So you've just completed your film and want to sell it.
Let's say it is a horror film, and you're super proud.
Many people tell you to hold off on distribution deals unless you get a significant minimum guarantee.
And your first question is, “What the heck is a minimum guarantee?”
Often called an MG, a minimum guarantee is a payment for your film against the profits. A distributor or sales agent pays you X amount of dollars (usually in the form of an upfront cash advance).
Then they eventually recoup this payment from future revenues on the picture.
How To Get A Minimum Guarantee
Now you think, “How do I get an MG?” And how much will a distributor pay me?”
Those are both great questions.
To start with the bad news, MGs used to be much higher. In the Blockbuster Video (DVD) days, minimum guarantees could be several million dollars for even mediocre horror films with C list cast.
But that all changed with the evolution of video-on-demand.
Unless you have a movie with an A-list, sellable cast, the odds of a big payday are slim these days.
If you're fortunate enough to get an MG offer on your film, it will probably only be a few thousand. And anything above five figures is scarce.
And even the movie getting million-dollar payouts probably cost $10-15 million to make. So it's perhaps not a total win for those filmmakers either.
And that's always the problem.
The bottom line is that getting an MG should not be the deciding factor in signing with a distributor or sales agent.
And here's why.
First, it's very tough for sales agents to predict who will buy films. If they commit a minimum guarantee of $100k, they MUST be sure the film will make more than that because legitimate expenses are involved.
And what if the film doesn't make back the money paid in an MG?
One too many of those deals, and the sales agent is out of business.
Don't Just Focus On Your MG
The decision should come from the reputation of the sales agents and how you feel they will handle your film.
Do they return your emails promptly? Can you get them on the phone? What do other Producers say about them as a company?
These should be questions you're asking yourself and also asking others.
Don't limit your film by saying, “I will only accept a $100k minimum guarantee.”
A horror filmmaker approached me once in a movie where he said those exact words. Our offer was more in the 10k range to show we had skin in the game.
I told him, “No problem. Shop it, and come back if you don't get that.”
He came back about one year later.
The film was older, less fresh, and a harder sell.
So be pragmatic and realistic about your goals. Remove the thought that you must get an MG. My most successful business relationships have come with distributors who paid $0 upfront but worked hard for the film. And if you're interested in learning more about film distribution, check out my film distribution training.
Frequent Questions About Minimum Guarantees
Here are some commonly asked questions that filmmakers have about minimum guarantees in the film industry:
What is a Minimum Guarantee and Why Does It Matter to Me as a Filmmaker?
You might be wondering, “What's a minimum guarantee?” In the world of film distribution, a minimum guarantee, or MG, is an upfront payment that a distributor or sales agent gives you against the future profits of your film. It's important because it represents immediate cash for your project, but don't forget, the distributor recoups this from your film’s later earnings.
How Can I Secure a Minimum Guarantee for My Film?
Now, you're probably asking, “How do I get an MG for my movie?” Let's face it, it's tougher these days, especially with the rise of streaming services. If your film has an A-list cast, your chances are better, but for many indie films, MGs are modest. Remember, the golden days of hefty MGs are largely behind us.
Are Big Minimum Guarantees Still a Thing in Today’s Market?
You might be curious, “Do big MGs still exist?” Once upon a time, in the DVD heyday, yes. But now, unless your film is a major draw, big MGs are rare. It's a new era, and as a filmmaker, you need to adapt to these changes.
Should I Base My Distribution Decision Solely on the MG?
You might think, “Should I only go with a distributor who offers a good MG?” My advice? Look beyond just the MG. Consider how the distributor treats you, their reputation, and their game plan for your film. These factors can make a huge difference in the long run.
What If I Can’t Get a High Minimum Guarantee?
If you're facing low MG offers, don't lose heart. Ask yourself, “What else can this distributor bring to the table?” Sometimes, a distributor who offers less upfront but has a solid marketing strategy and a proven track record can be far more beneficial for your film’s success.
Where Can I Learn More About Film Distribution?
You're probably thinking, “Where can I get more info on this?” I've got you covered. My film distribution training is a great resource. It's designed to give you the inside track on navigating this complex industry. Check it out for detailed insights and strategies.
Glossary
This glossary provides a quick reference to some of the key terms related to film distribution and the filmmaking process, as discussed in the transcripts.
Minimum Guarantee (MG): An upfront payment made by a distributor or sales agent to a filmmaker against future profits of the film. This payment is later recouped from the film's earnings.
Distribution: The process of making a film available to the public, typically through cinemas, home video, or digital platforms.
Sales Agent: A professional who represents and sells a film to distributors, negotiating deals on behalf of the filmmaker.
Video-on-Demand (VOD): A digital distribution method that allows users to access films and TV shows without a traditional, scheduled broadcast.
A-list Cast: Refers to a group of high-profile and highly bankable actors, often known for their box office draw.
Film Distribution Training: Educational resources or programs that provide knowledge and skills related to distributing films effectively in the market.
Blockbuster Video (DVD) Days: Refers to the era when physical DVD rentals and sales, particularly through large chains like Blockbuster, were a dominant form of movie distribution.
Indie Films: Independent films that are typically produced outside the major film studio system.
Marketing Strategy: A comprehensive plan designed to promote and sell a film, involving various tactics like advertising, screenings, and media outreach.
Film's Success: The achievement of a film in terms of financial profitability, audience reception, and critical acclaim.
