How To Get A Minimum Guarantee For Your Independent Film

So you’ve just completed your film, and you want to sell it.  Let’s say it is a horror film, and you’re super proud of it.  Everyone is telling you, go for a big minimum guarantee. And the first question you have is, “What the heck is a minimum guarantee?”

Often referred to as an MG, a minimum guarantee is basically a payment for your film against the profits.  Meaning 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 one?  And how much will a distributor pay me?”  Those are both great questions.  To start with the bad news, MGs used to be a lot 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 VOD.

That said, even back then, there was a stigma with MGs, and it was this: Most likely, the minimum guarantee was all you would ever make from your film. So it better be big. These days, unless you have a film with the A-list, sellable cast, the odds of a big payday are slim. If you’re fortunate enough to get an MG offer on your film, it will probably only be a few thousand.  And anything above 5 figures is scarce.

Heck, even the films getting million-dollar payouts probably cost $10-15 million to make.  So it’s probably not a total win for those filmmakers either. And that’s always the conundrum.

Don’t Just Focus On Your MG

The bottom line is, getting an MG should not be the deciding factor in signing with a distributor or sales agent. And here’s why.  First off, it’s very tough these days 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.

The decision should come from the reputation of the sales agents and how you personally 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 on a film 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 around, and come back if you don’t get that.”  He came back about one year later. By that time, 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.

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ARTICLE BY Tom Malloy

Tom Malloy is a film producer, actor, and writer. Over the course of his career, he has raised over twenty-five million dollars to produce, and distribute multiple feature films. If you're ready to "level up" your film producing, make sure to check out Movie Plan Pro. The video training and downloadable film business plan template will provide you with the same tools Malloy uses when approaching prospective film investors.
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