Quiz 3

Pay or Play Contract

"when everyone wants to be pay or play what they really mean they want no conditions to their deal so that the money will be owed whether or not the movie actually happens"

Pay and Play

A contractual commitment from a studio or financing company to not only pay the talent (actor, producer, director) but to actually produce the picture and use their services. This is important for actors who have developed a script, thus they can't be fired off it. Not very common

shell corporation

A corporation that is formed with no real assists or on going operations. Most films are made under "single purpose companies" that are set up for the production of that one film, then they are dissolved after the film. This is to assure that the bank will have a first priority claim against all of the assets of the newly formed company .

Pay or Play Contracts

It is when you guarantee to pay an actor, director, or other participant's contract fee if, through no fault of their own, the person is released from the contract. It is known informally as a "pay-or-play" contract .

Soft Money

Another form of soft money is barter and it's often overlooked.

Pre Sale

Bridge Financing is a loan made to a production prior to its primary production facility closing with another recognized lender. Without a Bridge Loan, and without cash flow, many independent producers risk losing actors and other key "elements" while waiting for their main bank loan to close. Bridge loans can help keep productions from falling apart.

Distribution Guarantee

Closely related to the negative pick-up arrangement is the distribution guaranteeagreement. In this case, the distributor agrees to purchase the completed film's full distribution rights in exchange for a fee and an agreed-upon royalty or gross participation amount.

Soft Money

Crowd funding websites such as Kickstarter.com that facilitate fundraising campaigns by soliciting donors who want to help artists is a good example but because you get the money it actually turns into to hard money.

Soft Money

Foreign pre-sales is another soft money avenue, but it requires the hiring of an experienced sales agent who knows how to structure such deals.

Nontheatrical Revenue

Income from non‐traditional sources, largest being airlines, then military bases, prisons, cruise ships, oil companies, hospitals and schools.

Escrow Account

Money that is placed with a third party, usually a bank, until some occurrence takes place, or not. If that occurrence takes place, then the money is release to the producer.

Pre Sale Funding

Pre-sales agreements are pre-arranged and executed contracts made with distributors before the film is produced. These agreements are based on the strength of the project's marketability and sales potential in each given territory. A distributor will generate a value for your project given the script, the attached talent, and crew, as well as the marketing approach, and then enable you to take out a bank loan using the pre-sales deal as collateral. Pre-sales can also result in direct payment (at a discounted rate) from the buyer themselves.

Pre Sale

Pre-sales investments require that the producer pay back the bank its loaned capital before profiting on their respective upside.

Reserved Rights

Rights that are held back or retained. A producer may want to not grant certain rights to the distributor or financing entity (live stage, radio, theme park mini ‐series, publishing).

First Dollar

The first money that a film generates following its release. Ie the first money received by the distributor. Actors who have first dollar gross means that they get some percentage of every $8 that someone pays to see a film. This is before distribution fees or expenses .

Pre Sale Financing

The funding of a film through pre‐selling rights or international territories prior to completion, or even the start of a film. The party it is sold told will issue an 'bankable' contract which the producer could borrow against from a bank.

Soft Money

The obvious soft money options are tax credit or tax incentive programs offered by select states, which allow filmmakers to recoup a percentage of production costs if enough money is spent and enough local residents are employed within the state offering the program.

Escrow Account

The production money for the budget is raised and put into a secured bank account for the safety of the investors. It is blocked escrow account and usually has elements attached to be used such as pre production , or production amounts.

due diligence

This is the process of checking everything out and making sure everyone and everything is on the level. What are the prior fees of the ATL talent, who owns the copyright, are their any shady characters involved .

Price Tiering

Tier Pricing is a way to encourage shoppers to buy larger quantities of a product by applying discounts based on the quantity ordered. These discounts may be "tiered" so that they increase as the order amount is raised. KonaKart supports the definition of actual tier prices as well as percentage discounts.

Negative Pick Up

When a film is made independently and is then sold to a studio for distribution. The film may be finished or a work in progress.

Pre Sale

With partial equity raised you are then able to procure a loan from a bank or a private lender on the unsold territories of the film (and additional elements of collateral such as the intellectual property "IP" or corporate guarantees). Gap financing is only available when other elements have been assembled and there is adequate security for the investor to "bridge" against.

Producers Rep

a Producer's rep is a mix between a PMD and an executive producer. A Producer's Rep takes on a lot of the business development jobs for a film. We wear a lot of hats. Most often we'll connect filmmakers with completed projects to sales agents and negotiate the best possible deal.

shell corporation

a corporation without active business operations or significant assets. These types of corporations are not all necessarily illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public

Soft Money

soft money can also be used in different combinations of countries with the same premise.

Syndication

the sale or licensing of material for publication or broadcasting by a number of television stations, periodicals, etc

Ancillary markets for distribution

this refers to film licensing revenue and distribution exploitation possibilities with secondary markets. In the GS business, this can mean almost all markets besides the GS theatrical market. is a taller AR than those established for the DCI Specification