Producer's Bill of Rights

By Omar Kaczmarczyk

Preamble

LongTale, LLC, sells and manages motion picture rights for theatrical, broadcast television, and home entertainment releases in the world-wide international market. In the new digital economy, in which movies can play forever, this is international intellectual property assets management.

 1. Producers should be professionally represented (not represent themselves)

Too often, international film sales are considered one of those things producers can do by themselves. It is a serious mistake to think that selling and servicing motion pictures in the international marketplace is easy.

It is far more involved than simply attending AFM, CANNES, MIFED, MIPCOM, and the many other annual film and television markets. Attendance at these markets is important, but it is only a step.

A membership to sell at film markets and the actual staging of a market presentation is expensive and requires a great deal of detailed preparation, generally beginning six months before each market.

The basic cost of participating in just one of the major markets (AFM, Cannes Market, MIFED, MIPCOM, etc.) is between $75,000 to $250,000 U.S. and about $35,000 for each of the interim markets. There are costs exclusive of advertising, preparation for at-market or in-competition film screenings, and many additional marketing costs.

But selling a motion picture is only the tip of the iceberg. After “making a deal” for distribution in a territory or nation, there are actual motion picture delivery, account servicing, and revenue collection. This is a process that is extensive, time consuming, and tedious.

Finally, consider the problems of accounting for the different tax treaties and tariffs for each international sale. Withheld taxes alone can chew up substantial amounts of the revenue if the transactions are not “routed” properly to reduce liabilities.

Producers need to do what they do best: produce. Professional representation is needed to set up the distribution matrix that will provide the maximum revenue.

2. Producers have a right to not be abused

Little matters if the producer never sees any “real money” from each licensee distributor. Aside from first revenue derived by direct licensing sales initiated by meetings at a film market, each license obliges the distributor to pass net revenue through to the producer.

But the motion picture industry provides many tales of the successful release of audience pleasing films that were overcharged by distributors for hidden, unauthorized service fees, which reduce the revenue due to the Producer, resulting in the over use of the accounting term “net negative revenue.”

Briefly put, the biggest problem between the producer and infamous distributors is the “creative accounting” prevalent in the industry. The problem applies both to domestic and international distribution sales.

It really does not matter what the upfront “distribution” or “sales” fee is against the distributor’s gross revenue: Most distribution and sales agreements provide first for the deduction of that fee (whether or not it is 20% or 50% is immaterial), and then require the recoupment of all associated “costs and expenses of distribution services” performed by and now owed to the distributor, letting the distributor interpret exactly what costs and expenses should be recouped before paying the Producer.

It is an interesting fact that there is an appearance of a direct correlation between the distributor’s “costs and expenses” and the amount of gross revenue generated through its sales: In the past, the amount of “expenses” assessed against the picture’s revenues is always just a little more than the revenue that could have been received by the distributor, so that virtually nothing is passed back to the producer. The film business just doesn’t have to be like this. 

3. Producers deserve trustworthy, experienced representation that knows the business

LongTale, LLC, is a team of “visioneers,” established participants in each of these markets. International sales, like so much of the entertainment industry, is based on personal relationships.

It takes time to become established with reputable buyers in the international market and to gain their confidence and loyalty. It obviously helps that LongTale is known as an established seller of licensing rights who can service international motion picture buyers. Negotiating favorable terms, and then collecting what is due, near to “on-time,” is much easier when buyers can depend on receiving the motion picture they want, when they want it, and in the format and quality they require. LongTale’s involvement is a guarantee to buyers that the pros are on board.

An additional valuable service LongTale provides to producers at the international film markets is the reduction of investor risk through either actual presales prior to production (as long as this can be accomplished at prices equivalent to what would be realized after completion of the film), by “pricing” of the future product through “offers” prior to film production in order. This can determine the value of cast, story, and other creative elements prior to committing to them in production. It is established relationships that can make “pre-sales” positioning of a new production possible.

LongTale’s chief advantage is its International Entertainment Business Consultant and Managing Director, Omar Kaczmarczyk, who is a well-established member of the international independent film production and distribution communities. He has been involved in international sales for over 30 years and is accredited with facilitating the world-wide sales of The Three Musketeers, The Four Musketeers, Superman—The Movie, Superman 2, Superman 3, Supergirl, Santa Claus—The Movie, The New Adventures of Pinocchio, Sir Arthur Conan Doyle’s The Lost World, and more.

LongTale has designed a unique business process to ensure the greatest possible share of the actual revenue, in any territory, is passed directly through to the Producer. LongTale’s visioneers process buyer orders, manage marketing services, and administer all phases of product delivery and revenue collection. LongTale manages the necessary tier of international transaction companies who hold the proper tax treaty affiliations to avoid this potentially costly pitfall.

That is what we do, and once signed with LongTale, it is what a producer has a right to expect.