Money Money Money!!!!

(https://www.flickr.com/photos/tracy_olson/61056391)

Continuing the trend of having meals with important people, I was fortunate enough to have lunch with Dan Freedman of Good Universe. Dan is the SVP of Business & Legal Affairs and handles the contracts between Good Universe and actors, studios, ect hence his title. His contributions to the company, while mostly unnoticed or even thought about by the common moviegoer, are so integral to the success of Good Universe that I truly believe the business model would not be possible in the hands of a "lesser" individual. The world of film contracts is akin to the wild west; only the smartest deal makers and those with the best representation survive.

Without getting too technical, in part to avoid boring you and the fact that I myself am still a little murky on the concepts, I will try to give you a small rundown on how the majority of movie deals go down these days. Back in the day many A-list actors were able to sign "first dollar gross" deals. This basically meant that an actor such as Tom Cruise during his Mission Impossible days was able to make a percentage off of the first dollars of "gross" his movies made from the box office. Over time, this model started spreading to B-list actors, then to C-list actors and so on; eventually breaking the model. The writers strike, and actor lead flops exacerbated the problem. Currently, most deals involve a "CB zero" agreement. The CB stands for Cash Break. This means that an actor is unable to collect any sort of profit until the studio "breaks even". This includes upfront salaries, production cost, and advertising cost. 

My very simplified explanation illustrates why people like Dan Freedman are so important. Steadily declining DVD sales due to streaming sites like Netflix make the issue even more pressing. Good Universe, not being bound to the "rules" of a traditional studio, opens up the need for Dan to be even more creative when he writes up contracts. For example, a traditional studio like Universal or Sony chooses to build what is called a "ship" when they have a project they are interested in. This basically means that they attach a director, producer, and actors to a specific project adding costs to the budget as they go along. Once the "ship" has been assembled they take it to marketing to determine if the "ship" will float. If not, they may come to people like Good Universe for co-financing. I won't get into all that here. On the flip side, a company like Good Universe, who has a much different approach to how they handle capital, elects to build the "ship" before they even think about developing the project. This approach allows Dan to know the budget and "big picture" before negotiations begin.

Hopefully I haven't confused you too much on the business concepts, I am a liberal arts degree recipient after all. As you can see though, Dan's job is very integral and extremely difficult. He routinely has to draft what he calls "trick deals" in order to come to terms with respective clients. The word "trick" in no way means that he is scheming people out of their money, it just means he has to get creative in his dealings. Since Good Universe is unable to offer as much money upfront, they often times offer a much more on the "back end" or a higher percentage after CB has been reached. Good Universe has the advantage though of having a certain level of leverage on some projects since a lot of films would not be made without Good Universe's involvement. The actor then has the choice of either taking less upfront or risking not making anything if the film never gets made. The business side of films is quite ruthless and often times lawless, but people like Dan keep things afloat.