Waterfall
The order in which revenue is distributed once money comes in. Each party gets paid in strict sequence — nobody in a lower tier sees a dollar until everyone above them is paid in full.
Gross revenue
All money received from the exploitation of the film across all platforms, territories, and formats — theatrical, streaming, VOD, broadcast, airlines, and so on — before any deductions.
Distributor fee
The percentage a distributor charges for releasing and selling the film. Typically 20–35% of gross revenue, deducted before anyone else gets paid. This is their commission for getting the film to audiences.
Sales agent fee
The commission charged by a sales agent for selling the film to distributors in different territories. Typically 10–20% of gross. Separate from the distributor fee — both come off the top.
P&A / marketing recoup
Prints and Advertising — the cost of marketing and delivering the film. Includes posters, trailers, advertising spend, encoding, and delivery to platforms. The distributor recoups these actual costs before profits are calculated.
Reserve holdback
A percentage of gross revenue withheld temporarily to cover potential future liabilities — refund claims, guild obligations, or legal disputes. Typically 10%. Unused reserves are released and distributed after the risk period passes.
Recoupment
The process by which investors get their original investment back from revenue. Until an investor has fully recouped, 100% of available net proceeds flow to them. Only after full recoupment does the producer start sharing in profits.
Recoupment multiple
A premium on top of the original investment that the investor must receive before backend profits kick in. A 1.2× multiple on a $300K investment means the investor recoups $360K before the producer sees any backend profits.
Backend split
After the investor has fully recouped, any remaining net profit is divided between the investor and producer according to the agreed percentage. A 50/50 split means each party takes half of whatever profit remains.
Net proceeds
What remains of gross revenue after all approved deductions — distributor fees, sales agent fees, P&A, delivery expenses, and reserve holdback. This is the pool that flows to investors and producers.
Investor ROI
Return on Investment — the percentage gain or loss on the original investment. An ROI of 35% on a $300K investment means the investor received $405K total. A negative ROI means the investor did not fully recoup.
Pari passu
Latin for "on equal footing." When multiple investors recoup pari passu, they all get paid at the same time, proportionally to their investment size. No single investor jumps the queue ahead of others in the same tier.
Equity financing
Money invested in exchange for a share of the film's profits. Unlike a loan, equity investors only get paid if the film generates revenue. Higher risk — but with upside if the film performs well.
Soft money
Non-repayable funding from government programs, tax credits, or public agencies — such as the Canada Media Fund, BC Film Incentive, or UK BFI. It reduces the equity needed and shortens the recoupment climb for investors.