DISTRIBUTION DEAL NEGOTIATING POINTS

	By John W. Cones, Attorney


	(1)  Guarantee--If an acquisition deal, seek a guarantee from the distributor which
allows the producer and/or its financier/investors to recoup a significant portion
of the film's production cost within one or two years of the film's theatrical release.
 If a negative pickup deal, ask for a guarantee that a specific sum of money will
be paid to the producer upon delivery.

	(2)  Domestic Theatrical Release--Provide for a domestic theatrical release for
the picture and to release the film in its domestic theatrical release in a specific
number of key cities or markets.

	(3)  Prints and Advertising Commitment--Seek a commitment from the distributor
to provide a specific dollar amount for advertising for the picture along with a
specific minimum number of prints.

	(4)  Trailer Commitment--Obtain some form of commitment, even if just a "best-efforts"
commitment to see that the film's trailer is exhibited a minimum number of times.

	(5)  Cap on Distribution Expenses--Limit the expenditures of the distributor to
a specific amount not to be exceeded without the written consent of the producer.

	(6)  Marketing Campaign Approvals--Provide for approval rights of the producer
for the marketing campaign prepared by the distributor.

	(7)  Distributor Editing Rights--Limit the distributor's right to edit the picture
to only circumstances required to meet government censorship requirements and/or
MPAA rating requirements; otherwise only with the approval of the producer.

	(8)  Direct Expenses--Limit the distributor's recoupment of its distribution expenses
to 100% (not more than 100%) of its out-of-pocket expenses occurring as a "direct"
result of its distribution of the picture; i.e., not permitting overhead, facilities
allocations or other similar charges to be deducted by the distributor as distribution
expenses.  Distributor overhead should be paid out of the distributor's fees just
as in any other business.

	(9)  Net Receipts--If the distributor insists on deducting its distribution fees
and distribution expenses (however defined) prior to any revenue sharing with the
producer and or others, provide that the producer/investor group receive 100% of
net receipts after the distributor has deducted its distribution fees and expenses.

	(10)  Incremental Bonuses--Negotiate a specified bonus for the producer/investor
group for every increment of film rentals or gross receipts that exceed agreed upon
levels of revenue.

	(11)  Distribution Fees--Provide reasonable distribution fees in each market.

	(12)  Distributor Approvals--Limit distributor approvals to the producer, director,
shooting script, budget and principal members of the cast along with a mechanism
for dealing with necessary changes.

	(13)  Ownership--Provide that the producer owns the copyrights to the picture,
that certain limited rights are merely being licensed to the distributor.

	(14)  Outside Service Agreements--Require that any distributor negotiations and
agreements with sub-distributors, controlled theatres, video companies, outside
advertising agencies and other individuals or entities providing support services
to the distributor be conducted in an arm's length manner or that distributor fees
in such situations be reasonable considering the special relationships involved.

	(15)  Distributor Allocations--Require that any distributor allocations for purposes
of cooperative advertising, film packages including the picture, co-features or
other similar arrangements be based on an objective standard negotiated in advance
and set out in the distribution agreement.

	(16)  Producer Audit Rights--Provide that the producer has broad auditing rights
with respect to auditing the distributor's distribution of the picture.  Check with
a profit participation audit firm in advance of signing the distribution agreement
to determine what language in the distribution agreement would provide the auditor
with the most freedom to conduct a useful audit.  Hire the audit firm to review
the distribution agreement before signing.

	(17)  Sub-Distributor Fees--To the extent that the distributor utilizes the services
of a sub-distributor, see that such sub-distributor's fees are paid by the distributor
out of its distribution fees and not in addition to its distribution fee.

	(18)  Foreign Sales--Provide that the distributor not effect outright sales or
other flat fee arrangements of the picture in the top seven foreign theatrical markets.

	(19)  Foreign Taxes--To the extent that the distributor actually pays any gross
receipts or similar taxes in any foreign country based on the exhibition of the
picture and subsequently deducts the payment of such taxes from the film's revenues
as a distribution expense, provide that the producer/investor group be credited
with any available U.S. federal tax deduction based thereon.

	(20)  Dues and Assessments Cap--Negotiate a cap on the payment of dues and assessments
paid by the distributor to industry trade associations to which it belongs.  Create
a producer association that also receives such monies.

	(21)  Interest--With respect to interest charges and to the extent that the distributor
provides any portion of the production financing for the picture (1) seek to apply
first monies received by the distributor towards the distributor's recoupment of
its production costs instead of first applying such monies to the distributor's
fees and distribution expense recoupment so as to minimize any interest charges
on the negative cost of the picture; (2) eliminate all but direct distribution costs
as distribution deductions so as to avoid the payment of interest on indirect distribution
expenses and (3) provide that no interest shall be paid by the producer/investor
group on distribution expenses accrued but not yet paid for purposes of any interim
participation statements.

	(22)  Gross Floor--Negotiate a minimum level of backend participation (gross floor)
for the producer/investor group in the picture's revenue stream regardless of the
number or amount of distributor or other deductions from gross receipts.

	(23)  Release Window--Get the distributor to commit to release the picture within
a specified period (e.g., 60-90 days) after delivery of the picture to the distributor.

	(24)  Cross-Collateralization--Provide that the distributor will not cross-collateralize
the financial performance of the picture with the financial performance of any of
the other films being distributed by the distributor in any manner.

	(25)  Conflicting Films--Obtain commitments from the distributor not to distribute
other movies during the picture's domestic theatrical release that are so similar
to the picture that such distributor activities would likely distract from the distributor's
commitment to support the picture.