What does Profit Participation mean?
Profit Participation refers to a contractual arrangement where key individuals involved in a film or TV production, such as actors, directors, or producers, receive a share of the profits once the project earns more than its production costs. Profit participation allows these individuals to benefit from the financial success of the project beyond their initial salary. The specifics of profit participation deals can vary, with some agreements based on gross revenue (before expenses) and others on net revenue (after expenses).
Example:An actor negotiates a profit participation deal that entitles them to 5% of the net profits from a blockbuster film once it recoups its production budget.
Example: A director agrees to a profit participation deal in addition to their salary, earning a percentage of the gross revenue generated by the movie after its release.
Did You Know?
Profit participation deals can be incredibly lucrative, with top stars earning millions in bonuses from a film’s success!
You can also find “Profit Participation” and related terms in this category: Contracts and Agreements.
