How should I define backend payments in contract for DPing feature film?

[Roger Alexander]

In the middle of Feb. I will be DP'ing my first feature film. I will be providing my personally owned lighting and grip equipment as well as a RED Dragon cam. I will be lighting the scenes,camera operating, and providing directorial advice to the director. Shooting is scheduled for 3-4 weeks. There is a budget for me to be paid an (ok) rate in installments over the course of those 3-4 weeks. The film will be submitted to bigger studios/reps/investors for consideration of being picked up or bought and being produced on a bigger scale with bigger budgets. In the event that our version does actually get picked up, I assume the the producer/production team is compensated for it correct? How exactly does it work? Is it one payment or is it like royalties?

 

I'm currently typing up a contract that is due in 24 hours to define the terms of work and payments for the project and I want to make sure that if there is backend compensation from getting picked up, that I get covered and receive a piece of that compensation. How should I word this in the contract? Any advice would be greatly appreciated?

[Brian Drysdale]

Any such payment is usually a percentage of the net profits... Of course, with all the deductions for marketing etc etc, there usually aren't any net profits.

[AJ Young]

Brian is correct, you'll most likely not receive any funds in return from the film's backend.

 

BUT! You never know what explodes in the market.

 

Legally, I can not be held liable for whether or not this excerpt below from my contract will work for you. It was designed specifically for me by a lawyer specifically for this one project.

 

That being said, for purposes of education, here's an excerpt from a contract for a feature I did last year:

 

 

4. CONTINGENT COMPENSATION:

4.1 Provided the DP faithfully performs all duties and obligations required hereunder, DP

shall receive as contingent compensation (the “Contingent Compensation”):

4.1.1 an amount equal to One Percent (1%) of One Hundred Percent (100%) of

Production Company's Net Profits (as defined below) derived from the exploitation of the Film.

4.2. The term “Gross Receipts” as used herein means the aggregate of the following:

4.2.1 All sums actually received by Production Company in United States Dollars on

account of receipts derived from the sale, distribution, marketing or other exploitation of the Film or

any rights therein, (excluding any sums received or earned by any licensees of the Film or any amounts

received in the form of tax credits/rebates/subsidies or other incentives), after deduction from such

receipts of the full distribution fees or charges payable to the distributor and of all costs, charges,

expenses and other items (including but not limited to the costs of prints, advertising and publicity,

sales representatives, duties, taxes, foreign language versions, insurance, royalties, shipping charges,

agency packaging fees, etc.) which the distributor or any sub-distributors are entitled to deduct or

recoup pursuant to any distribution agreement relating to the Film or which are incurred by Production

Company in connection with, or incident to, the distribution, sale, marketing or other exploitation of

the Film and not otherwise deducted by the distributor from sums payable to Production Company

under any distribution agreement; and,

4.2.2 All sums actually received by Production Company in United States Dollars

directly from any person, firm or corporation (other than sums received from a distributor under the

provisions of any distribution agreement as hereinabove provided) on account of any sale, lease,

license or other disposition of any of Production Company’s rights or interests in or to the Film and

all sums received by Production Company on account of or by reason of any infringement or

interference by a third party of or with the Film or any rights therein, after there is first deducted from

such sums any and all costs, fees or expenses paid or incurred in or in connection with any such sale,

lease, license or other disposition (as such costs are set forth in Section 1(a)) and/or in connection with

deriving any such revenues or effecting such recoveries.

4.3. The term “Net Profits” as used herein shall mean the difference between Gross

Receipts and the sum of the following deductions, on a continuing and cumulative basis:

4.3.1 All revenues received by the Production Company pursuant to Section 4.2

hereinbove, when received by the Production Company, be applied first in payment of the following

items:

4.3.1.1 All ongoing and unpaid operating expenses of the Production Company

and all expenses incurred in connection with the production of the Film;

4.3.1.2 All costs of production of the Film that have not been supplied by the

Members, if any;

4.3.1.3 Such reserves as the Members deem necessary in accordance with good

business practice to cover future Company expenses.

4.3.1.4 All investors in the Film shall recoup their respective capital

contributions plus a One Hundred Percent (100%) return thereon;

4.3.1.5 All deferrals, if any, shall be paid; and

4.3.1.6 Thereafter. Fifty Percent (50%) thereof to all investors in the Film, pro

rata, pari passu in accordance with their respective Percentage Interests in the Production Company,

and, Fifty percent (50%) to Production Company (or its assignee who shall assume such obligations,

out of which amount any net profit participation of third parties above-the-line talent, shall be paid

and distributed;

4.3.1.7 Therefore, the Fifty percent (50%) share set forth herein shall be

deemed Production Company’s Net Profits for purposes of this Agreement.

 

Take what you will from it. With contracts, however, remember that they're only as good as the people signing it. You can use it in a court of law, but often times it's not worth the money and time for a legal battle.

 

I HIGHLY recommend you hire a lawyer to draft a contract. I understand the rush in your situation, but if the production wants you then they can wait.

 

Note that one of the lines can be used against me: All ongoing and unpaid operating expenses of the Production Company. I missed this part when I first signed, but went with the project anyways with the understanding that:

 

For low budget films, it's unrealistic to expect any money from the back end. They usually break even with their revenue and the production company has far more expenses left uncovered from post that will prevent any income to reach you. It's the same with the income from distributors to the production company.

[Roger Alexander]

Thank you so much AJ this was VERY informative!

[Tyler Purcell]

I mean, generally cinematographers don't get back end on smaller projects, it's only bigger one's with decent distribution deals set already. I've never heard of someone trying to get back end money from a small indy film as one of the "crew" members. This is why I generally co-produce or "associate" produce the films I work on. It's more work, but heck, you're already doing the work, so why not get the credit? As an associate producer, you have the rights to get back end money.

 

Contracts are also nice, but they're also worthless on smaller projects as well. Who is going to fight for your 1%? Are you going to pay for lawyer? Are you going to sue the producers to get your money? Or are you going to work on the next job and forget it ever happened. Remember, if you sue ANYONE... you will never work with them or anyone they know again. This is why I hate contracts on low-budget stuff, it's why I refuse to work on a shoot that requires them. If the producers are going to screw you, they will screw you no matter what. The moment you pay for a lawyer, is the moment you're no longer making money.

 

Sure, if you're working on a studio show, yea... get a contract, the studio will settle out of court. But low-budget filmmakers don't have the capitol to deal with that stuff. So you can sue them all you want, there isn't anything to be had in most cases.