your film has a budget of $500K and the distribution company offers a pre-sales deal of $500K, then you can go to the bank, factor the deal for $300K lets say ( assuming your producer/production company has an acceptable track record of delivery ) now you have $300K of the $500K . you could then secure gap financing based on this deal for the other $200K... Your Producer should be actively reviewing these options and seeking funding from these various methods..

Richard L. Davies

Its a pre sales deal I've been told. But i don't know the specifics yet.

Georgia Hilton

that's actually good news then. But, I have never heard ( doesn't mean it doesn't exist ) a presales deal with "matching funds"... normally you get a sales agent who you do a deal with for International and/or Domestic distribution. Then they work the deals for each individual market. Each market ( say the UK ) has multiple distributors and the agent sorts out who offers the best deal for that market. So you would have many Pre-sales deals in your hand. For example: A film i'm n post on right now has over 5 individual pre-sales deals and more in discussion. IF you have a single Pre-sales deal offering to match funds, it sounds like the deal is a world-wide deal... I would certainly get a professional sales agent and an attorney to review the documentation prior to getting excited about it. It might be a good thing, but it might end up eliminating other avenues of sales or even funding... tread carefully here i would think.

Mark Sherman

I would advise getting an entertainment attorney. Don't sign anything without one.

Georgia Hilton

just a last thought... Along with what Robin mentioned, if you DO end up doing a pre-sales deal you also need to understand that yes, there will be up front funds coming in but you ARE responsible to deliver. AND, to deliver to the specs in the contract... For example most of our overseas deals require the movie ready for theatrical, broadcast and digital formats, a number of specific mixes and audio tracks, fully loaded M&Es, music, 20 to 40 minutes of extras ( behind the scenes, bloopers, deleted scenes, etc ), over 100 photos from production (50 on camera and 50 behind the camera ), ALL the paperwork/contracts/deal memos etc, E&O insurance, the full AS SHOT script including dubbing data (time code start point for EVERY line in the film with the EXACT line as spoken ), Digital delivery, Tape delivery, and a bunch of little stuff... So make sure you can meet every delivery aspect of the deal besides just shooting a movie. oh, and they will want a hard delivery date... so even if it sound like a good deal, be ready for all the delivery requirements that might bite you in the proverbial butt. And our domestic Lions Gate deal.... ugh. makes the international deliveries look easy.

Jon Bonnell

If you think a domestic Lions Gate deal is hard try 20th Century Fox... headache unless the producer had all their ducks in a row... luckily the first film I delivered there the producer was on their game.

Jon Bonnell

Now, Richard, to answer your original question. You are the writer. You arrangement is with the producer. If he has already made an agreement with you there's not much you can do unless you have some contractual oversight (like, you are also producer). If he has optioned your script already, just hold on for the ride and watch whatever escape points you have in your agreement with the producer. As long as he doesn't sell your script to them (which he may or may not be able to do depending on your agreement) there usually isn't too much you can do. That said, if a distributor is willing to put up 50% of the budget, you've got a good product there. They don't often put their money where their mouth is BEFORE its even made (let alone after most of the time). I'm going to guess that the terms they WANT are world wide, all rights, for perpetuity and that they will take their fee first (25-30%), then recoup their sales and marketing expenses, and then recoup their investment before reporting profits to the producer and his other investors. Not optimal at all, but I'm sure that's at least where they started.

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