Presale
From ForcaWiki, the simple encyclopedia
| In one sentence | A contract that sells a movie's distribution rights in one territory before it is even made, in exchange for a promised payment once it is delivered. |
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| Category | Film and Television |
| Related | Minimum Guarantee, Overage, American Film Market (AFM), Gap Loan |
Imagine you promise to build and sell a friend a treehouse next summer, and they pay you a portion up front today, agreeing on the final price now, even though the treehouse does not exist yet. You have not built anything yet, but you already have a real deal in hand.
A presale is that same idea, done at the scale of a movie. It is a contract that hands over a specific film's Distribution Rights to a distributor in one territory, before production of the movie has even begun, in exchange for a Minimum Guarantee, plus overages if the movie ends up doing even better than expected.
Why presales matter so much
Presales are one of the main ways independent movies get financed. A producer can sell the same movie's rights, territory by territory, to different distributors around the world, often at events like the American Film Market, and use those signed promises to borrow real money right away, sometimes through an Advance Rate against each deal, or through a Gap Loan covering whatever territories have not sold yet.
Fun facts
- A movie can be almost entirely financed before filming even begins, just by pre-selling its distribution rights around the world one territory at a time.
- Presales rely heavily on a movie's comps, since a distributor needs a reason to trust that a not yet made movie is worth guaranteeing money for.
- The opposite approach, making a movie without any presales at all, is called making it On Spec, and it is a much riskier bet for everyone financing it.