Sales agency terms - what is standard?

F

Frame Solution

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I am currently negotiating the terms with an international sales agent and would like to know what is the norm in regards to:

A. Sales commission (they are asking for 25%, and if the film reaches sales of X amount it will be reduced to 20%) - these percentages include any fees they have to pay to sub-licensing sales agents.
B. Length of contract term (they are asking for 15 years)
C. What is the normal marketing cap to attend the major markets/film fests? (they will pay for this up front and recoup from gross receipts after calculation of sales commission)
D. Is it more advantageous to have them rep both international and US, or only international, and then wait until the film is finished to approach US Distributors myself?(They are giving me the option)
E. They are requesting the right to insert or have inserted their logo before the beginning of the Feature/Trailer in any produced materials. Is this common?
F. They requested under the terms that after a period of 1 year from the signature of the Sales Agreement, that they shall be entitled to license the Video on demand rights to a VoD-operator without receiving a minimum guarantee.

Any input to the above is greatly appreciated.
 
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My only relationship with a Sales Agent has been for a completed film so I don't have much insight into what the standard terms might be for a pre-sales might be.

Michael
 
Michael,

Thanks for your reply. It's the exact same terms and contract. It is to sell the rights to distributors, but they will be trying to pre-sell some of the smaller territories and waiting until the film is completed to sell to the larger ones since the larger ones generally want to see the completed film, unless you have a big star and/or director attached.

Any assistance or guidance you can provide to my questions above would be appreciated. Thank you.

Dave
 
OK -

My deal was for 20% for them to sell for all rights into all territories worldwide. The original term was for 5 years, we ended up at 3 with renewal. There is a cap on marketing expenses that is known up front. It did not include expenses for festival and such since they are already there and it part of their greater "cost of doing business". It is directly related to graphics and materials associated with the film itself. I get to approve each deal before it's done as well as sign-off on artwork, etc, being done by the distributors who have picked up the film so far.

I let them have both domestic (US) and foreign as I wanted to concentrate on my next projects and not be beating the streets for US distribution. They know their job, have their contacts, they are representing the film for me, so l let them go for it. Either party can get out of the contract with 30 days notice.

The right to insert their logo is a new one for me. That was not part of my deal or requested and in the end is marketing on their part. Trade that off for marketing expenses taken out of your pocket.

Also new to me is the VOD after a year. Are they perhaps a distribution company as well as a sales agent? Seems like with the last two items, it is tipping into distribution and brand. My sales agent can certainly sell VOD as part of the rights available, but there was nothing that kicked it in automatically on their part after a year. Now there can be good money in VOD, so perhaps the language in that section needs to be better defined. What is your revenue on VOD after a year? And where?

Aslo what are your deliverables for final film and who covers those costs and all that good stuff? Deliverables fell to me - HD, PAL, NTSC, letterbox, anamorphic, subtitles, textless, spit dialog lists, audio stems, etc.

Michael
 
Thanks, Michael. With regards to the cap on marketing expenses, I've heard it can be 25k, 50k, 75k, etc. Is there a way to pre-determine what's fair and reasonable? Is there a formula based on the budget of the film? This company includes expenses for festivals/markets in their contract:

---We work with a commission of 30% from the top and then a festival fee hereafter depending on the festival launch of the film. We work with transparent fees meaning that if your film is selected for Cannes you pay a specific fee for main competition or side section. This fee includes all costs related to our activities such as stand, representation, hotel, flights, advertising in general etc. We will pay for the costs of making flyers, DVDs and additional materials up front and the costs will be recouped from the income of the film.

Re Deliverables, I am responsible for all that.

Dave
 
MichaelP said:
OK -

My deal was for 20% for them to sell for all rights into all territories worldwide. The original term was for 5 years, we ended up at 3 with renewal. There is a cap on marketing expenses that is known up front. It did not include expenses for festival and such since they are already there and it part of their greater "cost of doing business". It is directly related to graphics and materials associated with the film itself. I get to approve each deal before it's done as well as sign-off on artwork, etc, being done by the distributors who have picked up the film so far.

I let them have both domestic (US) and foreign as I wanted to concentrate on my next projects and not be beating the streets for US distribution. They know their job, have their contacts, they are representing the film for me, so l let them go for it. Either party can get out of the contract with 30 days notice.

Michael
Click to expand...


On your deal, do you have a provision where the sales agent gets paid back their expenses and 50% of the commission first, then the other 50% AFTER the equity people have been paid back?

Have you heard of that type of structure?
 
I have not and perhaps it is the difference between selling a completed film versus selling a film yet to be made.

Michael
 
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