For most struggling, up-and-coming independent producers, just getting their film made is tough enough, so when it comes time to finally sell the fruit of their long suffering, they are more than happy to pass it on to the professionals who are whispering all those sweet nothings in their ears. But it’s just at this point, when they think they can see the end of the tunnel, that producers need most to beware of being blindsided.
“Just because some sales agent wants their film and claims they will take care of everything, a producer should not stop concentrating intently on his film,” states Bruno Cavelier, vice president of sales for Pacific Shore Media. “The producer should actually be even more involved from that point on.”
For most independent producers, foreign sales companies such as Pacific Shore are the key to the increasingly lucrative international market. But finding a good one or, more specifically, one that is good for your film, can present a whole new set of challenges for the indie filmmaker. “I think the right movie has to be married to the right company,” says producer J. Todd Harris, whose first film, “Denise Calls Up,” was a hit at the 1995 Cannes Film Festival. “I wouldn’t want to take a Merchant-Ivory sort of movie to a tits-and-guns sort of foreign sales company. I think you’ve got to look at a company’s portfolio of pictures, what they’ve done in the recent past and what they have in the near horizon, and see if you’re that type of movie. I think it also comes down to your rapport with the main sales person. Is this the person you want representing your product in the marketplace?”
Producer Don Ranvaud of SereneSkylight concurs: “Each film is like a separate creature. It’s like a baby. They’re all different, and I think you’ve got to have somebody who can feel for that and understand it in every single way.” This kind of attitude he finds most often at the smaller sales companies, though he feels it’s equally important that “your film also sit well with the other films in the catalog.” For this reason, Ranvaud chose a larger sales company, UGC, to handle his latest film, “Tieta,” which was Brazil’s official entry for the Academy Awards, “because we were with Bertolucci, with new American directors, and with ‘Kundun,’ the Scorsese movie.”
Oftentimes, producers look at other films in a company’s roster as “locomotives” for their film, the theory being that interest generated by one picture will rub off on the entire company’s slate. But Harris cautions against going with a company that has too many films in the marketplace: “You could feel a little bit lost in the mix. By the same token, though, you’d feel a little nervous if you were the only new film they were bringing to a market. It’s death to a foreign sales company to show up at a market without new product, so you want to make sure decisions are being made on a rational basis when they come to you and say, ‘We’ve just got to have this film.’ ”
Equally important to the type and size of foreign sales company an independent producer chooses, is the deal that they eventually strike with them, which can vary widely. “While I’m going to be looking for passion towards the same vision,” says Nick Wechsler, the producer of such indie hits as “sex, lies and videotape,” “Drugstore Cowboy,” and “The Player,” “I’m also going to be looking for the best deal, because basically sales agents get what is tantamount to a gross deal. They get the money right off the top.”
With sales agent percentages ranging from 15% to 35%, this can represent a lot of “lost” revenue for the filmmakers. “The idea of paying 30% makes me dizzy,” admits Harris. “And with foreign sales now accounting for well over 50% of a film’s revenues — more like 70% — to give away nearly a third of it as commission is nerve-wracking. So I really want to go with people who are established, who will pay in a timely fashion. I’m also interested in what kind of an advance we can get, what kind of a guarantee. There are a lot of different levers that can be pulled to help reduce that sticker shock.”
Some producers, such as Ranvaud, have taken to “clawing out a few key territories to sell yourself,” to take a little bit of the sting out of sales agent bite. Wechsler goes even further though, predicting that “almost every company that is going to be a significant financier of movies is also going to operate as a foreign sales company or a foreign distributor, eventually.”
While Harris admits that he has seen more of this going on, “especially at Sundance this year,” he feels most producers are still “in the business of being a film producer, and not in the business of being a foreign sales agent. Besides, you’re just going to wind up paying a foreign sales company to service those deals anyway.”
Adds Cavelier, “You might actually be watering down your own revenue by giving away the film in a major territory to save a few percentage points. And usually, the sales agent can get you the best price anyway.” While a sales company’s percentage remains an important negotiating point for any producer looking to his bottom line, other aspects of the contract can be just as important to the film’s fiscal well-being. “Even very experienced producers tend to just let some things slip by when they’re about to close a deal,” says Ranvaud, “and that can be absolutely catastrophic.”
“The main things you’ve got to look out for contractually, besides the sales agent’s fee, are expenses and delivery requirements,” says Harris. In a sales contract, both of these items need to be spelled out explicitly, with expenses being subject to prior approval and an overall cap. “You’ve got to have a system where they run their projected expenses for each market by you,” says Harris. “Otherwise, if they say we’ll cap it at $75,000, they’re going to come back to you and say we need another $10,000 for this market, and you’re going to feel trapped.” Cavelier also suggests that producers “make sure there is a clause in the sales agreement that if the company is engaged in the sale of more than one film at a market, expenses other than those solely for your film should be split on an equal basis.”
In addition, delivery items — such as M&Es, internegatives and video transfers — need to be scrutinized carefully in the contract, according to Harris. “Every filmmaker just wants to get to answer print, and they often don’t think about the $50,000 to $75,000 to $100,000 worth of delivery costs they are going to run into down the line.” And, cautions Ranvaud, if a producer isn’t careful, these can “oftentimes amount to what you get as an advance,” making it extremely important for a producer to establish just what he is responsible for and what he isn’t and “to always argue about it. Try and include all the delivery items inside your original production budget, too, otherwise you’re going to run into big, big problems.”
Other problems can be alleviated, too, by a producer’s just maintaining his zeal throughout the entire process. “Beyond the contract, it’s going to take constant vigil. A foreign sales company is somebody you’ve got to be in touch with every few weeks,” says Harris, who adds that it’s also important for a producer “not to be afraid to ask a foreign sales company any question in the world. And to make your deals with a lawyer, a lawyer you like and trust and who has experience in this regard.
“You’ve also got to talk to past producers who have worked with the sales company before,” continues Harris. “Get recommendations from them. Look at their track record with collecting. Some companies may offer you nice things up front, but that may be all that you ever see.”
Yet, finally for the indie producer struggling to find his first foothold in the international market, it may come down to one simple truth, says Wechsler: “Find out who wants your movie. It’s really as simple as that. If you have a choice of more than one, then you look at the passion, you look at the deal, you look at the track record.”