| Finding and Attracting the Right Distributor |
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Page 2 of 2 NegotiationOnce a distributor is interested in your project, he will ask to see your budget and financing plan. If the budget is too low, he will wonder about the likelihood of attracting cast and the quality of the finished film. If the budget is too high, he will think that financing will be too difficult to obtain.Risk, reality… This means it’s important to have a realistic budget and financing plan. Otherwise no distributor is going to waste time negotiating and contracting a deal. Don’t rely on foreign pre-sales to finance your gap – and don’t rely on Telefilm to fully finance your picture. Offer a distributor two financing plans: one scenario with Telefilm Canada and the other without. You have to convince him that your project will get financed and made. Remember that distributors take a risk when they invest in a project at the script stage. They’re gambling that the finished film will be every bit as good as predicted. And they must also take into account the P& A (print & advertising) they will be spending to market the film – plus a cushion - in case the film does not perform as well as expected. This is why most Canadian distributors will assume your television licenses and then pay you slightly less than their value. It can be a startling arrangement for first-time producers, but it’s the way distributors give themselves some assurance that they will see some revenue. The fact is, if the film doesn’t make money theatrically, the distributor won’t earn their fee or recoup their marketing and minimum guarantee. … And flexibility Make sure the amount you’re asking for is realistic – and then, be flexible. A Canadian distributor will typically pay 5% of the production budget as a minimum guarantee (but again it all depends on cast, marketing hook, and budget). Perhaps you didn’t get the minimum guarantee you were hoping for (or needed), but you can still negotiate a good back end or costs off the top deal which will help you pay back your loans quicker.  |
