Wednesday, December 24, 2008

Film Deferrals

Deferrals are an essential part of independent filmmaking. Independent films are usually cash poor so any opportunity to broker a deal in which cast or crew or a vendor defers out all or part of their pay is a blessing. In a deferral deal, cast or crew or a vendor agrees to defer all or part of their pay until the production has the money to pay them or the film sells. 

There are any number of reasons why cast or crew members or vendors would agree to defer their pay. Perhaps the cast or crew are friends with the filmmakers and they want to help the production be a success. The philosophy of "my success is your success" is alive and well in indie filmmaking. I absolutely remember everyone who has helped me along the way, and I have every intention of rewarding their support with paid gigs or referrals to other opportunities in the industry. Or maybe they will need my help on one of their future productions. There is a lot of stiff competition in Hollywood and deferral jobs can help cast or crew members or companies meet new people who may one day bring them the opportunities they are seeking. 

There may also be incentives linked to a deferral deal that the cast, crew or vendors find appealing. Perhaps a piece of the back end profits are given in exchange for deferring pay. Or maybe the total amount paid will be higher in a deferral deal than if they were paid during the job. For example, Joe may get paid $500 a week during the job, but if he were to agree to a deferral deal, perhaps he is paid $300 a week and then an additional $700 a week is deferred out. In the deferral deal, Joe can make twice the amount of money -- assuming the film sells. It's a gamble on Joe's part but maybe he likes gambling for the opportunity to earn twice the amount! 

Producers may also use deferral deals to help garner higher quality crew. Perhaps the pay they can afford to offer is low for the caliber of crew they are seeking. The producer may decide to sweeten the deal for crew by offering a deferred bonus in the hopes the more experienced crew will be willing to work for slightly less pay if they know they will get a bonus down the road. 

Oftentimes, deferrals can make up the largest portion of a film's budget. Crew pay on a small budget can easily be $100k, so it's important to a micro-budget to defer out as much as possible. Also, vendors can bring extremely costly services, like equipment, catering, film developing, or color correction for deferred payment. It's not easy finding vendors willing to do a deferral deal but it's not impossible. I have successfully negotiated deferral deals with vendors. It just takes time and patience but it can be done. In fact, much of my time is spent creating relationships with crew and vendors who are open to deferral deals. I couldn't get my films made as well -- or at all -- without them. 

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