Magazine article Filmmaker

Points

Magazine article Filmmaker

Points

Article excerpt

SO WHO GETS PAID (AND HOW MUCH) AFTER YOUR MOVIE MAKES A PROFIT? BY ALICIA VAN COUVERING

Most independent films don't make money. We all know that. But what happens when they do? "Backend" is the industry parlance for a profit pool that flows to cast and participating members of a film's production. How, to whom and in what manner it is divvied up can sometimes raise contentious issues between otherwise civil partners.

Before a film has been made, its makers imagine an invisible pool of net profits, that is, the money coming in from sales and overages after the investors have recouped and all the film's debts have been paid off. The investors claim their share - typically 50% - and divide it between themselves, depending on who invested how much and under what terms. (A division that is paid out like this, on the same terms, at the same time, is defined in contracts as "pari passu.") The rest is left for the "creative side" to distribute among producers, director, writer, cast and, to a lesser extent, crew. The definition of those points can vary, and sometimes even the split too. A single entity financing a film might demand more than 50% for the investors' share. A micro-budget filmmaker not paying crew and putting sweat equity in his or her picture might seek to take a larger share of backend for the team. But whatever the producers wind up with, their points are redefined as 100 "net producers points," (or, colloquially, "points").

A point is not always "a point," however. There are other ways to see money off the backend. Vendors and crew can demand deferments, paid out before or immediately after investors recoup. Star talent can demand "corridors," cash that comes to them in some position before or separately from everyone else. Investors can wedge in hefty overhead charges. Sales agents and lawyers take fees across the top of the deal, particularly when they've been asked to defer their expenses. Anyone who actually wants to make some money off your film will figure out a way to do it before cash is distributed in the form of net profits.

But sometimes independent films do pay off.

The now-defunct InDigEnt famously structured all of its productions to give generous points out to all its key crew and cast. Everyone got paid $100 a day and everyone got a point, so to speak. Following the $5 million dollar sale of Tadpole, this structure delivered five-figure checks to many members of the production.

"The InDigEnt model was great in theory," says one below-the-line agent who declined to be named but whose clients often divide their time between high and low-budget films. "But in the end it didn't work." That is, after partner IFC pulled out of the venture, InDigEnt ran out of money and had to shut its doors. "So it's adjusted now," the agent continues about the structure of many low-budget deals. "The rates are a little higher than $100, and points are reserved only for certain positions."

Given "studio accounting," where even blockbuster films have yet to pay a dime to their profit participants, should filmmakers even worry about backend? As more filmmakers drop their budgets to micro levels, the possibility of serious backend revenues rises. Even in today's depressed environment, a good film can be bought for more than its production budget, meaning that backend can be immediate. Micro and low budget films such as Like Crazy, Martha Marcy May Marlene and Another Earth all garnered sizable deals at this year's Sundance Film Festival.

"We just went through a period over the last decade where, in terms of sales, it seemed kind of inconceivable that points actually mattered," says Nicholas Shumaker, one of the producers on Another Earth, But now, as new producers and investors are working in lower-budget films and realizing that large backend payouts are possible, they are bringing a harder-edged, and some would say inappropriate, attitude to films where director, producers, cast and crew are working for peanuts. …

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