Lyman sat quietly on the sofa, calmly surveying his surroundings. This was a suite in a hotel, and at this moment, all the windows were tightly covered by curtains, blocking any light from coming in. In front of him was an elegant wooden coffee table, and behind the table hung a small silver screen, playing the movie "Buried".
On the sofa to his right, bald-headed Armand sat with two colleagues, engrossed in watching the film. And on his left sat René. Thomas didn't come this time. He had a more important task to continue screening the movie at that intersection, attracting more film buyers' attention and making them compete against each other.
It turned out that having real moviegoers as a backdrop was indeed advantageous. Yesterday afternoon's screening attracted two interested buyers: Fox Searchlight and Focus Features. In today's commercialized society, people wouldn't pass up any profitable project. And "Buried" was like bait thrown into the sea, attracting all sorts of fish and shrimp. They had a big appetite and wouldn't even miss the appetizers.
As the screening progressed, it reached its climax. When the scene of Heath Ledger being buried alive appeared, the movie ended. Lyman approached, tidying up the film copy, while Armand went to the window and pulled the curtains, allowing this sealed suite to embrace the light once again.
"Director Lyman..." Armand was about to speak, but one of his colleagues interrupted him, saying, "Can we discuss something privately, sir?"
"Of course." Lyman walked towards the door, and René, with keen insight, followed him. Maximizing profits depended primarily on the quality of the film. As long as these film buyers thought it was workable and were willing to pay the price, this game could continue. Otherwise, no matter how much was said, it wouldn't matter. They were businessmen, and businessmen were most concerned with their own interests.
After leaving the suite, Lyman and René waited in the corridor outside.
"Fox Searchlight also brought a screening team." Lyman hadn't gone to the screening site yesterday; he had stayed at the hotel, pretending to meet people. The information came from the report given by René and Thomas when they returned.
René continued, "They invited us to meet this afternoon, and so did Focus Features. Which one should we go to first?"
"Let's go to Fox Searchlight first and see how things go from there. Right now, we have the initiative." René nodded, fully agreeing with Lyman's point of view.
Outside the suite, the two continued to discuss their future operational plans, while Armand and the others exchanged their respective opinions.
"Not bad, it has some distribution value." The first to speak was a man with chestnut-colored short hair, also the one with the most authority among the three. "However, this film has a limited audience. Such a strong experimental style will inevitably exclude a large number of viewers."
The other person also agreed and echoed, "The entire film revolves around a single main character, and there are no scene changes. It's indeed innovative, but innovation also means risks."
"True, so we need to carefully consider at what price we should acquire it," the man with short hair spoke again.
"How about €1.7M?" the last man to speak continued, "The director has handled the film well, and the narrative has a good pace. The market audience is small, but it should still have a box office of five to six million. If we offer €1.7M, it won't be a loss."
"But the initial offer was already at this price, and now other distributors have set their sights on the film. It's impossible to expect a low-risk bargain." Armand, who was in the loop, poured cold water on his colleagues.
The man with short hair pondered carefully and said, "If we negotiate, let's start with an offer of €1.8M and see how things develop. Our bottom line should be around €2M. Do you understand what I mean?"
After deliberation, the three quickly reached a consensus. "Understood."
When Lyman and René returned to the suite, the wooden coffee table had been moved, creating more space for discussions. The two representatives from EuropaCorp were already seated, and after Armand entered, he sat down beside them. Lyman and René took seats on the opposite sofa.
"Gentlemen, EuropaCorp and I are very interested in your film "Buried" and have the intention to release it in theaters," the man with short hair continued, "We have great sincerity in this cooperation, but the specific terms need to be agreed upon by both parties. So, what are your conditions?"
Using a good strategy of retreat to advance, no wonder you're the leader among the three.
But Lyman wasn't someone to be taken lightly. He immediately retorted, "Gentlemen, we spent a total of €1M to produce this film, not to mention the subsequent costs of participating in film festivals. The investors need to see returns, and the return on investment should at least be higher than putting money in the bank. Moreover, considering that other distributors have shown interest in this film, it indicates that many people have high hopes for it. We don't lack buyers, but considering that EuropaCorp is also based in France, I personally am willing to entrust the distribution to your company. So, if you can offer €3M for the acquisition, I believe there is an 80% chance of securing the film."
After a long string of analytical statements, Lyman was starting to feel tired, but it was effective. The three opposite him were already deep in thought. "€2M is our bottom line," Armand timely intervened.
Lyman pretended to struggle and contemplate for a while before speaking, "Well, it's not impossible, but we would change it from an outright purchase to distribution rights plus a certain share of the box office." Generally, for independent films like this, film buyers tend to prefer outright purchase agreements, where they can keep all the subsequent profits no matter how they operate. Involving profit-sharing also means considering distribution and marketing costs, which to some extent, limits their freedom.
The man with short hair chuckled lightly without giving a clear refusal. "€1M for distribution rights and then a 10% dividend, provided that the film's box office performance exceeds €6M."
What a cunning fox, Lyman thought. What's the difference between this condition and the previous one? They reduced the acquisition fee by 1 million for a mere 10% share, which is calculated based on total profits, and it even has a prerequisite for box office performance; otherwise, it won't take effect.
"I'm sorry, but I find your conditions too demanding."
"Well, then, I'm sorry as well, gentlemen. That's the best offer we can provide." In the end, the two sides couldn't reach a consensus. Lyman smiled, exchanged pleasantries, and left the hotel with René.
The representatives from EuropaCorp didn't attempt to persuade them to stay. They knew that the second round of offers just now had a bit of a self-deceptive flavor, but they never intended to negotiate the terms of profit sharing. In their minds, they definitely wanted to acquire the complete distribution rights to the film through an outright purchase. Besides, they had already shown their bottom line, and now Lyman could negotiate with other distributors and see their offers. They wanted to have a clear picture.
The battle for the distribution rights of "Buried" had only just begun, hadn't it? The exchange with EuropaCorp had taken less than half an hour, but they had already grasped some of the other party's intentions.
As Lyman walked on the road, he was well aware of what he wanted. He also knew that the separation just now was only the first round of the game. Everyone was trying to negotiate for better conditions, and there was nothing to say about that. It all depended on individual abilities.
The offer of €1M for the rights, along with so many conditions, was clearly a way to reject the negotiations. Lyman understood that, so he left.
Generally speaking, the revenue generated after a film's release would largely fall into the pockets of three parties: the theaters, the distributors, and the producers. Theaters always took a similar share, leaving the rest to be determined by agreements between the distributors and the producers. But in any case, a 10% share of the profits was an unreasonably low condition.
After deducting various taxes and expenses, on average, theaters could take about 40% of the box office revenue. The remaining 60% would be shared between the distributors and the producers. In general international distribution practices, the distributor's share would range between 30% and 40%, while the rest would go to the producers. Among the producers' share, it would be divided into two parts—one for the production company itself and another for the cast and crew members, including the director, actors, and screenwriters.
For example, if a film generated revenue of €1M, the theaters would take €400,000, the distributors would take €200,000, and the producers would take €400,000 to be shared with the cast and crew.
Of course, these percentages are just rough estimates, and the specific percentages would vary depending on the agreements signed for each project. Particularly regarding the cast and crew, if A-list actors were involved, the profit-sharing ratio would certainly be higher. If a renowned director like Steven Spielberg was also involved, the percentage demanded by the cast and crew alone could be as high as 40% or even half of the net profit. In that case, the income distribution among the other three parties would naturally be adjusted accordingly.
What EuropaCorp proposed just now was clearly a refusal to discuss profit-sharing matters and indicated their stance on the issue. However, Lyman didn't mind. If they didn't want revenue-sharing, then the outright purchase price had to be high; otherwise, they could negotiate revenue-sharing. It was a straightforward multiple-choice question - choose the option that offers the higher value.