WHAT IS A SALES AGENT AGREEMENT? (In the Entertainment industry.)

WHAT IS A SALES AGENT AGREEMENT? (In the Entertainment industry.)  

Bruce Bisbey…please follow me at: https://dumbdogproductions.com/ https://dumbdogproductionsllc.blogspot.com or https://www.facebook.com/DumbDogProductionsLLC/ thank you.

What is a Sales Agent Agreement?

Independent filmmakers can spend years coming up with the perfect idea, scraping together the funding to shoot, and finally completing that masterpiece—but the film may be relegated to the shelf if it cannot be sold to exhibitors. Film sales agents represent filmmakers in need of a distribution agreement.

Under this type of agreement, a sales agent acts as the film owner’s agent in consideration for a commission. Thus, there is no grant of rights from the owner to the sales agent. However, if the sales agent is exclusive and has the authority to enter into licenses for and on behalf of the owner, then the sales agent resembles a licensee. Because a sales agent does not pay an advance to the owner, and because the sales agent’s distribution expenses are typically relatively low, the sales agent is usually entitled to a relatively low distribution fee.

How does one select a good sales agent?

Well this is not easy. Start by finding out who are the sales agents. Do this by obtaining copy of the Hollywood Distribution Directory, published by the Hollywood reporter. This directory is a fine source of information. Select a few and check them out. Look at the type of films they represent; how long have they been in business; if they attend film markets; if they provide references; ask friends in the film biz if they know of them, use due diligence!

While sales agent’s primary role used to be selling completed films (and still is on the lower budget side of things), things have now shifted and with budgets over a million and certainly much higher than that, they have taken on the role of producer, financier, packager and every combination in between.

On average don’t expect pre-sales for smaller films. To be clear, they are looking to attach themselves to at least over a million in budget that can be packaged with a meaningful director and cast and have international potential.

To get their hands on the most promising projects with the in-demand directors that sell, they’ve gotten line of credits and equity investors they can tap to secure these projects at the earlier stages and aid in the full financing via pre-sales, additional equity, and financing partnerships.

Generally, it’s independent directors or first-time directors working outside the studio environment who require the help of a film sales agent. Once the distribution deal is finalized, the film sales agent is responsible for delivering all components of the completed film to theaters. With so many films being produced each year, and with a great portion of those lacking a distribution strategy, these wheeler-dealers never lack for a challenge. Competing to find and acquire new films is the lifeblood of a film sales agent, and film premieres, industry parties, and film festivals are the hunting grounds. At the same time, promotion of the films is paramount to their success, so creating strong relationships with distribution outlets is key to their business. At times it may be necessary for a film sales agent to actually broker deals for filmmakers.

Term of the contract

A producer needs to ensure the agent has enough time to sell, but if he is not doing a great job, you need to be able to terminate the agreement. One way is to agree to a short-term deal, maybe one year with option of additional year. Another way to try and ensure performance by the agent is to state that if the sales agent does not approach a certain amount of within a period of time, the producer can terminate. This area can be contentious, so be prepared to negotiate.

Potential revenue

A producer should ask the agent to provide a list of potential revenues for the major territories. This usually covers all rights for the individual countries such as Germany, UK, Japan etc. Such a list can be very revealing, as it will show the producer, probably for the first time, the potential revenue he may get for the film he has spent two years of his life to make and, also, whether his investors will ever get their money back. Please note these estimates by territory provided are only estimates and many factors go into such a list including, budget, actors, genre, etc.

What is beneficial about this list given to you by your potential agent is that the producer can state that territories cannot be sold beneath a set price without producer agreement. This prevents an agent selling your film below a value you wish to obtain – of course that has its own downside in that you need to negotiate that with the agent and they might feel inhibited during the sales process at a market. So there is good and bad in this area.

Arbitration

Make sure you have in any agreement with an agent for a binding arbitration clause that in event of a dispute no law courts are used to settle the matter, but an arbitration tribunal will make a decision that is binding on all parties. Cheaper and quicker that law courts.

Never, never, never, NEVER allow the agent access to your film negative or digital masters. You provide to the agent only the masters specified in the licensing agreements for sales with buyers. However, I must warn you, the agent has ways around that control, but that is a completely different discussion…

Documentation/Accounting

The producer MUST get full and documented accounting of all costs and revenue from the agent. Quarterly for the first year, then half yearly from then on. Also, get signed and fully executed copies of all licensing agreements with buyers on sales made for your film.

References & Credits: Google, Wikipedia, Wikihow, WikiBooks, Pinterest, IMDB, Linked In, Indie Wire, Film Making Stuff, Hiive, History Channel, Film Daily, New York Film Academy, The Balance, Careers Hub, The Numbers, Film Maker, Film Site, TV Guide Magazine, Blurb, Media Match, Quora, Creative Skill Set, Chron, Investopedia, Variety, No Film School, WGA, BBC, Daily Variety, The Film Agency, Best Sample Resume, How Stuff Works, Studio Binder, Career Trend, Producer's Code of Credits, Truity, Production Hub, Producers Guild of America, Film Connection, Variety, Wolf Crow, Get In Media, Production Beast, Sony Pictures, Warner Bros, UCAS, Frankenbite, Realty 101, Careers Hub, Screen Play Scripts, Elements of Cinema, Script Doctor, ASCAP, Film Independent, Any Possibility, CTLsites, NYFA, Future Learn, VOM Productions, Mad Studios, Rewire, DP School, Film Reference, DGA, IATSE, ASC, MPAA, HFPA, MPSE, CDG, AFI, Box Office Mojo, Rotten Tomatoes, Indie Film Hustle, The Numbers, Netflix, Vimeo, Instagram, Pinterest, Metacritic, Hulu, Reddit, NATO, Mental Floss, Slate, Locations Hub, Film Industry Statistics, Guinness World Records, The Audiopedia, Imagination for People, Literary Devices, Start Up Film Maker, On Post Modernism, Forbes, Schuyler Moore, Film Escape, Jon Garon, Stacey Parks, Sheri Candler

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Sale Agent Agreement Form / Photo Credit: Sample Forms