Establishing Transparency, Sustainability, and Standardization of Structures Around Documentary Film Finance
Following more than three years of research and collaboration with industry stakeholders, the Documentary Producers Alliance (DPA) today publidocumentaryproducersalliance.org.
The organization’s goal in releasing the Guidelines is to create a set of standards for financing in documentary film including investments, recoupable grants, and other financing tools intended to serve filmmakers, investors, and donors in financial discussions and negotiations.
Director/Producer Marilyn Ness of Big Mouth Productions and Co-Chair of the DPA Waterfall Committee: “Our philosophy was always, ‘A rising tide lifts all boats.’ The field would only be served if everyone had the benefit of better deals, better credits, better networks.”
DPA spokesperson Beth Levison: “The future of the field depends on the successful implementation of these groundbreaking new industry guidelines and we are committed to seeing this happen in 2020. With this second major set of guidelines, the DPA furthers its leadership role in the industry.”
The DPA’s recommendations are crafted as best practices rather than rules. The DPA, which launched in 2016, encourages filmmakers and their partners to use these guidelines as a starting place, with the specificities of each project dictating where, when and how exceptions are applied.
Major Industry-Impacting Points from the DPA’s Guidelines For The Documentary Waterfall include:
1.) Filmmakers’ work should be compensated at every stage in a film’s life cycle, from development through distribution. Budgets need to be reasonable and include sustainable wages for filmmakers, as well as recoupment of filmmaker outlays of cash often used to fund development.
2.) With a waterfall structured fairly for all parties, reasonable expenses incurred in the premiere and sale of a film (e.g. publicity, broadcast versions, and festival travel) should be deducted “off the top” and thereby absorbed by all of the film’s profit participants.
3.) At each position in the waterfall, all profit participants should be paid pro rata pari passu, or paid equally between all relevant parties, at the same time, without preferential treatment to anyone.
4.) Deferred fees remain a constant and often unresolved issue for filmmakers who are often expected to pay others first (including lawyers, publicists, lenders and investors, to name a few). The DPA Guidelines recommend that unpaid budgeted fees, also known as “deferred fees,” should be paid back from the first income received from the sale of a film, before any other recoupment begins. Alternatively, in a scenario where investors require filmmakers to wait to be paid for their labor, the DPA Guidelines recommend that deferred fees be converted into “sweat equity, ”meaning treated as an investment, to be recouped at the same time as investor financing, and therefore be entitled to the same premium and net profit participation as other investor financing.
5.) The DPA recommends rewarding earlier investors, who assume greater risk, with higher premiums on their investment, in comparison with investors who come in later when a project is more establi
