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Old 08-25-2017, 12:44 AM   #1
Mr.
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Reasonable percentage of profit for cast & crew? - Creating a Legal Contract

Hi,

Two years ago I began writing on a micro budget feature. The script is now complete and we're currently in pre-production. I'm currently working on making a legal agreement for everyone involved to sign before we start shooting. Since this is a micro budget project, I don't have a lot of money to offer cast & crew, so I decided everybody involved will get a percentage of the (potential) future profit of this film.

We're a tiny cast and crew, around 10 people, but I'm sure more crew members will join us in post production (VFX, sound design & scoring etc.). What's a reasonable percentage to offer everyone involved? I know this is a difficult question with a lot of variables, but I'm not looking for exact numbers, more a general sense of what's reasonable.

Input and thoughts would be greatly appreciated!

All the best!
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Old 08-25-2017, 01:40 AM   #2
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Two years to write one script? xD

If you're not sure how many people will be involved in the production, to begin with, you can't legally write an agreement. What you should do is figure out all the people that will be working in pre and post production to be fair.
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Old 08-25-2017, 03:23 AM   #3
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Another approach is giving points for certain time spent on the project.
This will add up to a certain total amount of points you can treat as shares to divide any gains.
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Old 08-25-2017, 07:21 AM   #4
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What is common is called deferred pay, not points. Points are reserved for producers and some creatives. Deferred pay means they get their rate if the film turns a profit or reaches a certain goal etc. PS. In the biz here in NYC, deferred pay means you work for free. It's often considered an insult to one's intelligence, and a lot of people avoid those jobs.

In other words, are there realistic chances your film will make enough to pay these people? If not, then ask them if they will work for free, or figure out a way to pay a small amount.
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Old 08-25-2017, 07:53 AM   #5
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Quote:
Originally Posted by indietalk View Post
PS. In the biz here in NYC, deferred pay means you work for free. It's often considered an insult to one's intelligence, and a lot of people avoid those jobs.
It's not just NYC. I won't touch deferred payment with a 10' pole, because it's just a crappy way of trying to fool someone into, as you say, working for free.

I work for free for a couple of choice non-profits here in town, and I do that willingly. I cannot afford to do that anywhere else, 'cause I like to, y'know... eat and have air conditioning.
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Old 08-25-2017, 09:41 AM   #6
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Quote:
Originally Posted by Quality View Post
Two years to write one script? xD

If you're not sure how many people will be involved in the production, to begin with, you can't legally write an agreement. What you should do is figure out all the people that will be working in pre and post production to be fair.
Well, it's a long story, it's actually more like 8 month, but I took two years off to learn how to write, I studied the art of screenwriting and during that time I wrote several versions of the story we're now planning to shoot. I didn't turn into Aaron Sorkin overnight, it took a lot of practice to get this script where I wanted! And not that I'm Aaron Sorkin now either, I still have a lot to learn, but somewhere along the line you have to say enough is enough and actually go out and make the film! As Spielberg said "You can't start a movie by having the attitude that the script is finished, because if you think the script is finished, your movie is finished before the first day of shooting."

I get your point though, makes sense.

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Another approach is giving points for certain time spent on the project.
This will add up to a certain total amount of points you can treat as shares to divide any gains.
Sounds like a good idea! I guess everybody signing up for that model will have to accept that the value of their points will be diluted in case more people join the project later on? Like shares?

Do you know of any concrete ways of how to implement this method?

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Originally Posted by indietalk View Post
What is common is called deferred pay, not points. Points are reserved for producers and some creatives. Deferred pay means they get their rate if the film turns a profit or reaches a certain goal etc. PS. In the biz here in NYC, deferred pay means you work for free. It's often considered an insult to one's intelligence, and a lot of people avoid those jobs.

In other words, are there realistic chances your film will make enough to pay these people? If not, then ask them if they will work for free, or figure out a way to pay a small amount.
Are you talking about gross points? I've read that's a common way of distributing profit among the A-listers and producers, those at the top of it all, but considering this is such a small project, don't you think that same system could be applied for everyone involved? Deferred pay sounds horrible. Sounds like a very bad way of showing your appreciation for their help bringing your vision to life.

I wan't show everybody involved how thankful I am for their help, but since I don't have much money left to pay them upfront, I don't know of any other way of doing it then to give them shares, percentage. I want them to feel they're a part of this project, not just helping me.

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Originally Posted by AcousticAl View Post
It's not just NYC. I won't touch deferred payment with a 10' pole, because it's just a crappy way of trying to fool someone into, as you say, working for free.

I work for free for a couple of choice non-profits here in town, and I do that willingly. I cannot afford to do that anywhere else, 'cause I like to, y'know... eat and have air conditioning.
I agree, sounds really bad!
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Old 08-25-2017, 09:56 AM   #7
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You say you want to give shares/percentage. That's what points are. Percentage points. Don't call them shares or the FTC will be after you.

Again. Offering points on a microbudget, of potential profits, means, working for free, with the off chance, like the lottery, they will get paid. I don't see it as a way of thanks.

I think you are going to have a really hard time shelling out points for work, especially if you do not know these people. If you do know them, just be honest. Ask them for help, and let them know you can return the flavor. Maybe someone needs help moving, etc.
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Old 08-25-2017, 09:56 AM   #8
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Quote:
Originally Posted by Quality View Post
Two years to write one script? xD
Why do you start your post with a put down? There is nothing unusual
about taking two years to write a script. And you CAN legally write an
agreement before all the people that will be working have been hired.

Just to be clear; “deferred payment” means the producer will pay later.
Not IF there is a profit. This term is often used incorrectly. Legally, if
“deferred” is used it means all agreed upon monies will be paid and a
date (or payment plan) is set in the agreement.

Profit sharing is different. That means the producer will only pay IF a
profit is made.

Mr. offering a percentage will get very complicated and become a
bookkeeping nightmare in the future. A reasonable percentage for a cast
and crew of 10 people is 6% for lead actors and department heads, 4%
to supporting actors and crew. Since you know more than 10 people will
share in the profits make sure you hold 30% (or so) for pre production
then divvy that up evenly.

Indietalk, and AcousticAL are right in their caution to you about this kind
of payment – any person with a little experience knows they will never
get paid so my advice is to be very open and up front about that.
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Old 08-25-2017, 09:57 AM   #9
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Originally Posted by directorik View Post
Just to be clear; “deferred payment” means the producer will pay later.
Not IF there is a profit. This term is often used incorrectly. Legally, if
“deferred” is used it means all agreed upon monies will be paid and a
date (or payment plan) is set in the agreement.
I said in NYC. Here, it means work for free. I used to work deferred pay jobs, and there was never a check. Ever.
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Old 08-25-2017, 10:00 AM   #10
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Quote:
Originally Posted by indietalk View Post
I said in NYC. Here, it means work for free. I used to work deferred pay jobs, and there was never a check. Ever.
I understand. That term is used incorrectly here in Los Angeles, too.
Take any "deferred pay" contract to any lawyer and they will use
the legal meaning of the term. Yes, it's semantics - until a lawyer
gets involved.
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Old 08-25-2017, 10:03 AM   #11
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Yes the term does suggest later is guaranteed. Should be called Contingent Pay. Contingent upon (defined).
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Old 08-25-2017, 10:10 AM   #12
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Reason may be, not paying people minimum wage, and advertising it, illegal. Reminds me of "intern" jobs I performed, while, not in college.
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Old 08-25-2017, 10:12 AM   #13
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As in: the day rate is $400. We will pay you $50 now and defer the rest
until 90 days after production. I like "contingent" but I understand that
people will still use the incorrect term. We all know that it always means
is we will never see any money - ever.

Aside; I prefer to be asked to work for free and then someday in the future
a check arrives with a little note thanking me for my time and here's a little
something because the movie made a profit. I don't like that carrot dangled
in front of me.
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Old 08-25-2017, 10:14 AM   #14
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Originally Posted by directorik View Post
Aside; I prefer to be asked to work for free and then someday in the future
a check arrives with a little note thanking me for my time and here's a little
something because the movie made a profit. I don't like that carrot dangled
in front of me.
I agree with this. Instead of, "we could all be rich," how about "I need help" and then surprise them with $ if it makes any. Good will.
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Old 08-25-2017, 10:33 AM   #15
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Just to be clear; “deferred payment” means the producer will pay later.
Not IF there is a profit. This term is often used incorrectly. Legally, if
“deferred” is used it means all agreed upon monies will be paid and a
date (or payment plan) is set in the agreement.
I get that, too, and I still refuse to work deferred. I once took a job providing audio post for a 13-episode TV series, and after we'd reached $3500 worth of Net30 invoices, half of which were past-due, I found out it was deferred. He never mentioned that (otherwise the invoices wouldn't have been Net30), but swears I knew that he couldn't pay me until the production company paid him, and that they were awaiting payment from the network. He was also getting ready to shut down and move to another state. It took some yelling and some threats to my personal wellbeing before he paid. That sealed my distaste for deferred payment.

Mr., I also have to ask the other glaring question here. From what you've said about taking time off to learn screenwriting, this sounds like it's a first feature. Is that correct? What do you realistically think is the potential for profits from this film? First efforts rarely break even, much less turn any kind of profit (or even see much incomemat all). This is another reason you need to work out something with your cast and crew up front. If there are points offered for any potential profits, make that a very clear "when and if", but don't rely on that. The honest reality is there's nit much chance of that happening.

Perhaps set up a crowd funding campaign to raise a little capital? If it's a first feature, paying your peeps even a modest honorarium can go a long way.

And don't forget to feed them. Every shoot day, and for each meal time through which you work.
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