Entertainment Jargon

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Above-the-Line:

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Motion picture costs that relate to the acquisitionof rights and payments to Talent and the producer.

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Adjusted Gross Receipts

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Generally means Gross Receipts minusOff-the-Tops.-

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Ancillary Rights:

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Merchandising (which includes videogamerights}, soundtrack, music publishing, novelization, live stage, andtheme-park rights to a motion picture. Although exploitation of AncillaryRights typically involves Derivative Works, the two concepts aretreated separately in the industry.

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Attached:

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Generally means that Talent is contractually committed(often with conditions) to a Proj.ect.

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Back-End:

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Can refer to either a Royalty or Participation.

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Below-the-Line:

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Actual production costs (excluding Above-theLinecosts and certain miscellaneous costs described under NegativeCost}.

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Box-Office Gross

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Gross Receipts collected by motion picturetheaters.

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Budget:

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Sometime used to mean a forward-looking estimate ofNegative Cost, and sometimes used to mean a backwards-lookingstatement of actual Negative Cost.

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Completion Bond:

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A contractual commitment issued by a CompletionGuarantor agreeing to either (a) complete and deliver a pictureon time or (b) repay the bank if timely delivery is not achieved. TheCompletion Bond fee is generally calculated as a percentage (from2 % to 5%, depending on market conditions) of the combined Abovethe-Lineand Below-the-Line costs (often excluding costs relating toacquisition of the rights and payments to lead actors).

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Completion Guarantor:

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A company issuing a Completion Bond.

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Cross-Collateralized:

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When Gross Receipts from one picture orterritory are used to recoup losses from another picture or territory.

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Deferment:

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A fixed payment to Talent that is payable out of GrossReceipts, usually after reaching Cash Break-Even.

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Delivery:

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Delivery of the physical film elements for a motion pieture.

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Derivative Works

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Any work recorded in a tangible medium thatis based upon, or substantially similar to, a preceding work that isprotected by copyright. However, the industry typically limits the termto refer to sequels, prequels, remakes, and television spin offs of amotion picture.

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DGA:

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Directors Guild of America.

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Distribution Fee:

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A retained share of profits by the Distributor,usually charged as a percentage of Gross Receipts, and confusinglyreferred to as a "fee."

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DVD:

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Digital Video Disk

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Droit Morale:

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Moral rights of authors and directors, typicallyrespected in Europe, but not 'the U.S.

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E&O Insurance

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Errors and omission insurance. Insures againstclaims by third parties relating to exploitation of a motion picture(e.g., copyright, defamation, or trademark claims).

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Exhibitor:

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Owner of a movie theater.

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Exploit:

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To use a motion picture in any manner that generates Gross Receipts

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Film Rentals:

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The portion of Box-Office Gross paid by the theatrical Exhibitor to the Distributor.

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Final Cut:

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The final edited version of a motion picture.

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Green Light:

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A motion picture is approved for production.

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Home Video Royalty:

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Typically, a contractual provision whereby only a percentage, typically 20%, of home video royalties are included in Gross Receipts, and the balance is retained by the Distributor.

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Hold-Back: .

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A contractual provision prohibiting a Distributor from Exploiting a motion picture until a specified time

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IATSE:

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International Alliance of Theatrical and Stage Employees, which is the union for the Below-the-Line crew.

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Loan-Out Company:

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A corporation that loans out the services of its sole shareholder to third parties. Typically, Loan-Out Companies are used by Talent.

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Long-Form Contract:

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A full agreement containing all contractual provisions, including all "boilerplate."

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Main Titles:

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Opening credits on a motion picture

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Merchandising Rights:

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The right to sell tangible property embodying either trademarks or copyrights from a motion picture (e.g., games and T-shirts).

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Negative Pick-Up:

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An agreement whereby a studio acquires substantial rights (typiq1lly, at least Domestic Rights) in a motion picture in consideration for a fixed payment due upon Delivery plus Royalties.

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Net Propts:

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Gross Receipts minus all imaginable costs relating to the motion picture, including the Negative Cost (and interest thereon), Distribution Fees, Residuals, Distribution Costs, and, typically, Participations.

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Off-the-Tops:

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Specific deductions taken from Gross Receipts in calculating Adjusted Gross, namely checking, collection, currency conversion, trade dues, taxes, and Residuals.

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Output Deal:

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A contract requiring one party to acquire all motion pictures produced by the other party.

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Participations:

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Contingent payments to Talent based on a percentage of Gross Receipts or Net Profits from a motion picture.

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Pay-or-Play:

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A contractual provision providing that if Talent is not used in a motion picture for any reason, they will be paid their full compensation (other than a Participation).

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Pre-Production:

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The preparatory work that goes on during the three months prior to commencement of principal photography.

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Pre-Sale:

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A sale of particular motion picture rights for a fixed payment upon Delivery plus Overages, whi~h sale is entered into prior to completion (and usually even the start) of production for the motion picture.

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Prints & Advertising:

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The cost of film prints and advertising expenses: one type of Distribution Expense.

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Subdistributor:

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A party licensed by a Distributor to Exploit a motion picture.

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Studio:

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Generally one of the major U.S. film distributors (e.g., Warner Brothers, Sony, Disney, MGM, Fox, Universal, and Paramount).

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Trades:

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Variety and The Hollywood Reporter.

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VOD:

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Refers to Video on Demand, whicll generally includes streaming, download to own (electronic sell-through), download to rent, subscription video on demand, and other digital transmission that is initiated at a time of the consumer's choosing.