What is a minimum guarantee?
A , almost always called an MG, is the money a distributor commits to pay for the rights to a film in a . The distributor gets to release the film there for a set number of years, and the MG is an advance against what the film earns in that market.
The advance gets earned back first. The distributor keeps the film's revenue in its territory until it has recouped the MG plus its marketing expenses, and only after that does any further money, called , flow back to the film's owners.2
The word "minimum" is the most honest word in the phrase. For most independent films, the MG is the only money that territory will ever send back.2 When producers talk about "selling a film," they mostly mean collecting minimum guarantees, one country at a time, and hoping one of them turns into a maximum.
Who sells a film to buyers around the world?
A does. The sales agent represents the film to distributors around the world, usually at the big markets, and licenses it territory by territory. In return the agent takes a commission, which one industry guide puts at 10 to 15 percent of sales, plus market expenses that can run $50,000 to $75,000 per market cycle.1
Not every territory gets sold the same way. The same guide describes the usual order: the UK, France, Germany, Australia, Japan and South Korea tend to carry the highest MGs and the strongest distributors, so agents try to sell them first. Smaller markets can wait. Domestic U.S. rights are usually held back, because they are the most valuable rights a film has and they shape everything else about its release.1
A good sales agent is part auctioneer, part weather forecaster and part therapist. They have to tell a producer what the film is worth in thirty countries before it has been shot, then tell thirty buyers it is worth more than that.
How does a buyer decide what to pay?
I spent more than five years as a buyer at Sony Pictures Worldwide Acquisitions, and the honest answer is that a buyer prices a film the way an insurer prices a house: by asking what could go wrong, and in which neighborhood.
The first question is cast, territory by territory. An actor who opens a film in Texas may mean nothing in Poland, and the reverse happens more often than American agents would like. One industry guide calls recognizable cast a hard requirement for presales today, and notes that action, thriller and horror travel best internationally, while drama and comedy lean much harder on star power.1
The second question is comparable titles. What did similar films, with similar cast, earn in this territory over the last few years? The third is rights. A buyer paying for theatrical, television and streaming rights for fifteen years will pay a very different number than one buying a single window for five.
Rights can be split in creative ways. At Sony I acquired the international rights to Mending the Line, Stephen Camelio's drama about a young Marine who finds his way back through fly fishing, while Blue Fox handled the domestic release. Two companies, two sets of territories, one film, and each of us priced it for the audience we knew.
A buyer's MG is a bet on the downside. Any upside reaches the producer later, through overages, and only after the buyer has been paid first.
When does the minimum guarantee actually get paid?
Mostly on delivery. A standard structure pays 10 percent when the contract is signed and the remaining 90 percent when the completed film is delivered.1 So an MG signed before production is a promise of future money, and a producer still has to find a way to pay for the shoot in the meantime. That gap is why banks lend against presales, which I cover below.
"Delivered" has a precise meaning. The distributor sends a list, which can run to dozens of pages, covering the picture and sound files, music cue sheets, insurance certificates and the legal paperwork proving the producer owns what they are selling. Until every item clears, the balance of the MG stays put.
The legal half of that list is where films get stuck. I wrote a separate piece on chain of title and E&O insurance, the two deliverables that most often hold up a payment.
What happens after the distributor pays the MG?
The distributor releases the film and starts collecting revenue. Before the producer sees anything more, the distributor takes its distribution fee, recovers its marketing and release expenses, and earns back the MG. Only then do overages begin.2
This order is why experienced producers push for the biggest MG they can get, even when a buyer offers a richer share of the backend instead. A dollar of MG arrives on delivery. A dollar of overage arrives after three other parties have been paid, if it arrives at all.2
The same logic shows up across the whole financing stack, which I cover in how completion bonds work and why every movie has its own LLC.
Can a producer borrow against a minimum guarantee?
Yes, and on independent films this is the whole point of preselling. A bank will lend against a signed MG contract, at a discount to its face value. One legal outline gives the example of a $1 million MG supporting a loan of about $850,000 today, after fees and interest.3
The bank cares less about the film than about the buyer. A contract from a distributor with strong credit is worth close to its face value. A contract from a weak distributor may be worth nothing to the bank at all.3 In other words, a presale is only as good as the company that signed it, which is a sentence every producer learns once and never forgets.
Lending against signed MGs is called presale financing, and lending against territories that haven't sold yet is called gap financing. I explain both in how gap financing and presales work.
Where do minimum guarantee deals get made?
At the film markets. The calendar is built around a handful of them, where sales agents rent suites, screen footage and meet buyers back to back for days. The American Film Market is the big one in the United States, and its 2026 edition runs November 10 to 15 at the Fairmont Century Plaza in Los Angeles.45
If you are a producer heading into a market with a film to sell, three things help more than anything else: a clear sense of which territories your cast actually carries, realistic comparable titles for each one, and paperwork that is already clean. Buyers notice all three, and they price the last one in faster than most producers expect.
Questions people search
What is a minimum guarantee in film?
An advance a distributor pays for the right to release a film in a territory. The distributor recoups it from the film's revenue there before the producer receives any further money.
When is a minimum guarantee paid?
Commonly 10 percent on signing and 90 percent when the finished film and all deliverables are delivered.
What are overages in film distribution?
Payments to the film's owners after the distributor has recouped its fee, its expenses and the minimum guarantee.
How much does a film sales agent charge?
One industry guide puts commissions at 10 to 15 percent of sales, plus market expenses. Terms vary by agent and film.
Can you get a loan against a minimum guarantee?
Yes. Banks lend against signed MG contracts at a discount to face value, and how much they lend depends on the distributor's creditworthiness.
Is a minimum guarantee the minimum a film will earn?
From that territory, it is often the only payment the producer receives, which is why producers usually push for a larger MG over a bigger backend share.
When is the American Film Market in 2026?
November 10 to 15, 2026, at the Fairmont Century Plaza in Los Angeles.
- Vitrina, "How Film Pre-Sales Work to Finance Production." vitrina.ai
- Filmmaking Stuff, "Understanding Minimum Guarantees (MGs) in Film Distribution." filmmakingstuff.com
- LexPlug, "Pre-Sales, Gap Financing, & Tax Incentives," entertainment law outline. lexplug.com
- American Film Market, exhibitor registration: November 10 to 15, 2026, Los Angeles. exhibitors.americanfilmmarket.com
- Screen Daily, "2026 AFM to Return to Fairmont Century Plaza in Los Angeles." screendaily.com
I'm a producer and a former film acquisitions executive, not a lawyer or an accountant. Nothing here is legal, tax or financial advice. Before you sign anything, talk to an entertainment attorney.