“Packaging” departments often serve as a gateway for the ongoing influx of financiers looking to invest in film. Indie units are invaluable for new filmmakers who are seeking the connections they need to get a film made. The agencies are excellent at making introductions and identifying financing – they know the foreign distributors and equity fund sources.
There is no doubt that the quality of a filmmaker’s script is a paramount consideration in order for an indie division to consider the script, as well as validation from a trusted professional, such as an attorney or another reputable talent agent.
It is also important for a film to already have at least one key attachment already committed to the film, such as a reputable director or actor. Filmmakers also have to have produced a short for their project.
How do indie filmmakers attract A-list talent to their film? A pay-or-play offer is definitely required. This is where private funding or a foreign sales agent is used to back financial offers to stars.
Lets start by saying that if you’re thought is to finance the film yourself, this is a darn near impossible task. There are not enough payday loans in the world to finance the distribution of a film, especially an indie film, never mind paying the actors, camera personnel, etc.
How much do agencies receive for packaging? They will usually charge a percentage on commissionable elements (writers, directors etc who are clients) – this is around the 10% mark, as well as charging a packaging fee if the film was financed with the assistance of the agency. Packaging fees are often in the vicinity of two percent of the budget of the project, with a floor.
Agencies will often distribute films domestically, as well as placing the films with foreign sales agents. The sales fee charge is a percentage of the sales price and is usually about 10 percent.
Naturally, indie divisions are also concerned with ancillaries flowing from the films, such as sequels, TV applications, stage adaptations, and game and mobile content.
A similar “packaging” system operates with TV.
Packaging fees can be much more lucrative for an agency than straight commissions from clients because fees include participation in the back-end. An agency will usually receive a percentage of the license fee of the show payable when an episode is produced, a percentage of the budget of the show, which is recoupable when the show is in a net profit position and a double figure percentage of the back-end, when the show is syndicated.
The great thing about this model is that studios pay the packaging fees – which are built into the cost of the show. Studios are often happy to pay these fees because agencies often put multiple elements together and act as a development executive.
Gene is a talent agent and lawyer. He has a law degree with honours, and a business degree. He is a member of the Beverly Hills Bar Association.