Preselling, Letters of Intent, and Making Films with Other People's Money...

[jmac5000]

Hello,

Wondering what yur experiences with preselling based on a sucessful DVD distro deal were. Also, have any of you had involvement with Distributors signing a letter of intent to distribute your next pic, as a means to more easily pry cash from investors fingers? And lastly, what were your feelings on this process. Did the letter of intent work? Can one presell a flick based on a good script and a profitable worldwide distro deal? Am I living in a pipe-dream, or does this sound feasible for a second feature project...

Thanks!!!

 

[directorik]

have any of you had involvement with Distributors signing a letter of intent to distribute your next pic, as a means to more easily pry cash from investors fingers?

This is money in the bank - almost. Is the LOI an agreement to pay upon completion? Or an agreement to look at the movie?

If you can get a distributor to agree to pay you, in writing, $10,000 (for example) upon delivery of your film, then you have a sure ten large to spend.

Without a track record of successful DTV features under your belt, most distributors won't be interested in offering that kind of deal.

A distributor who agrees to look at your final product isn't considered a "pre-sale" and few investors will take it seriously.

Am I living in a pipe-dream, or does this sound feasible for a second feature project...

Was your first project distributed?
Did it return a profit for the distributor and/or investors?

If yes; then you have a track record. An LOI from your current distributor may work in your favor regarding investors.

If no; why hasn't your first project been distributed?

 

[jmac5000]

Cool. I am actually trying to kill two birds with one stone. I have a completed film that I will be selling at AFM. It's a high-quality dvcam horror film that I've spend next to nothing on and it looks and sounds like a $500k film. Based on speaking with several (3) sales agents, I will almost definitely make enough to pay back my distributors and my actors. The rest of the deferrals will be hard to pay back, but I will be presenting my final budget to reflect HARD numbers only, for example: I made it for $35k and it sold for $50k.

That said, I have another horror script that I'd like to pre-sell, possibly to the same distributors who pick up Bloodshed (assuming that this is probable). So, with what you've said, I will basically be trying to get a deal that says:

[Distributor] will pay [Producer] $100k plus 40% revenue sharing minus expenses incurred by distributor to be capped at $30k.

That way, I can use that deal to find investors, then even if I use up all of the $100k, I still have back-end coming to me (if there IS a back end!). This is obviously a fairly arbitrary statement, but does it sould legit? More so, does it sound like something that actually happens?

Thanks!

Jim

 

[mikeymoves]

It is all about how profits are defined.

[Distributor] will pay [Producer] $100k plus 40% revenue sharing minus expenses incurred by distributor to be capped at $30k.

This statement is too broad to give any indication as to whether or not you will received a dime! You could get that deal and have the producer's share in net profits be defined as total money after all deferrals, bank loand, distribution costs (as high as 50% in some cases) advances paid against the gross, gross sharing participants, etc. Get a good entertainment lawyer/producer's rep to help navigate this myriad field of money leeches.