We’ve been having an ongoing discussion in the FS Forums about first dollar deals – basically one of our members was offered a few options for a deal off the back of AFM on his completed film, and it’s brought up some interesting questions.
First of all, what is a first dollar deal (aka producers corridor)? In simple terms, it means that instead of the traditional deal structure where a sales agent takes their commission (typically 20%-25%) ‘off the top’ of every sale they secure until they recoup their marketing costs (typically in the $25K-$50K range), this alternative deal structure can look like this…
Sales agent and producer split revenue 50/50 up to a certain threshold that covers their expenses (ex: $25K-$50K) and then after that, they go to the usual 75/25 or 80/20 scenario.
This has obvious benefits to the producer- most notably….you get paid sooner rather than later!
One of the biggest drawbacks to the traditional ‘off the top’ deal structures is that filmmakers have to wait months or years before they start seeing any money from sales agents because the deals they signed entitle the sales agent to keep all the money until they recoup their agreed upon marketing costs.
Now before you get TOO excited I want to emphasize that first dollar deals aren’t always available.
In fact, I only see them offered about 20% of the time…..but it doesn’t mean you can’t ask for it. Offer it as an alternative and see if the sales agent is game.
I was able to do this recently with a client’s film.where originally standard deal terms were presented to us, but we countered with the corridor option and they agreed because they really wanted the film. And the best part is the client saw her first monies within 6 months….yes, record timing! (she was so excited she took a picture of the check and emailed it to me!)
So the more in demand your film is, the more leverage you’ll have to negotiate a deal like this.
Have you been able to secure a corridor deal for yourself and how did it work out for you? (if you’re an FS member, let us know in the forums!)