First time making a documentary - questions about money

[Josh Snyder]

So we (I) are planning to shoot a sports documentary about one athlete next year. I will be directing, shooting and at least doing CC in post (editor will be hired most likely) with my own EPIC (which I hope to have by then) and my own computer. The athlete will use GoPro for shooting POV footage for the documentary. The funding for the documentary will be made most likely through kickstarter and the shooting is done here and there through the year. The funding is planned to cover at least travel expenses (will be shooting in few different countries). We plan to release the documentary same time in Bluray and sites like Netflix, Itunes etc.

So here comes the money questions, basicly how much from the profits we make by selling the film goes for me and how much goes to the athlete? The athlete gets free trips to do what he loves to do, I'm using my time to do the documentary. I'm using my EPIC and other equipment for filming/editing, but the athlete also shoots POV footage for the documentary. I have no idea how the profits should be shared and I want it to be fair for both.

Also the athlete has few major sponsors. He wears their clothing and equipment all the time and can't use other equipment when we film because those are tailor made for him. Should the sponsor be asked something for 1h+ of free commercial?

 

[Craig Parkes]

Profit share from a documentary... When and how exactly are you thinking you will turn a profit at this stage?

Do you have interest from a distributor in the project, or a network, any sort of shot at real funding outside of Kickstarter?

It's not that I don't commend you for worrying about the profit share element up front, but the ratios really depend on your business plan, and lots of first time film makers worry too much about "How would we split the money we are going to make" without first figuring out "How are we going to make money."

Once you have a good idea of both potential revenue, and your estimated budget for the project, then you should be using those figures to determine revenue sharing opportunity.

Things to think about though - Independent production is a high risk exercise with a long tail. In other words, very few projects sell for big bucks, most projects that sell end up selling for only a little bit of cash at a time across many different territories, and often that little bit at a time is over the course of many many years.

If you were to revenue share with this athlete (and one would presume that you are banking on them becoming successful, or they are already quite successful to even consider doing that) then you should think about what the 'cap' of value them appearing in the doco is versus the maximum value you could bring to a documentary on any subject, especially as whatever share of profits you offer them reduces either the share of profits you get, or the amount of profits you can offer investors who want to help fund the film.

Without knowing things like what your budget is, how many man hours you expect to put into the project paid or unpaid, how much money you need to raise to get the project off the ground, how much added appeal this athlete adds over any other athlete, what your recoupment strategy is etc it's impossible for anyone to suggest a split. Any suggestion they make will be based off of scenarios potentially completely different to your own.

In regards to sponsors, it's a good idea to bring them into the conversation early, but it's also worth remembering that if if you pitch its effectively an 'ad' for them then it is not your documentary, it is their ad in their minds. They are there to support the athlete, not you, and your documentary may not end up in the athletes best interests, or in their best interests even if it is in the athletes best interests if you get what I mean. Making the call about the sort of project you are making really comes back to what your goals and plan is for distribution and sales at the end of the day.

Basically, you need a roadmap for the whole project to make these sorts of deals. That road map could end up changing, but like all businesses you can only contract based on a plan, and deal with the consequences of that plan not working the way you had thought (for good or for bad) at the end of the day.

I.e you need to negotiate in good faith, but more importantly you need to know what you feel like you are really bringing to the table and delivering at the end of the day, and what other partners in the process are expected to bring to the table and deliver at the end of the day, and have an idea of the relative value of those things for YOUR project, before you can make any deal that makes any sort of sense at all.

 

[jimhare]

That's good advice from Craig. One simple point I would add is that profit is defined as what's left over after costs. If you are working for free for six months then the production is in debt to you by whatever amount you deem your time to be worth.

Make sure you pay yourself for that time before declaring there is any "profit."

 

[Josh Snyder]

Profit share from a documentary... When and how exactly are you thinking you will turn a profit at this stage?

Well, potential profits I should have said.

Do you have interest from a distributor in the project, or a network, any sort of shot at real funding outside of Kickstarter?

Not yet, we haven't talked about this projcet for outsiders yet.

It's not that I don't commend you for worrying about the profit share element up front, but the ratios really depend on your business plan, and lots of first time film makers worry too much about "How would we split the money we are going to make" without first figuring out "How are we going to make money."

Once you have a good idea of both potential revenue, and your estimated budget for the project, then you should be using those figures to determine revenue sharing opportunity.

Estimated budget is way more easy to come up with than potential revenue.

Things to think about though - Independent production is a high risk exercise with a long tail. In other words, very few projects sell for big bucks, most projects that sell end up selling for only a little bit of cash at a time across many different territories, and often that little bit at a time is over the course of many many years.

I'm not looking to make me rich with this, but to make my time worth something and morr in the are of being able to cover my rent and food for the time I work on the project.

If you were to revenue share with this athlete (and one would presume that you are banking on them becoming successful, or they are already quite successful to even consider doing that) then you should think about what the 'cap' of value them appearing in the doco is versus the maximum value you could bring to a documentary on any subject, especially as whatever share of profits you offer them reduces either the share of profits you get, or the amount of profits you can offer investors who want to help fund the film.

He's Red Bull athlete and quite well known in his sport, "top10" if you can say so. His "simple made" youtube videos have usually few hundred thousand viewers each. The film could be made with any athlete who's at the same level, but not any low tire athlete. The documentary would be more like a snowboard film if you have seen one, like a documetary with sport sequences mixed in. So the skill of the athelete counts.

Without knowing things like what your budget is, how many man hours you expect to put into the project paid or unpaid, how much money you need to raise to get the project off the ground, how much added appeal this athlete adds over any other athlete, what your recoupment strategy is etc it's impossible for anyone to suggest a split. Any suggestion they make will be based off of scenarios potentially completely different to your own.

We can only start counting the budget, man hours etc after we have wrote the script and know what and where we are going to shoot.

In regards to sponsors, it's a good idea to bring them into the conversation early, but it's also worth remembering that if if you pitch its effectively an 'ad' for them then it is not your documentary, it is their ad in their minds. They are there to support the athlete, not you, and your documentary may not end up in the athletes best interests, or in their best interests even if it is in the athletes best interests if you get what I mean. Making the call about the sort of project you are making really comes back to what your goals and plan is for distribution and sales at the end of the day.

Basically, you need a roadmap for the whole project to make these sorts of deals. That road map could end up changing, but like all businesses you can only contract based on a plan, and deal with the consequences of that plan not working the way you had thought (for good or for bad) at the end of the day.

I.e you need to negotiate in good faith, but more importantly you need to know what you feel like you are really bringing to the table and delivering at the end of the day, and what other partners in the process are expected to bring to the table and deliver at the end of the day, and have an idea of the relative value of those things for YOUR project, before you can make any deal that makes any sort of sense at all.

Lot of things to think about... thanks for the information. Maybe the basic budget should cover the time each of us is working on the project. So lets say, all the travel and living expenses for the time of shooting and then X ammount of money for the time I work on the post by myself. Then the potential sales profits could be just split 50/50, I don't care about that so much since he is still as important part of the film as me since he's the subject.

Or budget only for the travel and living expenses, then each of us could count the hours we work in the post and give them X ammount of value for a hour and take those money away from the profits before starting to split it to 50/50.

 

[Marc Wielage]

Get a lawyer with entertainment law experience -- quick. And I would find a representative to sell the film to a distributor first before shooting it. Cable, foreign, domestic, home video... all of these are great potential markets, but the biggest question the distributor will ask you is "what audience wants to see this film?" Based on that, they can figure out potential grosses, percentages, and budgets.

Major film festivals are packed with representatives and agents who will handle these deals for you, but there's always a degree of hustle that you need to get through to them. I've seen some good indie films fall by the wayside and fail to find distribution, and a lot of that happened because they didn't make those negotiations first, going in before a frame of footage was shot.

 

[Yaque Silva-Doyle]

Profit on a documentary......... Well if you are lucky enough to make some profit it seems that there has been some great advice given by people here especially Graig. I might suggest two things;

1. This will take much longer and cost a lot more than you think.
2. It is possible that you may want to look at the ramifications of paying your Documentary subject. At this point some of the objectivity has been compromised. It is not wrong by any means just something to think about. Also being realistic with everyone involved regarding their expectations of time, costs and the potential for profit.

 

[Emanuel A.]

entertainment law(yer), Marc wrote ;-)

entertainment law(yer), Marc wrote ;-)

Traditional basic fifty fifty might be a possibility -- what happens without contract, call it homework though

but...

I'd budget it with the differents assets to come: time spent, nature of the labor (he is the athlete, therefore the subject itself but you have a price for each department you'll perform such as writer, producer, director, editor and so on), cost for different gear used, etc. All (fair) market prices.

Other way would be to weight the frames or length of footage used at the final cut but that would probably mine all the editing options. Your argument to convince the other party to accept the leftover.

In the end, the budget percent shall become substancially different, will decidedly look professional and increase its value (too much important to be neglected), being bigger -- assets, whether time in equipment used whether time in labor, are (real) money to count.

It will definitely be (more) fair and you won't look back or regret yourself to be picky Do it through a signed agreement in form of contract not only before to shoot, but prior to any sort of pre-production if you haven't started yet.

Last but not least, your share (investment) over the budget will determinate the profit per each party. To rule out as 50/50 after to deduct the expenses is not part of this business, if the parties get the meaning of it

 

[Craig Parkes]

As they are red bull sponsored its worth noting that Red Bull has a pretty enormous media team, which means they have a tendency towards owning the events they sponsor and the sports movie they sponsor. You may have luck pitching them the idea of the doco, but don't be surprised if they cam back with a plan that unvolves them owning it completely.your role as director then may be much more dependent on your existing portfolio and your relationship with the athlete. On the plus side if you got it off the ground in that fashion it would be on their dime, and you won't have to worry about this revenue stuff so much.

In regards to the budget, it doesn't pracically wok that way with independent ocos. Its much more like this - We can raise "x" dollars, those dollars mean we can shoot for "y" days with this gear and crew in this location, "z" days over here, and have "a" dollars left for airfares. You can just spitball the amount of cash you think ou can raise, run the numbers, and if it doesn't give you enough shooting days and travel ime and enough left or post and deliverables (50% of the budget or more potentially) then you pjust keep pluging in higher numbers until you reach a number of days and amount of travel that you think is viable.

Its much better workng back from a goal figure, maybe doing three or four budgets based on different amounts you think you can raise or recoup, because then you can talk to distributors, sales agents and sponsors and confidently say for x, you can get y, but for w, you can get z.

With only 1 budget worked out in advanced you will be facing how o s ale own your film potentially in the middle of negotiations, which will make for a weaker position as you scramble, or worse you might face a situation where you are pitching an amount that is impossible for a distributor to recoup and financiers don't even try and negotiate a lower budget with you, they just knock you back on that alone.