What’s a Film Finder’s Fee Agreement in a Film Deal?
Screenwriters work hard to produce the screenplays that will ultimately lead to the production of a feature film or movie. Filmmakers work hard to produce those films. Distributors work hard to get the films in front of the intended audiences. However, this process of a film making its way from written screenplay to production. And distribution rarely occurs without some hiccups. Producers almost never have the funds necessary to produce a feature film. And therefore they hire finders to help them secure the financing necessary to get the film off the ground. This results in a film finder’s fee agreement that will be entered between the film producer and the finder.
What is a Film Finder’s Fee Agreement?
The film finder’s fee agreement represents a contracted agreement. Made between the film producer and the individual responsible for finding and securing adequate financing. To get the film project out of the early stages of development.
And into a point in which production can take place. The film finder’s fee agreement is a unique contract that is drafted in “short form”. And generally consists of just a couple pages that outline the specific legal clauses of the contract.
A film finder’s fee agreement will generally be engaged between a professional that has contacts in the investment world. And will be able to secure the specified funding required for production of the film.
In exchange for the work provided by the finder, they will generally be paid a percentage of the total funds that are secured through investors, banks, and other forms of financing.
How Much is the Film Finder’s Fee?
The amount that is paid to the finder will vary. The film finder’s fee agreement will specify the actual terms of the agreement between the producer and the film finder. But the rate is typically somewhere between 3% and 5% of the total amount of funds that are secured.
Sometimes a finder’s fee agreement will specify a percentage that increases for larger investments and then tapers off. Other times the finder’s fee will be a set percentage for say between $100K and $500K. Another percentage for $500K to $1M.
And say another for $1M to $2M. Again, it all really just depends on the terms set forth in the original agreement between the two parties.
What Happens if the Finder Doesn’t Get Funding?
The film finder’s fee agreement will also specify what happens. In the event that there is not adequate funding secured by the finder. Or that the finder does not get the funding soon enough.
These details are going to be outlined clearly in the original contract. And generally stipulate that the producer will have the right to void a contract under certain circumstances of poor or inadequate performance. Or that the percentages may be reduced.
Ultimately, the details of the film finder’s fee agreement are determined between the two parties upfront and before they sign.
Once this legal document is signed it represents a binding contract between the film financing finder and the producer or other party that enters the agreement with them.