Pre-Sales for Filmmaking

Good morning. I’ve enjoyed my return to wordpress and communicating here again.

In case you missed it, I created a post with specific information for film financing. I included 3 videos, all by Sky Moore, and summarized his main points. I learned a ton from summarizing the videos so I have decided to do it again today. Furthermore, the information he provides is practical. I’ve seen far too many videos that fail to provide any tangible directions.

Pre-sale Financing:

Pre-sale financing is how a filmmaker will raise the majority of the money for their project. With a script and an actor attached, you can attend a film market and “Pre-sell” the film. This is often done with the assistance of a sales agent. You may then sell distribution rights to a foreign distributor so that they may acquire the rights to your film once it is done. These distributors may agree to pay you a large amount money, but they will require delivery of the film prior to forking over the dough.

Take the contracts acquired over to the bank. Here you will change out those contracts for a “Notice of Assignment.” Here the distributors agree to pay the bank once the bank delivers the film to them. This new contract will typically override whatever was in the initial distribution agreement. You are now eligible for a sizable loan to budget your film.

But what if the film never reaches completion? For the bank to ensure that it will receive its money, you will need to involve a “Completion Guarantee” company. This company guarantees that the film will either A) get made, all contracts work as planned B) not get made, and the company guarantees the bank that it will receive its money from the loan provided to you.

For a typical film budget – $10 million – you may be able to do pre-sales of 7 million. After taking the contracts to the bank and following the steps above, the bank may provide a 6 million loan. Congratulations, 60% percent of your $10 million dollar budget is now covered.