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Old 11-19-2010, 10:24 PM   #1
Juno Styles
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Default Who pays for P&A on movies released theatrically?

do distribution companies typically pay for the P&A for theatrical releases and make their money back in backend royalties plus interest or is this something that whoever (ie: production company, investors of the movie, etc) is footing the bill for the production budget would pay as well?
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Old 11-20-2010, 12:12 AM   #2
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Default Re: Who pays for P&A on movies released theatrically?

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Originally Posted by Juno Styles View Post
do distribution companies typically pay for the P&A for theatrical releases and make their money back in backend royalties plus interest or is this something that whoever (ie: production company, investors of the movie, etc) is footing the bill for the production budget would pay as well?
Every movie is different. Distributors most often foot the bill for P&A (because the costs are so high) and recoup their expenses out of the movie's adjusted gross before they pay any of the profit participants (including production companies and producers). But there are situations where a production company with the resources to do so will pay a portion of the P&A on a film in order to trigger their profit participation at an earlier point/lower threshold than it would otherwise be paid if the distributor had assumed all those costs itself.

P&A is not part of the production budget. The production budget will often have money allotted for dailies, the answer print, etc., and a unit publicist to work on the EPK and other associated content that will be used in advertising and promotional materials... but P&A - for all intents and purposes - is a distribution expense, not a production expense (and therefore not a part of the production budget).
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Old 11-20-2010, 12:46 AM   #3
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Default Re: Who pays for P&A on movies released theatrically?

thanks SoCalScribe, so typically in independent films, when putting a film together, a producer will seek financing from an independent source or investors for just the production budget, then focus on selling the film to a distributor and negotiating points on the backend for himself and investors?
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Old 11-20-2010, 01:10 AM   #4
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Default Re: Who pays for P&A on movies released theatrically?

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thanks SoCalScribe, so typically in independent films, when putting a film together, a producer will seek financing from an independent source or investors for just the production budget, then focus on selling the film to a distributor and negotiating points on the backend for himself and investors?
An independent producer's job is typically to find financing and distribution for the project. Whether through production companies or investors, the independent producer seeks to secure money to develop and produce the film, and distribution to pay for P&A and release the film. And yes, when a financier comes on board, it becomes their project (the person cutting the checks calls the shots), and the producer - at that point - negotiates his compensation (fixed and contingent) to be paid by that financier since he is now an employee rather than an employer.
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Old 11-20-2010, 09:02 AM   #5
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Default Re: Who pays for P&A on movies released theatrically?

Don't forget about service deals which used to be considered a vanity strategy but has become an option for some producers that want more control of the distribtuion process.
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Old 11-20-2010, 01:15 PM   #6
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Default Re: Who pays for P&A on movies released theatrically?

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Don't forget about service deals which used to be considered a vanity strategy but has become an option for some producers that want more control of the distribtuion process.
The road to production and distribution is a very complex process. There are all kinds of different deals out there and each film is different. Depending on the producers, the companies, and the distributors in question, and independent producer's authority and level of responsibility can range anywhere from handing off the project to a company and just collecting a fee... to being intimately involved in every decision from soundtrack and credits determination, to which theaters in which territories will get a print.

Like most things in this industry, the process is often situation-specific.
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Old 11-20-2010, 01:42 PM   #7
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Default Re: Who pays for P&A on movies released theatrically?

what is a service deal? just an agreement that gets the producer paid more money for doing additional tasks as mentioned? (overseeing soundtrack, etc)
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Old 11-20-2010, 02:13 PM   #8
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Default Re: Who pays for P&A on movies released theatrically?

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what is a service deal? just an agreement that gets the producer paid more money for doing additional tasks as mentioned? (overseeing soundtrack, etc)
Producers put up P&A and use distributor just to book theaters.
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Old 11-20-2010, 04:43 PM   #9
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Default Re: Who pays for P&A on movies released theatrically?

THE COLLECTOR was a service deal. Originally, Dimension had it, but didn't want to pay to distribute it, so the producers got permission to look else-where, and ended up paying Ridell to distribute the film. The kind of deal would be a last option to get a theatrical release if you don't want to four-wall it yourself.

Some (rare) indie producers have relationships in some small territories and can get a few screens. Henry Jaglom does this, he even makes his own billboards.
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Old 11-21-2010, 12:02 AM   #10
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Default Re: Who pays for P&A on movies released theatrically?

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THE COLLECTOR was a service deal. Originally, Dimension had it, but didn't want to pay to distribute it, so the producers got permission to look else-where, and ended up paying Ridell to distribute the film. The kind of deal would be a last option to get a theatrical release if you don't want to four-wall it yourself.

Some (rare) indie producers have relationships in some small territories and can get a few screens. Henry Jaglom does this, he even makes his own billboards.

There's a thread in 2A about this...Dimension sold the film to Mickey Lidell...he bought it outright and Freestyle released it...Don't know if it was a service deal though.
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