The trick with producing…

…is to spend less money than you’ll earn!

My visit to the Cannes Film Festival last year taught me that below the line is where I want to be. For the forseeable future.

I read a table of figures in the Hollywood Reporter that listed the going rates for selling all rights for movies in non-US markets in 2005-06. Here’s a excerpt:

Going rate for all rights in non US-markets in $000 for a film budgeted at $3 million
Hollywood Reporter, May 2006

France 160
Germany/Austria 300
Greece 30
Italy 250
Netherlands 80
Portugal 40
Scandanavia 225
Spain 150
UK 200
Europe total 1435
Australia/New Zealand 75
Hong Kong 25
Indonesia 30
Japan 300
Malaysia 25
Philippines 35
Singapore 30
South Korea 275
Taiwan 100
Asia/Pacific Rim total 895
Argentina/Paraguay/Uruguay 40
Bolivia/Ecuador/Peru 20
Brazil 100
Chile 25
Colombia 20
Mexico 100
Venezuela 20
Latin America total 325
Czech Republic/Slovakia 50
Former Yugoslavia 15
Hungary 60
Poland 75
Russia 175
Eastern Europe total 375
China 40
India 40
Israel 15
Middle East 20
Pakistan 10
South Africa 30
Turkey 60
Others total 215
All non-US markets 3245

For example, if you have a movie that had a budget of $3 million, then selling the distribution rights in the UK would get you an average of $200,000. If you sold it to every country in Western Europe, you’d get $1.4m. Eastern Europe brings in $375,000. China pays on average $40,000 for distribution rights! This adds up to $3,245,000 for all non-US rights.

Not very much.

The US rights usally get you four to five times as much as the UK rights. That means another $900K on top. So if you get US rights and sell rights to half of the world, you’d get £2.5 million in total. Selling the rights to half the world is the most you can reasonably expect. Then you need to factor in your sales agent (aka producer’s rep). They charge 15%-25% to close the deals at film markets like Cannes. It also takes a long time for this money to come in as deals are done. You get your first money 6 months into the process, as the major countries are sold, your income slowly falls to nothing for another two years.

But what are you selling for your $200,000 UK rights? If you are a new producer without much clout, you are selling everything. The UK distributor can show it in as many cinemas as they like, press as many DVDs as they want and get whatever they can for cable, satellite and TV showings. You get none of that. They get to exploit your film for seven to fifteen years for that one-off fee of $200,000!

These are the figures for average deals for new producers. I suppose the trick is to have an above average film – and be a producer with more experience and clout! That’s why I like being a line item in a budget that is purely based on a weekly rate and number of weeks worked…

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