An Indie Filmmaker’s Guide to Pre-Sale Distribution Agreements
As an independent filmmaker you’ve probably encountered many situations in which you’ve attempted to secure financing for your production ahead of actually scheduling your shoot. Most independent film producers have to take special measures to find and secure adequate financing for the projects they’re in and will do whatever it takes to fully cover the production budget. If you’re thinking about funding your production through a pre-sale and you’ve secured pre-sale distribution agreements or pre-sale financing.
Consider yourself lucky! Not every independent filmmaker will have such luck!
Say you are fortunate enough to secure pre-sale distribution agreements. It’s very important for you to take care in how the agreement is structured. And what’s included to ensure that your rights are protected.
While signing a distribution agreement can get you the cash necessary to cover all or some of your shoot. It’s very important for you to make sure you take the steps to review the agreement. And to get the most important details covered for your own protection.
What are Pre-Sale Distribution Agreements?
Pre-sale financing represents a means of acquiring financing for your production. By entering an agreement with a distributor known as a pre-sale distribution agreement.
This agreement basically states that the distribution company will represent your film when the project has been finalized. And, in return, they might provide funding for you to produce the film.
In fact, the distributor will generally pay out the pre-sale distribution agreement in installments to cover many of the production costs involved. So that you can bring the film to fruition and they can then distribute it and recuperate their investment.
In Advance
Some pre-sale distribution agreements will allow for a set amount of funds to be advanced prior to the distribution and the remainder to be paid out once the film is in the distributor’s hands.
In this case, you might need to secure additional funding in order to produce your project but at least you’ll have some leverage when you go to other financiers or to the bank for a loan.
How Pre-Sale Distribution Agreements Work
Pre-sale distribution agreements basically work off a script or general idea for a film that is pitched to the distributor. The distributor loves the idea and sees the value, so they agree to purchase the film for distribution as soon as it is complete.
In doing so, they may offer a cash advance to help with production. Or they’ll offer their signed agreement. Stating that as soon as the production is complete to the terms of the agreement they will purchase for a set amount.
The pre-sale distribution agreements allow the filmmaker leverage to secure financing that they need to get the project produced. They can take a pre-sale contract with them to other lenders including banks and investors.
And show that they already have a distribution agreement in line. This type of agreement makes other investors more likely to put up funds for their project.
In Summation
Even if you can’t get a pre-sale distribution agreement going, it’s important to take all necessary steps in seeking out financing that will work for your project. The more interest you can gain, the more collateral or leverage you will have with other investors along the way.
A pre-sale contract will generally pay out at least a 20% deposit. Which can provide the necessary funds to move forward with production. Which is a winning strategy for an independent film producer.
