Deferred Payment...

DavidG

DavidG

Active member
Hi,

I am currently putting a low budget film togeher and trying to get some known British talent from the indie film scene. I am working with very little budget so am hoping that they will work on deferred payment with a distribution 'points' system. I love the idea behind it but do you know if it runs any risk when it comes to getting a distribution deal? When I walk up and say I have x movie but x amount of points have been issued...That or I offer the points from whatever I make from the film if that's possible. If anyone has any ideas on this subject or any links to useful literature I would be very grateful

Thank you,

David
 
Points you offer are irrelavent of the distributor, it's based on producer net. Say you give 10% worth of profit participation away... and the distributor takes 35% percent (it will probably be more.), then the 65% you make is 100% of the producer net. You'll give the 10% from that (or 6.5% of total income).



(Producer Net = Total Profit - Distributor Cut)
 
Keep in mind everyone without a budget says the deferred payment line, and to experienced talent's ears it sounds like 'you're doing this for fun'. They need to be totally hooked on the script first, and make sure you at least have good catering.
 
The business plan would also be used to get talent if they can see you have some idea of getting this into distribution. Over the years I have so many points in so many films and have yet to see a dime. Not that it can't be done, but passion for the project will be what gets them to do it.

Michael
 
can someone explain how points work? are "points" percentage points, meaning that there are only 100 that can be contracted out? or can any number be dispersed, like say 200, giving each point the value of 0.5% ??? or if 400 points were contracted out, their value would be 0.25%?
 
Zak Forsman said:
can someone explain how points work? are "points" percentage points, meaning that there are only 100 that can be contracted out? or can any number be dispersed, like say 200, giving each point the value of 0.5% ??? or if 400 points were contracted out, their value would be 0.25%?
Click to expand...

Haha I know, I always assumed it was the way you put it. Like a "point" is a sorta stock, so you assign a value to a "point". Probably for the sole reason of duping particular people originally...

That's always been my assumption, otherwise why not just say percentage, unless point is in fact another way of saying "percentage of a percentage"
 
No points are percentage. There are 100 points. If you get 5 points on the back end, you have 5% on the back.

That being said, it is usually points after investment is repaid. Like on my feature, I get paid back fully before any profits are divided among participants.

But I agree that to basically anyone they will look at points on the back end of an indie film as being something they most likely will never see. That's just how it goes. It's not overly convincing... it's a good-faith gesture more than anything, I'd say. Just showing them you value their time and IF it somehow does hit, they'll succeed financially with you.
 
Points are more than like also only Producer's Points...as in Net Profit points which will certainly be a far smaller percentage than the revenue earned by a film.

So as a basic example...Writer has 5 points...film sells for 100,000 (assume all rights buyout). Investor is paid back 50,000 plus 15% 7500. Now, the Producer's Profit is 42,500. Now the 100 points can be divided.

Writer's 5 points translate to: $2125

That's likely far too basic but it gives the general idea of how it would work.

-M
 
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