industry to measure the success of a film. While there is a generally accepted definition of gross receipts, the agreement should nonetheless define the term. Usually gross receipts means “any and all gross sums actually received by the distributor, arising out of or in connection with the exercise of any of the rights herein contained.” Minimum guarantee payments, advances, and/or security deposits are usually included in gross receipts. By contrast, “net receipts” should be defined as well. Generally speaking, the term “net receipts” is defined as gross receipts minus all distribution expenses.
After providing these definitions, the agreement must spell out what percentage of the gross or net receipts the producer is entitled to and what percentage the distributor will keep. For instance, a common arrangement is for the producer to be entitled to 80% of the