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TOPIC: advances and guarantees

advances and guarantees 24 Nov 2008 18:43 #30428

  • Mike
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We have not paid thse at our theatre in a long time but recently found that Twilight wanted 1500.00 advance and we coughed it up. An advance differs from a guarantee in that the advance remains yours if you do not gross enough to consume it. I had no fears with Twilight. I recall Passion of the C and they demanded 5000.00 and got it and it was a guarantee. Yeeks. That had a bit of pucker up to it. But the film performed no problem. People just getting into the business need to know they will be expected to pay advances (not guarantees) as they establish credit with the studios. Earnest money? It's normal and I find they do not ask more than you'll be grossing soon.
Michael Hurley
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Re:advances and guarantees 24 Nov 2008 20:25 #30429

  • rufusjack
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I was told on Twilight it was a $1500 guarantee not advance. Then at the last minute i was told it was also meant to be an advance as well. Thank goodness for wire transfers.

My advice: double-check, triple-check and ask for written confirmation at least by email. Not all studios like to communicate terms by email though.
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Re:advances and guarantees 24 Nov 2008 21:44 #30430

  • slapintheface
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I have never paid an advance or a guarentee on 1 st run.Twice on a classic film i have .(by Sony both times)
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Re:advances and guarantees 25 Nov 2008 11:48 #30433

  • Mike
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It's unpredictable. Some never get asked and others, especially new owner/operators see it far more than they like. In any event; my experience is it's usually fair and in relation to what you should/will be grossing in a very short time on said pictures. Twilight 5200 prints x 1500.00 advance/guantee/whatever = 7.8 million. That goes a long way to helping them pay for prints and ads, etc. Usually yous ee this on distribs like Newmarket (Passion) and Summit so they can get some cash when they need it: at release date. The rest are based on establishing a relationship: can you write a check? That's what they want to see at distribland.

I primarily posted this for new owners for future searches on the subject.
Michael Hurley
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Re:advances and guarantees 25 Nov 2008 16:17 #30435

  • muviebuf
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Taking a somewhat more cynical view, what I find is that the one-hit-wonder distribs (Newmarket with POC, Gold Circle with Greek Wedding, Summit etc) tend to push for the upfront cash more often especially while they have the current hot ticket item. Unlike the majors who have a stream of product - and can cut you off from need future product if you don't pay the bills (or pay in a timely fashion) - the one hit boys want to get paid upfront as the chances diminish how quickly there will get paid (if ever) once their one pic is done and gone.

Why do think Warners pushes its 14 day pay cycle at the holidays. They know that exhibitors are like a junkees in need of the next fix and that an exhibitor would not dare tell them to wait for the money if they think they think future product is in jeprody.
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Re:advances and guarantees 25 Nov 2008 23:27 #30436

  • rodeojack
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There are, maybe, two exhibitors on the planet, who can tell the studios to wait for their money. None of us are on that list.

Bottom line... if you're established... if the studios know you... if they're familiar with your grosses, your payment history, your booking tendencies, and you don't bounce checks, they have no need to spend extra resources, tracking your advance payments... and they probably won't.

Interesting point, though. A new, or startup studio might ask for an advance for cash flow purposes. I'd have to REALLY want their film, though.
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Re:advances and guarantees 26 Nov 2008 19:36 #30437

  • Mike
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I think the need for cash for the newer / smaller/ studios such as Summit or Newmarket, etc. who are in the one hit wonder category is very real. They need to publicize the film in advance and that means big bucks. I think the average per film advertising for major releases was in the 35 million range and it just keeps going up from there the bigger you want your film to be. So asking us for the 20 million in advance makes very big real sense. Unless they have a spare 20 Million kicking around.
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