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Old 07-17-2015, 11:09 AM   #1
JetMonkey
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Fair producer's percentage

Here's my situation. After a few years in development, my own feature may now finally get made. I was contacted by another producer who likes my script and wants to help me produce it. Although they are not bringing any $$$, what they did offer is bringing a known talent who has quite a good fan base in order to start a crowdfunding campaign. Ok, fine I said. With the talent now attached to the film, funds may possibly be raised to make the film happen... something I'm not able to do on my own unless I get a hugh loan.

So my question is this... I need to draw up a producer's agreement and want to know what is a fair percentage to give the other producer IF THE FILM BECOMES PROFITABLE. I brought the project (script, production company, etc.) She brought the talent who's fans will hopefully donate enough to make the film. Is 50/50 fair for the profits of the film?

Btw, whatever funds are raised by the campaign, I do not consider that funds that she brings in. That is funds directly from the talent's fans and do not need to be reimbursed. Only profits that the film may make once distributed.

Thanks, guys!
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Old 07-17-2015, 11:17 AM   #2
directorik
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Yes. A 50/50 split is fair.
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Old 07-17-2015, 11:20 AM   #3
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I'm completely unqualified to say anything here, but I'm going to anyway.

Holy crap, 50% of your profits just for a referral? No actual work, no money invested, no time invested, no creativity, nothing but referring someone.

Which brings me to my question.. if they already referred the talent but there is no agreement in place why do you need to give them anything at all?

Was there any sort of discussion about what this producers expectations are?

I think it's fair to give them something but 50% .. yikes.

Aren't you the one taking all the risk?
What if you get an investor? Is their cut going to come from your 50% of the pie ?
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Old 07-17-2015, 11:40 AM   #4
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If the project is not funded because of the lack of talent then
there is no profit to split. There is far more to funding (and
making a profit) than the creative, the time and the work.
Attached talent can be the difference between no funding and
no audience and getting funding and attracting a paying audience.

For me it's worth a 50/50 split if someone brings in the talent
that turns my time, work and creativity into a money making
product. I would rather own 50% of a movie that makes money
then 60 to 75% of a movie that makes nothing. And if bringing
in talent that I can't bring in and will draw a crowdfunding interest
and a paying audience then that is worth a lot to me as a producer.
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Old 07-17-2015, 01:03 PM   #5
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I tried seeking out an entertainment attorney to ask, but they never return calls. Directorik, That's my thinking as well, but I wanted to get people's opinion on here. The producer happens to know the talent personally and is able to bring him on the project. Without him, the funds will most likely not be raised. So yes, eventhough I'm taking on risk, without the other producer's help, this film won't get made (at least not for a much bigger budget). That to me is pretty much equal. I will still own the film and retain creativity rights. This is just concerning if the film becomes profitable.

Sfoster - There hasn't been a discussion yet as to what the other producer would like as far as compensation. This is why I'm doing this now at the beginning. Also, if there's another investor that surfaces, then the profit will then have to be worked out 3-ways according to how much the extra investor puts in. One last thing... I am not putting any of my own $$$ in this. So, what would you say is fair for a "referral" of a talent that may be able to generate the entire film budget?

Last edited by JetMonkey; 07-17-2015 at 01:12 PM.
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Old 07-17-2015, 02:34 PM   #6
directorik
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I suspect Sean will hate this. But I look forward to his answer on
what is more fair then 50/50.

Since you (JetMonkey) are bringing no money to the project and
Producer2 is bringing the needed element to raise money then
P2 has a higher financial claim than you do. The talent also are
taking a risk – if their names to not bring in the needed funding
and the film is not financed that diminishes their “name”.

Of course without your script there is nothing for P2 to bring
talent to. However, people will not donate to the crowdfunding
(and then pay to make the movie profitable) based on the script.
This is two people with different contributions that need each
other to make a movie happen. I see no reason for the two of
you to split the profits 50/50.

And that leads us to how profits are calculated and “split”. A longer
rather complex issue. You and P2 will most likely NOT be getting
100% of the “profits” from the movie. You will be splitting the
“producers share” so if anyone else enters the picture who will be
getting points you and P2 will be 50/50ing your points. The actors
whose names made the crowdfunding possible should be getting
some points, too.

At some point you will need to PAY an attorney to put together a
deal. When you are paying they will return your calls.
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Old 07-17-2015, 10:08 PM   #7
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I have to agree with Rik on this one, especially if this is your first feature film.

It can be tough to agree to slice up your baby like this. You're getting the potential opportunity to get your foot in the door with named talent in your film.

Couple that with the fact that most films don't see a profit, the downside isn't as big as you'd imagine.

If the movie becomes the next Paranormal Activity, you should still celebrate as you now have a career.

I'd also add in that you'd want performance/milestone clauses in the agreement so you're not giving away your film for no benefit.
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Old 07-17-2015, 10:21 PM   #8
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Quote:
Originally Posted by directorik View Post
The actors
whose names made the crowdfunding possible should be getting
some points, too.
This is one of the first thoughts that I had.. 50% for referring the actor but 0% to the actual actor themselves. Seemed really strange to me. I mean they are just a producer not a slave owner right ?

The other thought that I had was an agent or manager receives typically like. 15% or 20% I think. That seems like a more reasonable figure to me, and that seems fair. Better than 50% for someone that hasn't done any work and isn't risking anything.

It's fantastic to have a budget and to be able to make a feature length film with a known actor - it makes it a film people will actually see!

If that's what it takes then I would agree to 50% but I don't think I'd start out offering that high of a number. It gives you very little room to negotiate - what if they come back with something even higher? As simply as starting out with 35% maybe you will end up settling on 50.

Just food for thought but like I opened my first post here with - I am in no way qualified or experienced in these matters.
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Old 07-17-2015, 11:56 PM   #9
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Quote:
Originally Posted by JetMonkey View Post
I brought the project (script, production company, etc.)
Reading through it looks like it has been assumed you are a producer on this as well.... but I wanted clarification on that as several roles could be bringing the things you mentioned to the table.

Secondly you are not talking about percentages of the initial above the line budget here, correct? Because if you are it's way off.
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Old 07-18-2015, 12:03 AM   #10
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Quote:
Secondly you are not talking about percentages of the initial above the line budget here, correct? Because if you are it's way off.
Quote:
Is 50/50 fair for the profits of the film?
If it's including a percentage of the budget, it's way off.
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Old 07-18-2015, 12:32 AM   #11
directorik
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I made a (perhaps) incorrect assumption that JetMonkey didn't
mean 50% of any profits earned. I assumed that the 50/50 split
question was the "producers gross" which is usually about 20/25%
of the total gross

No producer should ever take 100% of the profits. No two producers
should ever split 100% of the profits.
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Old 07-18-2015, 09:29 PM   #12
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Yes, I men't 50/50 of the "producer's profits". Sorry if I wasn't clear on that. Even though this is a low budget indie, points still can come in play for actors? Whatever shortage of funds don't get raised by the campaign, me and producer 2 should go 1/2 on the rest. But as the owner of the production company, what percentage does that weigh? Or does it?

I also would prefer to self distribute if I can. Something tells me I better hire an entertainment lawyer as soon as I can.

Thanks,guys for all the responses.
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Old 07-19-2015, 01:49 AM   #13
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Well this explains why i was so taken aback
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Old 07-19-2015, 03:44 PM   #14
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Quote:
"producer's profits"
That's usually called Producers Nett.

Quote:
points still can come in play for actors?
Yep, actors, crew etc.

Quote:
Whatever shortage of funds don't get raised by the campaign, me and producer 2 should go 1/2 on the rest
That'll depend on your agreement.

Quote:
But as the owner of the production company, what percentage does that weigh? Or does it?
You'll need to explain this question so it's clearer what you're asking.
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Old 07-20-2015, 06:13 PM   #15
JetMonkey
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Forgive me for my inexperience. I've only made the transition to producing my own projects for the past couple years. I've done 50k short films and knowledge with that level. But this will be my first full feature at a much larger budget and am now dealing with managers, agents, memos and agreements. So I thank you all for your helpful input.

But in all honesty, if you guys were in my position, what would you do? How who you breakdown the percentage spread for me (owner of the prod co. And rights to the film) and the second producer who's bringing the talent that may get us the funding. What would've a fair percentage or points to give the talent who's perhaps making the film possible? And what exactly is a "point" so I don't screw that up, too. If I do my own distribution, does that change the percentage/point game?

Thanks again, everyone. Next time any of you are in AZ, lunch is on me!
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