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…