Cash Break-Even
From ForcaWiki, the simple encyclopedia
| In one sentence | The moment a movie's earnings catch up to its costs using a low, or even zero, distribution fee, reached sooner than actual break-even. |
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| Category | Film and Television |
| Related | Actual Break-Even, Rolling Break-Even, Distribution Fee, Deferral |
Imagine judging whether your lemonade stand has paid for itself yet, but being generous about it: counting only the bare minimum costs, and skipping some of the more arguable ones for now. You would reach that easier "paid for itself" point much sooner than if you counted everything strictly.
Cash break-even is that easier, earlier milestone for a movie. It is the point when a movie's Gross Receipts reach its Net Profits calculation, but using a low, or sometimes even zero, Distribution Fee instead of the distributor's full, normal one. There can be several different levels of cash break-even along the way, each one using a slightly higher distribution fee, until the movie finally reaches its stricter Actual Break-Even point.
Fun facts
- Because cash break-even is easier to reach, some deferred payments to talent are set up to be paid out right after this milestone, rather than waiting for actual break-even.
- A movie can hit cash break-even quite quickly, even while still being far away from ever reaching actual break-even.
- Contracts sometimes describe several separate cash break-even levels, almost like a staircase leading up toward actual break-even.