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Distribution8 min read

Film Distribution Deals Explained

Film production meeting with documents and contracts on a table

For independent filmmakers, the distribution deal can make or break a project's financial success. Understanding the math behind these deals is essential.

Key Terms

Minimum Guarantee (MG): An advance payment from the distributor to the producer, recouped from future revenues before the producer sees additional income.

Distribution Fee: The percentage the distributor takes off the top of all revenues, typically 15-35%.

Expense Cap: A limit on the marketing and distribution expenses the distributor can deduct before calculating the producer's share.

The Revenue Waterfall

Most distribution deals follow this revenue flow:

  • **Gross Revenue** comes in from all platforms
  • **Distribution Fee** is deducted (e.g., 25%)
  • **Expenses** are deducted (up to the cap)
  • **MG Recoupment** --- distributor recoups their advance
  • **Producer's Share** --- what remains goes to the producer

    • Comparing Deals

    When evaluating multiple offers, look beyond the MG:

  • A higher MG with a higher fee might net you less than a lower MG with a lower fee
  • Expense caps matter enormously --- uncapped expenses can eat all your revenue
  • Territory and platform rights affect long-term earning potential

    • Use our Distributor Comparison and MG Calculator tools to model different scenarios before signing any deal.

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