Profit percentage, how much should i give away?
 

Hi,

Im almost finished editing my latest project, a 10 min short film. So far, everyone, myself included, have been working on the project just for the experience of it.

I got a composer on board who knew the basis of the production, i.e low budget, people working for expenses etc. However, he has now started talking about payment, i have said that there is no money in the budget to pay for music as the budget was only £300 most of which went on travel, food, equipment etc., he was fine with this.

So now, instead of payment he has said that he wants a percentage of profits. my question is how much percentage should i give him?

Obviously whatever i give to him i should also give to the actors and crew and if everyone else is making something then i should make something myself.

I dont know much about this area, he suggested the following:

"A split gross/net arrangement. Which he says, means that if I make any money from my film, but don't break even, then he would get a gross percentage. But, over the lifetime of the film, if I do break even, then he’d switch to a lower, net percentage.

Whether I break even or not, he says it would be reviewed every 3 months."

Does this sound like a normal arrangement to everyone? If not, what would a normal arrangement be?

Should i be recouping costs before any profits are issued? i.e festival entry fees, travel costs to festivals etc.

Any help on this would be greatly appreciated and I do realise that making money off a short film is very rare and that winning anything at festivals is also very difficult, however i just want to have a realistic agreement in place.


Thanks for reading

Tony Webber

It's late at night so my thoughts may be a little muddled, but here is what I'm thinking:

1) No one sees a penny until all the tangible expenses are paid back (food, travel, insurance, etc...)

1.5) I think it is fair to give away a percentage of your profits. I'd probably split percentage amongst the crew based on hours they put it. I'd give between 50%-80% of the profit to the producers, and divy the rest.

2) Although it is understandable that this guy wants to make some money, he may be more a pain in the butt then he is worth. Might be worth you scraping up some money now to pay him off and not have to have him coming after you every 3 months to see if you've made any money.

3) I forget what #3 was so I'm going to bed.

I would go find new music. This guy sounds like he could be serious trouble. If the deal was for no money or whatever was left after expenses, and he agreed, it sounds like he is trying to change the deal now. I would be willing to guaranty he will try this every 3 months. He is going to screw you.

GET IT IN WRITING! Words to live by. Always have your staff sign something stating exactly how everything works in advance of anything!

I would tell him, here's the deal. You knew it was a no budget deal. You agreed to do it. We're done. If he completely blows up, maybe offer him a small fee to settle now or you'll get a new composer.

He does not get paid before YOU (because of the previous "deal"), and he does not tell you how much or when he get's it. What a jerk! Honestly, I'd just fire him!

FWIW: The last time I had music composed for me for a video it cost me about 1% of the total budget.

Hi,

Thanks for your replies. If I pay him up front he says he wants £600.

Is it normal proceedure for the profit percentage to be reviewed every 3 months or would it just be a fixed amount from day 1 and never change?

I have considered just firing him and getting another composer but i expect im going to have the same problem with others.

Should I be taking into consideration, my festival entry fees and travels to and from festivals if i get accepted into one?

What does everyone think would be the best deal to offer? and should it be on my terms?

Thanks

Tony

That's a pretty sticky situation. My first reaction was that he was uptight asshole, but if I look at it from his perspective, he probably just doesn't want to do volunteer work forever and doesn't want to get screwed if your film rakes in some serious cash. It probably won't just cause there just isn't a big market for short films, but you never know.

I did some editing for a friend of mine to help him with his business a few months back. He said that he would definetly pay me for my time if the business succeeded, so I figured, "cool". Then he said "Like $300". It felt a little insulting considering we worked on the thing for 2-3 days and it basically worked out to like $8 an hour. I was happy to help him, but it sucked that he thought my skills were so trivial.

Basically what I'm saying is that people like to get paid for their work, they like to feel appreciated, and they don't like feeling like you're taking advantage of them. I'd probably say that this is a very low budget film that requires volunteers, but that you are willing to sign an agreement whereby he will receive a percentage after all debts (including festival payments, travel, etc.) are paid and a distributor has bought the film. As for checking every 3 months, I wouldn't make a big deal out of it. I doubt he's going to be bothering you every three months. At the worst, he'll stop wasting his time 6 months in when he calls for the second time and you say "sorry, no distributor" (although best of luck getting one if that's what you're looking for.)

Tony,
What is your anticipated revenue stream for this project? That is, where is the money coming from?

It is hard to really decide what is the right course, since we only see your side of the story.

If I was you though, I'd drop him and buy a royalty free music library. You can get something decent for $600!

Anyway, this really illustrates the need to get stuff in writing ahead of time.

i agree with Dylan.... drop him and buy the royalty free music. you can use it on many projects to come and wont have to deal with that guy again! but if you do have to deal with him, then go with a percentage of the NET profits for everyone like the studios do. (most likely he'll never see a dime since your project is unlikely to make a profit (no offense, just reality) but any money you do collect can go into paying for the expenses first. (by the way, i directed my first two low budget features back in the eighties and nineties for a percentage of the net profits and never got a dime! got some demo footage, experience, and lots of connections to start a career with!)


good luck on your project!
marc

I also agree in dropping this guy fast. Sounds like this guys will be a problem down the road.. whether hounding you for payment every 3 months or bad mouthing you and your film. Part of the gross... is he joking? NEVER give a piece of the gross. Cover your investors and expenses first... that's just good business practice. If this guy came in with the full knowledge that there will be zero pay, then do not allow him to dictate new terms to you. It is your production, you dictate the terms up front and be firm regarding payment and points. If you agreed on payment or points then honor that agreement.

If you want to pay points that is your decision, not his. I understand where this guy is coming from with wanting to get paid or a piece of the action for services rendered. I do not like that he is trying to change the agreement midstream. Who is to say he won't try to change it later? In a professional voice tell him that his services are not needed. He exceeds your budget and revenue projections. Go purchase an audio library with the money. The industry is too saturated for this type of attitude.

I agree with most of what everyone's saying here, however, I WILL say: Working with a live composer is a really valuable experience.

The first thing you should discuss with him is: You're all starting out and helping each other - that's the MAIN thing. It's similar to everyone crewing for each other in everyone else's short films - you learn a lot, get to walk away with a credit in a film AND can I re-emphasize - you learn a lot.

That's the first thing. Secondly, like everyone said, most short films don't make any money anway. The main purpose of making short films (as I can see anyway) is to hone your skills, learn a lot, get exposure by sending the works into festivals/competitions, get connections and just really have a good time while making them too. Unless your short gets distribution (and even if it does, it will take a LONG time to break even), I usually think short films are just calling cards - you have your screenplays, short films, CV, etc. and show them to employers.

The last thing is, I believe that when people work for free, it's actually much better. Why? Because if they don't want to be there, they don't have to be. So usually, you can just tell all the people who muck around and slack off to go home - the ones who stay are dedicated and want to create something special. Those who take part are those who are making the film because they want to, not because of possible profits or anything else.

And one day when you make it big - don't forget all those who helped you out. That's what I think anyway, as long as you keep connected with these people and thank them, etc. etc., all this 'free-filmmaking' (which is the purest form I believe) will turn out great.

If the composer doesn't understand what I just said or doesn't share the same/similar mentality, then do what everyone else said: Find another composer or do without.

Dennis