If you’re trying to get a sales agent or distributor to pick up your indie film, you’ve probably heard the term minimum guarantee, or MG.
When I first heard about MGs 20 years ago, I thought it was exactly what the name implied… A distributor promising a minimum amount of money your film would earn, even if sales didn’t hit that number.
Turns out, that’s not quite what it is.
An MG is really just an advance payment that a sales agent or distributor gives you when they license your film. And understanding how MGs work, and when to take them, is a key step in making smart distribution decisions.
What is a Minimum Guarantee (MG)?
A minimum guarantee is an upfront payment for your film.
Think of it like an advance on future earnings.
The distributor or sales agent gives you a set amount, and then they need to recoup that MG (along with any marketing expenses) before you see another dime.
For example, let’s say you get a $100,000 MG. They pay you that upfront, and then your movie starts earning revenue.
Only after the distributor earns back that $100,000 (plus expenses) will you see additional payments, often called overages.
And here’s the reality—many times, that MG ends up being the only payment you’ll ever get.
The Pros of Taking an MG
There are clear upsides to accepting a minimum guarantee.
- Instant Cash Flow – You get money upfront, which can help cover post-production, festival submissions, or even pay back part of your budget.
- Distributor Buy-In – When a company puts down an MG, it shows they believe in your film. They now have skin in the game and are motivated to make it profitable.
- Potential to Exceed Your Budget – On rare occasions, your MG might even be higher than your production costs. I’ve sold films where the MG was double the budget—that’s a great day for any filmmaker.
If you’re short on cash or need to show investors some immediate return, an MG can be a lifesaver.
The Cons and Common Pitfalls
While MGs can feel like a win, there are downsides to watch out for:
- You Might Only Get Paid Once – Many filmmakers sign for an MG and never see overages.
- It Can Distract You from Better Deals – Chasing the highest MG might cause you to overlook a distributor offering a better revenue split long-term.
- Expenses Matter – A $5,000 MG isn’t as exciting if the company charges high expenses or takes a big percentage of profits after recoupment.
I’ve seen filmmakers pick a company just because they offered a small MG, only to regret it later. Always look at the full deal—splits, expenses, and the company’s reputation—before signing.
How to Approach MGs Like a Pro
If you’re heading into a film market or closing a distribution deal, here’s how to navigate MGs:
- Ask If They Offer MGs – Some distributors do, some don’t. If they say no, ask how they plan to make money for you instead.
- Know the Market – Walking into AFM or Cannes demanding an unrealistic MG for your low-budget horror film will make you look amateur.
- Think Long-Term – Sometimes, a fair revenue split with lower upfront cash will earn you more than a flashy MG that never leads to overages.
Remember, the minimum guarantee is just one piece of the distribution puzzle. The real goal is getting your movie to earn, not just to get a one-time payment.
Final Thoughts
A minimum guarantee can be a great tool if used wisely. It puts cash in your pocket and signals that the distributor believes in your project. But don’t let the excitement of an MG blind you to the bigger picture. Look at the full deal, understand the risks, and always plan for the long-term success of your film.
If you keep that mindset, you’ll avoid the “paid once” trap and set yourself up for smarter, more profitable distribution deals.
