• Disclaimer: Legal advice is not binding, consulting an attorney is always recommended.

What are points?

When people talk of getting "points" on a movie what do they mean? A percentage of the production budget? A percentage of producer's and /or share of gross sales? Net sales?
Points is just another way of saying percentage -- the exact nature of the percentage is why people have agents and lawyers.

They can be anything your agent can negotiate -- but points are always part of the back end deal, never part of the pre-production deal.

Sometimes a key member of the team, an actor, the writer, the producer, the director will decide to take points on the back-end rather than a better up front deal, if they believe the film is going to do significant business.

So yes to everything you said, except the part about it being part of the production budget.