The production company, being a small production company without capital in the theatrical film sector, naturally finds itself at a disadvantage when facing distribution companies.
This is determined by the industry chain and industry ecology, and the advantage of being foresighted cannot be offset.
Ronan pondered for a moment and asked, "Could you elaborate?"
Navas roughly explained, "For distribution commission only, it's a 40% cut of total revenue. For the latter option, it's a 25% cut of total revenue, with additional costs deducted separately for film promotion, distribution, copying, management, transportation, and insurance."
Ronan sighed inwardly, "Everyone's the same, after all, all black."
The production company scams investors, and the distribution company scams the production company.
The price offered by Navas was basically no different from Sony Entertainment.
Of course, Navas didn't outright accept or refuse, unlike Sony Entertainment.
Negotiations have to happen to make any progress.
Instead of choosing, Ronan directly targeted Lionsgate's weakness, "Mr. Navas, from what I know, Lionsgate lacks overseas distribution capability."
This point couldn't be denied, Navas admitted, "Yes, Lionsgate is currently establishing overseas distribution channels." He added, "I was referring to the North American market."
Ronan seized the weakness of the other party and relentlessly pressed on, "My goal is global distribution. Solely focusing on North American distribution means I'll have to find overseas distributors again later, which means more work and possibly larger costs."
He cleverly turned the unfavorable fact into his negotiation capital: "This doesn't meet my needs."
Navas looked at Ronan, trying to glean something from his expression.
Ronan adeptly turned the disadvantageous fact into his bargaining chip: "I had a discussion with Mr. Chris from Sony Entertainment two days ago. Sony Entertainment offers a 30% cut for North American distribution of this film and also handles international distribution."
This was also telling Navas that "The Human Eradication Plan" wasn't without interest.
Navas didn't falter because of this. Instead, he said, "Lionsgate's strategy is to focus on horror films, and the company's resources are currently leaning towards horror films." He smiled confidently, "Regarding distribution channels, Lionsgate can't compare to Sony Entertainment, but, Mr. Anderson, how many films does Sony Entertainment release in a year? They won't invest much in your film."
Before Ronan could respond, Navas continued, "Lionsgate only released one film, 'Lolita,' last year and is planning to release only two to three films today. The company's investment in each film can't be compared to those smaller projects released by the big companies."
Ronan improvised, "Sony Entertainment promised to get 'The Human Eradication Plan' into theaters this year to allow Sandsea Entertainment to recoup funds quickly."
Of course, the quicker the funds are recouped, the better, as time is also a costly factor.
Navas was well aware of this and stated directly, "Lionsgate hasn't released any films recently. 'The Human Eradication Plan' is already completed, and Halloween is almost three months away. If we quickly reach an agreement, Lionsgate can fully promote this film and get it into theaters by Halloween."
This was almost like tempting Ronan to give in.
To produce a big-budget film from post-production to promotion to release could take more than six months, but for a film like "The Human Eradication Plan," two to three months would suffice.
Of course, Hollywood's pace of operation for films is much slower compared to Hong Kong films in the past.
Ronan spread his hands, "A 40% cut of total North American revenue for distribution is too high, and there's no overseas distribution!"
Navas could tell that Ronan had chosen the first option and said, "Lionsgate is very sincere."
Is sincerity just talk? Ronan sneered inwardly.
He chose to have a 20% cut of total revenue for box office returns and demanded Lionsgate invest at least $800,000 in North American promotion for the film, with other ancillary rights income calculated separately.
He added after some thought, "For publicity considerations, the public cost of the film is $11 million."
The remaining negotiation was just haggling.
What followed was a five-day tug-of-war negotiation. Navas's side added two negotiation experts, while Ronan brought Robert and George Clint to form a team to respond.
After countless rounds of negotiation, the two sides finally signed the official North American full copyright distribution contract on August 20th.
Lionsgate would take a 28% cut of the total box office revenue for "The Human Eradication Plan" in North America, with all distribution costs factored in. Lionsgate also promised to invest no less than $500,000 in North American promotion for the film.
As for ancillary rights, Lionsgate would take a 20% cut from the film's videotape, disc, new media, and television rights, and 50% of total revenue from film-related products.
Taking a 50% cut of film-related product revenue is the industry norm.
In addition, Sandsea Entertainment would bear the audit fees resulting from the financial transactions between the two companies.
Even with all of Ronan's efforts, he couldn't change the fact that the distributor held the absolute advantage.
However, what made him slightly relieved was that "The Human Eradication Plan" was now moving into the promotion and distribution phase.