Glossary

The language of film finance.

Plain definitions of the terms that decide how films get made, funded, and sold. Each one links to a fuller explanation and to the guides that put it in context.

A B C D E F G H M N O P Q R S T

A

Above the LineAbove the line refers to the creative leadership costs of a film, usually negotiated before production begins.

B

Back-End ParticipationBack-end participation is a share of a film revenue or profit that a participant receives after the film begins to recoup, rather than as an upfront fee.Below the LineBelow the line refers to the technical crew and operational costs of actually making a film.Bond CompanyA bond company, or completion guarantor, is the party that issues a completion bond guaranteeing a film will be finished and delivered.

C

Chain of TitleChain of title is the documented, unbroken record of who owns the rights to a film and everything in it, from the underlying material through the finished picture.Collection Account ManagementCollection account management is a neutral arrangement that receives a film revenue and pays it out to each party according to the agreed recoupment waterfall.Completion BondA completion bond is a guarantee from a bond company that a film will be finished and delivered on schedule and on budget, or that the financier will be repaid.ContingencyA contingency is a reserve built into a film budget to cover unexpected costs during production.Cross-CollateralizationCross-collateralization is a deal structure in which the revenue and costs of multiple territories, titles, or windows are pooled so that shortfalls in one are offset by surpluses in another.

D

DefermentA deferment is a fee that a participant agrees to postpone, taking payment later out of the film revenue instead of upfront.

E

Equity FinancingEquity financing is money invested in a film in exchange for an ownership position and a share of any revenue it earns.Errors and Omissions InsuranceErrors and omissions insurance, or E and O, protects a film against claims of copyright infringement, defamation, and similar issues.

F

First PositionFirst position describes the party with the highest priority claim, whether a lender that recoups first or a rights holder whose interest ranks ahead of others.

G

Gap FinancingGap financing is a loan made against the estimated value of territories or rights a film has not yet sold.

H

Hard MoneyHard money is film capital that must be repaid on commercial terms, such as equity and interest-bearing debt.HoldbackA holdback is a contractual restriction that prevents a film from appearing in a particular medium or territory until a set date.

M

MandateA mandate is the defined scope of authority and criteria that a producer grants to a sales agent, or that a capital provider publishes to describe what it backs.Mezzanine FinancingMezzanine financing is capital that sits between senior debt and equity in the recoupment waterfall, carrying more risk than senior debt and a higher cost.Minimum GuaranteeA minimum guarantee, or MG, is the floor amount a distributor commits to pay for the right to release a film in a territory or on a platform.

N

Negative PickupA negative pickup is a deal in which a distributor agrees to buy a finished film for a set price on delivery, letting the producer finance production against that commitment.

O

Option AgreementAn option agreement gives a producer the exclusive right to develop existing material for a set period before deciding whether to buy the rights outright.

P

Pre-SalesA pre-sale is a contract in which a distributor agrees to pay for the right to release a film in a territory, often before the film is finished.

Q

QuitclaimA quitclaim is a document in which someone gives up any claim they might have to a film underlying material or rights.

R

Recoupment WaterfallThe recoupment waterfall is the agreed order in which each source of capital is paid back from the revenue a film generates.ResidualsResiduals are ongoing payments made to talent and crew, usually through their guilds, when a film earns from reuse across additional markets and windows.

S

Sales AgentA sales agent represents a film to buyers across territories, using a mandate from the producer to license rights on the film behalf.Sell-ThroughSell-through is the sale of a film directly to consumers to own, such as a digital purchase or a physical copy, as opposed to a rental or a licensed stream.Soft MoneySoft money is the umbrella term for grants, subsidies, and incentives that do not carry commercial repayment terms.

T

Tax CreditA film tax credit is an incentive that reduces the tax a production owes in a jurisdiction, based on qualifying local spend.TerritoryA territory is the geographic area a distribution deal covers, often a single country or a defined region.

Film industry guidesIn-depth hubs on financing, incentives, rights, distribution, and production.

These definitions are educational and do not provide financial, legal, or tax advice. Consult your own licensed advisors before acting. FILM.FUND is a software and workflow platform, not a broker-dealer. It never handles money, never holds securities, never takes a percentage of any raise or sale, and never predicts returns.