So, you got the movie made. That alone is an incredible achievement—congrats. Now you’ve landed a film distribution agreement. Maybe it came from a sales agent you met at a film market, or someone you connected with through your network. Either way, you're in the game. But before you sign on the dotted line, let’s make sure you don’t get burned.
As someone who owns a sales and distribution company, I’ve seen a lot of contracts. Some are fair, some are sneaky, and some are downright bad. The good news is, there are three main things to focus on that can make or break your deal.
1. Term Length — How Long Are They Keeping Your Film?
This is the first thing I check in a film distribution agreement. Is the term three years? Five? Ten? I’ve even seen contracts where the term is perpetuity. That means they own your movie forever. Please stay away from those.
Here’s what to remember: most films make the majority of their money in the first five years. If someone wants ten years or more, you have to ask yourself—what are they really doing for me after year five? In most cases, the answer is not much.
If you’re offered a long-term contract, it’s not necessarily a dealbreaker. Just know that the back-end years usually don’t move the needle much financially.
2. The Sales Fee Percentage — What Are They Taking?
This is a big one. Most standard deals have a 25% sales fee. That means for every dollar the film earns, they take $0.25, and you get $0.75. That’s pretty fair, and it’s the industry norm.
But I’ve seen all kinds of variations—some companies take 50%, others structure it like a royalty deal where they keep 80% and give you 20%. If you can negotiate a lower fee, great. I’ve seen companies go down to 20% or even 15% if they’re really excited about the movie.
Just don’t get stuck trying to fight for a 2–3% difference that won’t matter in the big picture. If the movie makes $10,000, arguing over 3% is a few hundred bucks. Focus on what really matters: who’s going to work for your film.
3. The Expense Cap — How Much Are They Charging You?
This is the sneaky one. Some companies will tack on a flat expense number—like $50,000—without giving you a breakdown of where that money goes. That’s a problem. That just puts your film in a deep hole right from the start.
These days, most companies aren’t spending that kind of money on marketing unless the film has serious star power. So if they’re claiming a big expense number, ask what it’s for. You want a clear, capped number that makes sense—and you want reporting.
Don’t be afraid to push back and ask for transparency. If there’s no expense cap or if it’s vague, you could be waiting a long time to see any return.
Bonus Tip: Don’t Let the MG Distract You
An MG (minimum guarantee) sounds great. Who doesn’t want money up front? But here’s the deal—MGs are getting rare unless you have recognizable cast. And even if someone offers you $5,000 right away, you shouldn’t jump on it just because it’s cash in hand.
I’ve seen filmmakers take bad deals just for a small MG, while a better company was offering a fairer deal with better long-term potential. Think long game. Don’t trade solid terms for quick money.
Final Thoughts on Signing a Film Distribution Agreement
At the end of the day, you want a partner who’s going to go out there and work your movie—not just throw it on a shelf and hope someone finds it. Focus on these three key areas: term length, sales fee percentage, and expense caps. Understand them, negotiate when you can, and don’t settle for vague promises.
If you get these things right, you’re setting your film up for a much better shot at success.
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