5 Rules for Getting a Letter of Intent (LOI) From a Sales Agent for Your Film.
In order to properly package a movie, you need three things. Recognizable Name Talent, First Money in, and at least a letter of intent from a distributor. I’ve covered steps for preparing for calling agents in the Entrepreneurial Producer, (Free E-Book Here.) I’ve covered some of the ways you can get first money in this blog. So now, I’ll cover some rules for approaching sales agencies in the blog you’re about to read
The reason you need an LOI is that the cause of films not recouping their investor’s money is that they can’t secure profitable distribution. Your investors want to know you have a place to take the film once it’s done, so they can begin to get their money back. Before you start thinking that you’ll just try to start a bidding war after the film is done, you should be aware that generally doesn’t happen.
Before we begin, This Packaging concepts blog series was recommended by my friend Brittany, in the Producer Foundry group on facebook. I occasionally look to answer questions people have there, so if you want me to answer something join the group. Or, if you want definitely want to get some questions answered, you should join my Patreon. I’m very active in the comments.
1. This document isn’t a Pre-Sale.
It’s important to note that there’s a big difference between a Pre-Sale and a Letter of Intent. A Pre-Sale is something that you may well be able to take to the bank to take out a loan against. That is, if you’ve got a presale agreement from a reputable distributor or sales agency. If you’re working on making your first film, that’s probably not going to happen though.
To get a Pre-sale, you need to have a known director with a proven track record, a film that’s not Execution Dependent, and likely some noteworthy cast. Even then, the Pre-Sale often only covers the cast.
An LOI is a much less serious document. It’s essentially a letter guaranteeing that a sales agent will review the film on completion, and if it fits their business needs they will represent the film. Generally, the producer will give the sales agency an exclusive first look for the privilege of using their name to help package and finance the film. Sales Agencies can’t just give these to everyone, as it waters down their brand. You’ve got to compensate them in some way for taking a risk on you.
This is not the final document, you’ll negotiate a distribution agreement once the film is done. Don’t try to negotiate one at this point, since you’ll be in an inferior negotiation position.
2. Make sure there’s a time window on the sales agent’s first look
If you fail to put a time window on the sales agent's first look, you can lock yourself up and potentially lose the first window on the film. Generally, I’ll say something like 14 or 30 days from initial submission on completion of the film. This gives the sales agency time for review but doesn’t hurt the filmmaker’s options if they take too long. This also prevents them from tying you into a contract.
3. Only approach agencies that sell films like the one you want to make.
This may sound obvious, but if you’re looking for an LOI for a horror film, don’t approach sales agencies that deal primarily in family films. If all goes according to plan, this sales agency will be distributing your film when it’s done. You want to make sure they’re well-suited to sell your film when the time comes.
4. Look at the track record of the agency you want to work with
You need to look into what films the sales agent has made in the past, and how widely those films have been distributed. At this stage, doing this isn’t as important as when you negotiate the final distribution deal, but it is something you should know when going after a letter of intent.
Also, the track record of the sales agency or distributor has a direct impact on how valuable the LOI is. An LOI from Lionsgate means a lot more than an LOI from someone on the third floor at AFM this year. Looking at the track record can help you more accurately assess the value of the document you hold, so you can better present that information to potential investors.
5. Getting an LOI is Heavily Dependent on the Relationship with the Sales Agency.
If you walk in cold and start asking for an LOI on the first meeting, you’re not likely to be successful. It takes time and a fair amount of correspondence to get to the point where a sales agency is willing to take a risk on you.
If you don’t want to spend the time and money to establish these relationships by going to markets and having calls and emails with the sales agency, you may want to consider a Producer’s Rep.
Most producer’s rep will require some level of upfront payment for this sort of work. I charge a relatively small amount upfront and a larger amount on success for this sort of work. That said, I’m relatively selective about what I take on. If you’d like to find out more click the links below to submit your project, or book a call with me on Clarity to pick my brain about the next steps. Alternatively, you can sign up for a free strategy session and talk about what the best next steps for you would be. I also offer educational programs that will teach you how to get these for yourself. Those start with a one-hour strategy session. In this one-hour strategy session, I'll help you figure out where you are, what the next steps for you are, and what the best course of action for helping you get there would be.
Thanks so much for reading! This is only a primer, and in order to succeed you’ll need a lot more information on the business of indie film. If you want help getting that, you should check out Guerrilla Rep Media’s independent film business resource package. You’ll get a free-ebook, lots of templates, money-saving resources, and even a monthly content digest delivered to your inbox to help you grow your indie film company and premier. It’s completely free and linked in the button below.
