Vocabulary: Producing

Ok so through out the last year or so I have heard a bunch of terms that are not in a normal person's dialog and was lost when I initially heard them. Once explained they made sense, now I will share some of these with you. Also, I hope to be able to do this more and more.

"Above the Line" : Is a term that refers to a line in the physical budget of a film in which all the people above that line are making points(or a %) on the film in addition to the pay rate they receive. All of the producers, the director, and major actor's are found above the line.

"Below the Line" : See above the line and this is everybody else on the film. The Gaffers, the assistant Directors, the Best boy, key grips, make-up, ect. All the 9 to 5 people so-to-speak who simply get "paid".

"Signatory" : A person(usually a producer) who is responsible legally for all of the Union contracts that are signed for a film. A SAG signatory is the person who is liable in the Screen Actors Guild contract that is signed with the film for example. The directors union, down to the teamsters all have to have this person in order for them to work on a project. Which is why it is usually the supervising producer who is the signatory.

"Letter of Interest, Intent/ aka Promissory Note" : This is a tough one because like all good legal speak in contracts it is subject to interpretation. "Letter of Intent" is the easy one to explain because it has been the standard for a long time. It has been said to me that "Letters of Interest" are now replacing these because of so many liability suits that have been filed. Either way the point of an "L.O.I." is that you have a physical document showing a persons intent to work on you project.

EXAMPLE: You have an actor friend who has some small notoriety but has not blown up yet. Your a producer of indie films and know that this actor is perfect for your next role. So you get the actor to sign an L.O.I. and now you can go to investors and say that the actor(one of the only times it is appropriate to name drop) has signed an L.O.I. Hopefully this is enough to convince them to give you money. Especially if the actors last project does better than expected and now they are a name.

Promissory notes are something I got from real estate which refers to intent to sell. Intent to work.
This is the Wikipedia definition.
A promissory note, referred to as a note payable in accounting, or commonly as just a "note", is a negotiable instrument, wherein one party (the maker or issuer) makes an unconditional promise in writing to pay a sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. They differ from IOUs in that they contain a specific promise to pay, rather than simply acknowledging that a debt exists. In common speech, other terms, such as "loan," "loan agreement," and "loan contract" may be used interchangeably with "promissory note" but these terms do not have the same legal meaning. Whereas a promissory note is evidence of a loan, it is not the loan contract, which would contain all the terms and conditions of the loan agreement.^[1]

Guarantee (filmmaking)

From Wikipedia, the free encyclopedia

(Redirected from Pay or play contract)

Not to be confused with Pay to Play.

In filmmaking, a guarantee is a term of an actor or director's contract that guarantees remuneration if, through no fault of their own, the artist is released from the contract. Such an arrangement is known informally as a “play-or-pay” contract.

Many stars insist on guarantees in their contract due to the major time commitment agreeing to appear in a film can mean. For example, Kurt Russell's decision to appear in the film Soldier, for which he was paid $15 million, was a total commitment of 18 months, during which time he was not able to appear in another film. If the film were cancelled, or if he were replaced (but not if he withdrew of his own accord), Russell would be paid $15 million, or a large part of that fee, to compensate him for clearing his schedule.

Studios are reluctant to agree to guarantees but accept them as part of the deal for signing major talent. They also have the advantage of enabling a studio to simply remove a player under such a contract with few legal complications.

That last one I have heard a bunch but had to look up myself.

That's it for now.

Notes from the Budget: Producing

For the last few months I have been endeavoring to get a film made that has a current budget of $15 Million. One of my big problems is that this is not enough money, people are actually afraid to invest in the project because the current budget is too low.

When me and my team sat down and looked at it we thought that it should be around $40-$45 million dollars. The producer/writer who ones the rights to the project whom we would be partnering with has had a very hard time with this. He keeps saying to me "I just don't think it will cost this much..." and then we go down a list of ways that we can save money above the line . Which is fine, I don't have a problem with saving money on a project.

The issue is that in him having an issue with it he is making it harder for me to do my job and negotiate with the people who actually will be signing initial checks.

Because the budget is presenting differently then what I am selling them on because the will not agree to a smaller budget.

This is a hard thing for both the Producer/Writer whom I am working with to grasp because, "I am so used to doing independents that I...". Yes, this is an independent. So yes, he is still working on an independent film. It's just not an art house indie that is going to festivals. This is an indie with a budget and a real plan for distribution.

So through much negotiation I got the Producer to agree that the budget can be modified down much easier than up and that having "too much" money is not a bad thing. It seems that this would be intuitive but he is coming from the point of view that if the numbers are too big it will scare people away. I can understand this but I wholeheartedly disagree. The numbers signify intent. If some investor can't afford the budget then we really should not be talking to them anyway. In my mind either you believe in the project or you don't.

Some indie films are art-house and tailor made for the Lifetime network. Some are made for everybody and belong in 3,000+ theaters. This is the latter, it's one of the human interest character stories that people will love that is a sports movie. It has tons of Oscar potential and is in the boxing genera.

Having gotten through all of that, now we are just negotiating about getting the budget reworked to reflect the numbers we want and we get hit with something else.

The Producer/writer calls me and tells me that he has an offer on the table from a hedge-fund.
They want to give him $6 Million for 50% of the points and then he has to go get another 6 for a locked in budget of $12 mill.

What does all this mean:

That basically for half of the rights on the gross profits from the film(half of the ticket sales, dvd, ect) they will give the Producer/Writer half the budget. Now he still has to come up with the other six million dollars to meet the budget. BUT! He can't get more that six million dollars. Which is really really bizarre to me. It sounds like they are going to screw him out of 50% of the rights to this thing. So now I have told him to take the deal because we can't beat the time frame of comming up with 6 million in less than two weeks. Talking to one of my partners in my company, it was addressed that someone needs to warn the Producer/Writer of this thing that he is getting screwed and how.

That seems to now be my job, but I don't completely feel that he should not take the deal. This producer/writer has been trying to make this movie for 12 years, and has sunk hundreds of thousands of dollars into this project. He need's to count his losses at this point.

But if he takes that deal we are out of it. There was a possibility of us being the second drop and now that is not the case. My two other partners want no part of a second drop on this project if the 6m for 50% deal is signed. I agree, it seems like a really bad deal. Hope to talk to everybody tomorrow and see if this situation can be salvaged.