In setting forth the production costs of a film, do you include profit sharing bonus to talent? Such was todays unique question of the day. i know for many of you this will be dry, but you must remember the production budget dictates what Union contracts your production will be subjected to and needs to be fully considered when preparing the budget There is a vast difference between two very similar phrases. Film Production Costs accrued during production and total cost of the film as defined in CFR for example at 1.181 et seq. In the former situation what we have is a phrase that connotes the cost of making a film from development up through the post production. This by definition does not include such costs as theatrical rental, distribution costs, profit sharing( either bonus or contingent deferral) etc. These latter items may be included in a waterfall that discusses film revenues from all sources, from which you would deduct distro costs,theatrical costs,PA, other similar expenses like sales agent costs, and of course shareholder distribution and profit sharing with talent.The latter is generally deducted from a portion of Production team profits and is not a Film Production Cost 26 CFR 1.181 for example includes costs that have been incurred such as SAG residuals that are paid through production,compensation that is owed or accrued during production and other such expenses accrued prior to the release of the film but not costs that are generated after release and may arise from profit sharing, distribution or such. My authority for this definition is above stated and is supported as below and §§ 1.181-2 through 1.181-6, the term production costs means all costs ...that are paid or incurred by an owner in producing a production...prior to its initial release or broadcast....
Posted on: Mon, 06 Oct 2014 06:08:01 +0000
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