by Jeff and Todd Brabec
On occasion, producers of independent films, documentaries, lower-budget films, or films that have substantially exceeded their production budgets at the time music is being selected will ask a publisher to reduce its up-front sync fee for a song and, in return, guarantee an additional payment at some time in the future if the motion picture turns a profit or exceeds a certain agreed-upon gross or net dollar plateau.
On occasion, producers of independent films, documentaries, lower-budget films, or films that have substantially exceeded their production budgets at the time music is being selected will ask a publisher to reduce its up-front sync fee for a song and, in return, guarantee an additional payment at some time in the future if the motion picture turns a profit or exceeds a certain agreed-upon gross or net dollar plateau.
The experienced publisher or other representative knows that such a guarantee (considering the sometimes unorthodox accounting practices of some film companies and the unsuccessful track record of most low-budget films) is usually pie in the sky, and may refuse such a request.
However, if the publisher or songwriter or writer-artist have a good relationship with a particular producer or director, knows how profit-and-loss accounting works in the motion picture business, believes that the company will remain in business or has an affiliation with a financially stable firm, has fairly strong audit rights, or simply believes in the project, such arrangements can be and are made. In these cases, step deals are many times agreed to because they provide additional payments if a film is successful.
For example, if a film reaches certain agreed-upon box office receipts plateaus (e.g., $1,000,000, $5,000,000, $10,000,000, $15,000,000, etc.), additional payments will be made to the music publisher/songwriter of the songs in the movie.
Other payments can be triggered for by events such as securing national distribution, securing a foreign distributor, finalizing a television or home video sale, etc.
This article is based on information contained in the new, revised paperback edition of the book "Music, Money, And Success: The Insider's Guide To Making Money In The Music Business" written by Jeffrey Brabec and Todd Brabec (Published by Schirmer Trade Books/Music Sales). www.musicandmoney.com
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