Minimum Guarantee
Advance payment from a distributor against future revenue for distribution rights.
Definition
A minimum guarantee (MG) is an advance payment from a distributor to a producer in exchange for distribution rights. The distributor recoups this advance from revenue before the producer receives additional payments.
MGs provide producers with upfront capital that can help finance production or provide immediate returns to investors. The size of MGs depends on the project's commercial potential and negotiating leverage.
Why It Matters
MGs can finance production before a film is made or provide immediate returns upon completion. Understanding MG dynamics helps producers optimize financing and distribution strategies.
For the industry, MGs represent the transfer of risk from producers to distributors in exchange for rights.
Examples in Practice
Pre-sale MGs totaling $8M from key territories allow the production to begin before any investor capital is required.
A domestic distributor offers a $3M MG for North American rights, providing significant upfront return to investors.
MG negotiation balances upfront payment against revenue split—higher MGs often come with less favorable backend terms.