FREQUENTLY ASKED QUESTIONS
SOVEREIGN PROPOSAL
How does Sovereign work?
Premiere Picture works with high net worth individuals who trade feature film rights for profit through the Sovereign rights trading structure. Premiere Picture can arrange for a number of sole traders to buy territorial rights in a film from a producer for an agreed amount or “Purchase Price”. The Sovereign sole traders will then sell these rights on to a distributor (which could be a related company to the producer) and retain a share of revenues.
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How is the Purchase Price calculated?
The total Purchase Price is usually equivalent to the sum of the “Take” prices (ie the low estimates) given by the sales agent for any unsold territories in selected feature films, less a small discount subject to valuation.
Premiere Picture will arrange for a valuation of the available unsold territories in suitable films, based on sales figures from the sales agent, future revenues estimates and other supporting data. Based on the valuation, Premiere Picture will agree the Purchase Price with the producer on behalf of the Sovereign sole traders.
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What is the net benefit to the producer?
The net benefit (after fees) is normally up to 13% of the Purchase Price. As the availability of rights will vary from film to film, the net benefit may also vary. As an obvious rule of thumb, the more territories sold the higher the net benefit could be.
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What are the Sovereign recoupment terms?
Sovereign sole traders take a variable corridor in perpetuity from first dollar (after standard sales and distribution commissions) from the territories they trade. The size of the corridor is negotiable but can initially be quite small. Once the sole traders have fully recouped, the agreed corridor may be reduced, subject to negotiation.
Please note: As the sole traders are not working in partnership, it is important that their income streams are NOT cross-collateralised or pooled in any way.
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What are the costs?
Third-party professional fees and costs including those for legal advice and banking charges will be charged to the producer.
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Does Sovereign work with pre-sales?
Under certain circumstances, Sovereign sole traders can purchase pre-sold territories on the basis that they will receive a share of all revenues derived from such territories (including from MGs), subject to contract. This would normally reduce the amount a bank will lend against those territories. Alternatively, Premiere Picture can exclude pre-sold or unsold territories from their purchase to allow producers to maximise the potential lending from pre-sales. However, this would reduce the overall contribution from Sovereign sole traders.
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Does Sovereign work with gap or sales advances?
Sovereign sole traders can work with gap and sales advances, on the basis that they are able to take a small corridor whilst the lender or sales agent recoups. Most banks and sales agents will allow this. Premiere Picture may be able to arrange suitable gap financing if the existing proposed financiers are not prepared to allow the necessary corridor.
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What other types of financing work with Sovereign?
Sovereign financing should be compatible with most other forms of financing including the UK tax credit, other forms of soft financing, regional financing, post production deals, commercial equity and some UK tax-based equity schemes.
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MEDIA PRO
What is Media Pro?
Through Media Pro, Premiere Picture works with high net worth individuals who agree to join together in partnerships which trade by providing production and P&A services expenditure to films. Premiere Picture can arrange for one or more partnerships to provide as such to a film in exchange for a suitable share of income derived from the film’s exploitation.
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What is the Agreed Budget?
Obviously the scope of services requiring input from a Media Pro partnership will vary on a film-by-film basis.
As a general rule, Premiere Picture will arrange for a valuation of the available territories in suitable films, based on sales figures from the sales agent, future revenues estimates and other supporting data. Based on the valuation and services potentially required as advised by the producer, Premiere Picture will recommend and agree a budget (the “Agreed Budget”) with the producer and the relevant Media Pro partnership(s).
The Agreed Budget will outline the services and associated costs and any contribution required from Media Pro.
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What is the net benefit to the producer?
The net benefit (after fees) is normally up to [9]% of the Agreed Budget.
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What are the Media Pro recoupment terms?
Media Pro partnerships will need to demonstrate that they are trading with a view to profit from their trade. Recoupment terms are negotiable and would expect to recoup the Agreed Budget from revenues. As a general rule, any net benefit will be expected to be recouped in a priority position behind any senior debt on at least a pro rata pari passu position with other hard equity. The Media Pro partnerships will also require a subsequent corridor from the waterfall in order to recoup the rest of the Agreed Budget, subject to the valuation and negotiation.
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What are the costs?
A fee of 3% of the Agreed Budget will be payable to Premiere Picture.
Third-party professional fees and costs including those for legal advice and banking charges will be charged to the producer.
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Does Media Pro finance work with other types of financing such as gap or sales advances?
Media Pro should be compatible with most other forms of financing including senior and mezzanine debt, such pre-sale, tax credit and gap lending, sales advances, other forms of soft financing, regional financing, post production deals, commercial equity and some UK tax-based equity schemes.
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GENERAL REQUIREMENTS
What credits does Premiere Picture require?
As a guideline, Premiere Picture will require a company credit and two executive producer credits in the main titles for the film. Other Premiere Picture staff will require to be credited in the end titles.
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Does the project need to be within a particular budget range?
No, Premiere Picture can contribute to projects with a range of budgets, although we are currently looking for projects with budgets up to $25 million dollars.
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Does the project need to be British qualifying?
No. Our primary criterion is commerciality.
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Does the project need to go in to production at a particular time?
No. We will consider productions shooting at any time of year.
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How much finance do I need to have in place before applying?
Premiere Picture will consider projects from reputable producers at all stages of the financing process. However priority will be given to projects with at least 75% of their finance secured.
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How do I apply?
Suitable projects are sourced, assessed and recommended to Premiere Picture Ltd, acting on behalf of the sole traders and partnerships, by Premiere Picture Productions Ltd. In the first instance producers should therefore contact Premiere Picture Productions Ltd.
Producers will be expected to provide acceptable due diligence documents, including chain of title, sales figures from a reputable international sales agent, cast and talent commitment letters, finance plan, proof of other financing and completion guarantor commitment.
The emphasis for producers will be to demonstrate the commerciality of their film to Premiere Picture. Endorsements from established industry representatives such as reputable sales agents and distributors would normally be required.
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