A distribution agreement where the advance is payable only on delivery of the finished film to the distributor.
A covenant contained in loan documents where the borrower agrees not to createor permit to exist any other mortgage, charge or security interest over any of its assets. The covenant is often subject to stated exceptions.
Net Asset Value or Net Worth
The book value of the assets of a company or business less its liabilities, exluding liabilities to equity investors. The net asset value reflects the share holders’/owners’ net investment in the company or business.
Net Present Value or NPV
Today’s value of money to be received or paid in the future after applying a discount to reflect the delay before it is received or paid. The accuacy of the result depends on the assumptions made in assessing the discount rate.
A misnomer for a loan where the lender has no recourse to any party or any assets other than the assets over which the lender has specifically taken security, in effectthe proceeds of exploitation of the film, and/or the single purpose vehicle which owns the assets.
All forms of television other than standard television. It includes trapped audience rights, basic cable (except where the programme signal is receivable over the aid with a standard rooftop or settop aerial, pay cable and over the air subscription television(STV), direct broadcast by satellite (DBS), master antenna television (MATV), multi-pointvideo distribution systems(MVDS) and satellite master antenna television systems(SMATV).
The rights to exhibit afilm to a live audience by direct projection by means of sub standard gauges (for example 16mm or 8mm) or by video grams, where the exhibition of films on a regular basis is not the primary purpose and when no specific admission charge ismade forthe exhibition.
The excercise of non-theatrical rights is usually limited to educational establishments, nursing homes, hospitals, `shut in locations’ – such as prisons, conventsand orphanages- and clubs and other organisations of a religious, educational, cultural, charitable or social nature.
The transfer of all benefits and obligations under a contract. The transfer requires the consent of the person to whom the obligations are owed. This is to be contrasted with an assignment, which is the transferof the benefit only of a contract or other right, and may not require the consent o fthe person owing the obligation.
National Television System, the code system used in the USA and Japan by which colour television pictures are distributed or transmitted using 525 lines. See also PAL and SECAM.
Off-Balance Sheet Finance
An arrangement under which a loan is made to a company without the debt appearing on the investor’s balance sheet and affecting its gearing ratio. Historically, the use of off-balance sheet financing techniques was widespread. Latterly, however, it has become difficult to keep assets and liabilities off a company’s balance sheet in view of FRS 5,`Reporting the Substance of Transactions’.
Optical Sound Negative
To make optical sound combined prints,the final master magnetic mix is re-recorded as a photographic optical sound negative. This negative is synchronised and printed with the final cut picture negative on positive stock, tomakethe married print.
In the context of film, an option is a right excercisable during a specific period for a specific sum to acquire certain rights,for example the right to produce a film based on a book, or a right to require an artist to contribute to a production.
Distribution revenues payable to the producer after the advance or minimum guarantee has been recouped.
P & A Commitments Spend
A contractual obligation imposed on a distributor to spend specified minimum sums on prints and advertising to support the initial theatrical release of a film.
The provision, usually by a talent agency, of a package of individuals to work on a film. The package might consider of anyone or more of the director, screenplay writer, stars and members of thesupporting cast. The package is presented as a whole – you cannot choose some elements only.
Producers Alliance for Cinema and Television, the UK trade asociation for film and television producers.
Phase Alternative Line,the code system used in the UK by which colour television pictures are distributed or transmitted using 625 lines. PAL is also used in an increasing number of countries in Europe. See also NTSC and SECAM.
Panning and scanning
The process by which a film shot on an aspect ration (the ratio of the width to the height of the picture) suitable for cinema distribution (eg 1.85:1 or 2.3:1) is reduced and adjusted for television transmission (standard screen 1.33:1, wide screen 1.8:1). When a film is shot for both theatric distribution and television transmission the viewfinder is often `masked’to ensure that the main action is within the television aspect ratio.
Pay or play
A commitment to pay a directoror performer made before production commences, and some times before all the finance has become unconditional, regardless of whether his o rher services are used.
Television programming (otherthan basic cable) for which the viewer has to pay something otherthan a government licence fee.
An agreement which deals with the production, finance and distribution of a film as opposed to one ortwo only ofthese elements.
Pledge holder agreement
An agreement under which a processing laboratory agrees with the financiers of a film not to part with possession ofthe original negative and the principal film materials without prior written consent of the financiers. See also access letter and laboratory letter.
Shares of back end or net profits in a film are measured in percentage points. To have points in a film means to have a share of the net profits.
A licence or distribution agreement entered into before a film has been completed. The advance, minimum guarantee or licence fee payable underthe pre-sale may form part of the finance package for the film, either as a direct contribution towards the cost of production or, if the advance, minimum guarantee or licence fee is only payable on or after delivery of the film, it may be discounted.
The opposite of a sequel – it is set before the events depicted in the film from which it is derived.
An agreement between the financiers and, sometimes, the completion guarantor, regulating the priority of their respective security interests in the film
An individual, often having little direct connection with the film industry, who invests his own money in a film. In the world of theatre he is referred to as an angel.
Producer’s share of net profits
Net profits are what is left of revenues from the exploitation of the film after distribution fees and expenses, repayment of any loans and investments raised to finance production, repayment of any sums extended by the completion guarantor and the payment of any deferments. Net profits are normally divided between the investors and the producer. The producer’s share is usually between 40-60% of the net profits, out of which the producer may have to pay the profit entitlements (points) of various individuals and others who have contributed towards the film. These shares are fixed either as a share of the producer’s share of net profits or as a share of 100% of the net profits. See also back end.
Production to budget undertaking
The undertaking given by the individual producer to the completion guaranto that the sums allowed in the budget for the film approved by the financiers and completion guarantor for the cast, living expenses, music and legal fees will not be exceeded.
The Performing Right Society Limited, the British collecting society which licenses perorming and broadcasting rights in musical works on behalf of composers and music publishers and collects and distributes revenues derived from such licensing.
The order in which investors and financiers are repaid their loans and investments (and interest). Although all revenue may be applied in a single order, often revenue from different distribution territories or media are applied in different orders.
A new production based substantially on the script of an existing film. A remake may be a new production based on the script of an old film, such as the various versions of A Star is Born, or an English language remake of a foreign language film, for example, the French film Nikita remade in America as The Assassin.
A sum of money, payable under a union, guild or individual agreement, to a performer, musician, writer, composer, director or producer by reference to the means by which, or the place in which, the film is exploited.
Revolver or revolving facility
A loan facility which requires loans to be repaid at the end of given periods – usually each interest period – but enables the loans to be immediaely redrawn at the end of those periods subject to a final repayment and termination date. Such facilitites often arise when the borrower has the option of borrowing in more that one currency.
Roll over relief
A relief for capital gains tax purposes (or corporation tax, in the case of a company). It operates by deferring liability for tax on a sale, where the proceeds are invested in further qualifying assets, until such time as a sale takes place and there is no such reinvestment.