The typical underwriting process for a film begins with a kickoff meeting to discuss a prospective film's script and market comparables of historical releases. This meeting operates in a similar fashion to an investment committee meeting and is led by a small group of internal stakeholders including senior creative, marketing, and finance leaders. After the script is read and discussed, members in the underwriting meeting give their thoughts on where they see domestic and foreign box office landing for conservative, base, and high cases. 

To conclude the meeting, the head of film will note the following to set up the financial analysis of the film:

• Deal structures and terms being negotiated with potential distribution partners

• Budget

• Talent backend considerations

Coming from that meeting, content strategy or finance teams will start building a greenlight model to forecast the financial performance of the film for each respective case and deal structure. There are many different deal structures for theatrical film investments outside of a distributor directly producing a film and releasing it though its own distribution network. The following represents a high level overview of the different ways film deals are cut:

• 50/50 Cofi - partner with a distributor and share profits 50/50 after studio recoups P&A spend and distribution costs

• Co-Financing Agreement - invest in a film for a minority stake and a studio charges a distribution fee

• Worldwide Presale - sale of all territories and receive upfront MG that covers budget + premium and entitled to overages if profits are seen after a large distribution fee and interest on MG

• Domestic Co-Fi and Foreign Presale - 50/50 co-if on domestic profits and sell international territories for a MG and the opportunity to capture overages after a distribution fee and interest

• SVOD or Streaming Sale - Sell to a streamer for a MG; usually MG is derived by determining what it would have to be in order to achieve a similar level of profitability as a theatrical release when you factor in reduced costs by not having a theatrical release

The results of the greenlighting exercise are presented to the underwriting committee to determine whether or not to greenlight a film.

The typical underwriting process for a film begins with a kickoff meeting to discuss a prospective film's script and market comparables of historical releases. This meeting operates in a similar fashion to an investment committee meeting and is led by a small group of internal stakeholders including senior creative, marketing, and finance leaders. After the script is read and discussed, members in the underwriting meeting give their thoughts on where they see domestic and foreign box office landing for conservative, base, and high cases. 

To conclude the meeting, the head of film will note the following to set up the financial analysis of the film:

• Deal structures and terms being negotiated with potential distribution partners

• Budget

• Talent backend considerations

Coming from that meeting, content strategy or finance teams will start building a greenlight model to forecast the financial performance of the film for each respective case and deal structure. There are many different deal structures for theatrical film investments outside of a distributor directly producing a film and releasing it though its own distribution network. The following represents a high level overview of the different ways film deals are cut:

• 50/50 Cofi - partner with a distributor and share profits 50/50 after studio recoups P&A spend and distribution costs

• Co-Financing Agreement - invest in a film for a minority stake and a studio charges a distribution fee

• Worldwide Presale - sale of all territories and receive upfront MG that covers budget + premium and entitled to overages if profits are seen after a large distribution fee and interest on MG

• Domestic Co-Fi and Foreign Presale - 50/50 co-if on domestic profits and sell international territories for a MG and the opportunity to capture overages after a distribution fee and interest

• SVOD or Streaming Sale - Sell to a streamer for a MG; usually MG is derived by determining what it would have to be in order to achieve a similar level of profitability as a theatrical release when you factor in reduced costs by not having a theatrical release

The results of the greenlighting exercise are presented to the underwriting committee to determine whether or not to greenlight a film.