A producer primarily uses a bank-financing cash flow to fund films and one usual condition is pre-sale licenses in one or more international territories. Only films with A list talent easily attract international pre-sales commitment so the relationship with distributors is essential. The producer should work with distributors to assure both the story and the cast are top notch.

License Documentation & FundingAs part of the final production stage the produce must update the financing plans with actuals such as presales,  taxes, equity,  credits and other sources of funding.

Pre-sale license usually advance producer 10-20% of the license fee when signing the agreement and guarantee to remit the balance when they are delivered the finished product.

Presales are usually closed 6 months before a film goes into production so by the time production begins the teams should have the same vision.

License Income may come from 2 sources, 1) advances and minimum guarantee or 2) profit participation.

Minimum Guarantee performs as a payment binder to the agreement and is paid in instalments.  Its payment is occurs upon the completion of the film or when the producer sends certain completed elements of the film as per the agreement. The details and especially the dates of delivery should be include in the deal memos to prevent delays and misunderstandings about when it will be paid.

Allocation of Gross Receipts

Distribution frees are paid on first receipt, direct distribution fees are recouped next and then the minimum guarantee. The producers gets a share of the remaining profits.

Territory  Differences

Territory earnings are not just about size and population but also the sophistication of the media. The most effective way to measure a territories financial potential is by examining and comparing the box office with the  four other windows of distributions.