05.22.07
Contingent Compensation - Profits Participation
Elements of a Contingent Compensation (Profits Participation) Deal
A contingent compensation deal is one in which a participant in the film receives a
percentage of the revenues made by that film in addition to, or in lieu of, their fixed
payment. There are four main elements that might have to be taken into account in
determining the payment due under such schemes:
• gross receipts
• distribution and sales fees
• distribution expenses
• cost of production
Before entering into a contingent compensation deal, it is imperative that all parties
understand precisely the terms of that deal and that the contracts are crystal clear and
agreed by all parties.