PROPOSED RETURN SCHEDULE
The table below delineates our proposal for the order in which net revenue derived from all movie sales can be distributed. First, net revenue is returned to the client until the contribution is recouped in full. Second, depending on the production type of the movie, a priority return ranging from 5% to 50% of the contribution is then returned to the client. Third, all subsequent continuing revenue is then provided to the client in percentages ranging from 50% to 90% depending on the type of production financed. The order of return in the proposed schedule is a modification of generally accepted industry practice, and actually provide more favorable returns to the client. All proposals are open for negotiation.
|Investing in making a movie is very high risk and the extent to which a client recoups their initial investment, receives a priority return, and then collects a share of additional profits, is contingent on the amount of net revenue realized from movie sales for which there is never a guarantee.
While there are seven prospective production types listed, YBS/LegacyVision Films focuses on the five budgeted productions labeled A through E, which generally reflect the budget range that the film industry considers as “low budget” productions, and what YBS/LegacyVision Films believes provides the very best combination of adequate funding to film a movie while also keeping production overhead relatively reduced to increase the probability of achieving profit. Each production type is based on the total project budget allocated. A Budget productions range from above $1.500,000 to $2,500,000, and provided movie sales is able to refund the investor the entire amount contributed, provides a priority return of 30% and a share of any further profits of 75%. B Budget productions range from above $700,000 to $1,500,000, and provided movie sales is able to refund the investor the entire amount contributed, provides a priority return of 25% and a share of any further profits of 70%. C Budget productions range from above $250,000 to $700,000, and provided movie sales is able to refund the investor the entire amount contributed, provides a priority return of 20% and a share of any further profits of 65%. D Budget productions range from above $100,000 to $250,000, and provided movie sales is able to refund the investor the entire amount contributed, provides a priority return of 15% and a share of any further profits of 60%. E Budget productions range from above $20,000 to $100,000, and provided movie sales is able to refund the investor the entire amount contributed, provides a priority return of 10% and a share of any further profits of 55%. The two additional budgets, Open and Micro, round out the spectrum of production types which reflect the intent of YBS/LegacyVision Films to continue to make movies whether the funding is on the very high end or at the very low end, and the respective priority return and additional profit percentages associated with each (50% & 90% for an Open Budget, and 5% & 50% for a Micro Budget) reflect the risks taken by investors on either end. The point is to provide a myriad of options for investors to make a movie. Indeed, it is the company’s motto that, “If it has a budget, it will make a movie, and if it doesn’t have a budget, it will still find a way to make a movie.” It is an absolute fact that at any given point in time, the company is always in the process of making a movie.
Government Incentive Benefits
It should be noted that (given sufficient sales) these proposed returns would be provided regardless of the financial benefits that are derived from any Government Incentive Programs which are described in Movie Financing Scenarios. Essentially this means that when all government tax benefits are realized, the client would have produced a movie on considerably less money than what their initial contribution involved, yet still received eventual returns and profits based on their original contribution.
Multiple contributors receive pro-rata returns according to their share of the total contribution to the project budget.
Back End Points
Star actors who are provided back end points (see “Star Marketing Power” in Movie Making Guidelines) will be given their shares based on net revenue realized after the priority return. The additional profit distribution is then calculated after the points are given.
Returns may be paid as frequently as on a quarterly basis, more usually on a semiannual basis, and will occur minimally on an annual basis.