# Pre-Sales and Minimum Guarantees: How Film Pre-Selling Works

Source: https://storiara.com/blog/pre-sales-and-minimum-guarantees
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> A pre-sale is a distribution deal for a territory signed before the film is made. The buyer commits to a minimum guarantee, usually a small deposit on signing and the balance on delivery, and the producer borrows against the signed contract from a bank. The bank discounts the contracts for interest and risk and requires a completion bond, so a $500,000 pre-sale typically puts less than $500,000 into the production account.

A pre-sale takes something a producer can't bank, a film that doesn't exist yet, and turns it into something a bank will lend against: a signed contract from a distributor promising to pay a set amount when the film is delivered. The [glossary entry](https://storiara.com/glossary/pre-sales) covers the basic loan arithmetic. This post follows a package from the sales agent's estimates through to the day the distributor pays, using THE LONG DRIVE, the $2,000,000 thriller from our financing examples.

The figures below are illustrations. Real estimates come from your sales agent, and real advance rates and interest come from the bank's term sheet.

## Estimates: the sheet everything starts from

A [sales agent](https://storiara.com/glossary/sales-agent) prices a package territory by territory before taking it to market. Each territory gets an ask (the opening price) and a take (the price the agent would accept). Producers and lenders both work off this sheet, and it's the first thing to update when an element changes.

| Territory | Ask | Take | Result at market |
|---|---|---|---|
| Germany, Austria, German-speaking Switzerland | $350,000 | $250,000 | Pre-sold, $300,000 MG |
| Japan | $250,000 | $180,000 | Pre-sold, $200,000 MG |
| United Kingdom | $300,000 | $200,000 | Unsold |
| France | $220,000 | $150,000 | Unsold |
| Scandinavia | $120,000 | $80,000 | Unsold |
| Latin America | $150,000 | $90,000 | Unsold |
| Rest of world, combined | $250,000 | $130,000 | Unsold |
| **International total** | **$1,640,000** | **$1,080,000** | **$500,000 pre-sold** |

Two territories sold above take. The unsold ones, with $650,000 in take estimates, become collateral for the [gap loan](https://storiara.com/glossary/gap-financing). Domestic (the US and Canada) usually sits on a separate line and, for most indies, stays unsold until the film is finished.

What moves these numbers is cast. Buyers in each territory are paying for faces their audience knows, in a genre that performs there. A thriller with a lead who carries weight in Germany might price very differently in Japan.

## Where the selling happens

Pre-sales cluster around the film markets, where agents book back-to-back meetings with buyers. The American Film Market runs November 10 to 15, 2026 in Los Angeles, and the European Film Market at the Berlinale is scheduled for February 10 to 16, 2027. Agents want the package ready several weeks ahead: cast attached with signed or near-signed deals, a director, a budget, and marketing materials such as a one-sheet and a [lookbook](https://storiara.com/glossary/lookbook). A [pitch deck](https://storiara.com/glossary/pitch-deck) helps too.

This dictates the production calendar more than producers expect. If the goal is to shoot in spring, the package needs to go to AFM in November, which means cast deals closing in September and October.

## What the pre-sale contract says

A pre-sale is usually memorialized first as a short deal memo and then as a long-form distribution agreement. The terms that matter most to financing are these:

| Term | Example for Germany | Why the bank cares |
|---|---|---|
| Rights | All media: theatrical, TV, SVOD, home entertainment | Fewer rights can mean a lower MG |
| License period | 15 years | A longer term can support a higher MG |
| Minimum guarantee | $300,000 | The bank's collateral |
| Payment schedule | 10% on signing, 90% on delivery and acceptance | The bank lends against the 90% |
| Essential elements | Named lead actor and director | If they change, the buyer may renegotiate or walk |
| Delivery schedule | Attached list of materials and deadlines | Missing items delay the 90% |
| Outside delivery date | A date after which the buyer can cancel | Sets the bond company's deadline |

The distributor also signs a notice of assignment, directing it to pay the balance to the bank or the [collection account](https://storiara.com/glossary/collection-account) instead of to the producer.

## From contracts to cash

The producer can't spend a contract, so a bank lends against the unpaid balances. The bank discounts them for interest over the time until delivery, its fees, and the risk that a buyer defaults.

| Line | Germany | Japan | Total |
|---|---|---|---|
| Minimum guarantee | $300,000 | $200,000 | $500,000 |
| Deposit on signing (10%) | $30,000 | $20,000 | $50,000 |
| Balance due on delivery | $270,000 | $180,000 | $450,000 |
| Bank loan against balance | $240,000 | $160,000 | $400,000 |
| Cash for production (deposit plus loan) | $270,000 | $180,000 | $450,000 |

The $50,000 difference between the $450,000 balance and the $400,000 loan covers interest and fees. If interest runs 10% a year on $400,000 for twelve months, that's $40,000, leaving $10,000 for the bank's arrangement fee and legal costs. Those are assumptions, and every month delivery slips adds interest.

The bank will look hard at who the buyers are. A long-established distributor with a payment history gets a better advance rate than a new company. Some banks decline certain buyers entirely, which is worth knowing before a sales agent accepts an offer.

## What the bank requires before it funds

- A completion bond from a [completion guarantor](https://storiara.com/glossary/completion-guarantor), so the film is delivered even if the production runs into trouble
- The rest of the budget committed: equity in escrow, the tax credit loan, the gap loan
- Notices of assignment signed by each distributor
- An interparty agreement setting the order in which the bank, gap lender, bond company, and investors get paid
- Chain of title and E&O insurance in place

That list is why a pre-sale only helps a film that can close all its other financing at the same time.

## Delivery: where the money gets stuck

The balance is due when the distributor accepts delivery, not when the film is finished. Each contract has its own delivery schedule, and items that are cheap to plan for become expensive to produce after the fact.

Items that routinely hold up acceptance include the [M&E tracks](https://storiara.com/glossary/m-and-e-tracks), music cue sheets, closed captions and subtitle files, a clean textless version, the E&O certificate naming the distributor, [chain of title](https://storiara.com/glossary/chain-of-title) documents, cast approvals on key art, and QC reports on the picture and sound files. Every week they're missing, bank interest keeps running.

Price the [deliverables](https://storiara.com/glossary/deliverables) at budget stage, with the actual delivery schedules from the pre-sale contracts in hand. Two buyers can ask for different frame rates, audio configurations, or subtitle formats, and each variation is a post cost.

## After delivery: MG, recoupment, and overages

Once the distributor pays, the [minimum guarantee](https://storiara.com/glossary/minimum-guarantee) is recouped from the film's revenue in that territory, after the distributor's fees and expenses. If the film earns past that, the producer gets overages, which flow into the collection account and down the [waterfall](https://storiara.com/glossary/waterfall). For a small indie in a mid-sized territory, overages are the exception, so the MG is usually the number that matters.

Watch for cross-collateralization. A distributor that licenses the film for two territories may be allowed to offset losses in one against earnings in the other, which delays or eliminates overages.

## When not to pre-sell

A pre-sale trades upside for certainty. A territory sold before the film exists usually goes for less than it might after a strong festival premiere. If a film has enough equity and soft money to get made without them, some producers pre-sell only one or two territories to anchor the gap loan and hold the rest for the finished film. The decision comes back to the finance plan: if the pre-sale money is the difference between shooting and not shooting, take the certainty.

For the full capital stack, see [how to finance an indie film](https://storiara.com/blog/how-to-finance-an-indie-film). For how these receipts reach investors, see [film P&L for investors](https://storiara.com/blog/film-pl-for-investors).

## Frequently asked questions

### When is the minimum guarantee paid?

Usually a small deposit when the contract is signed and the balance when the distributor accepts delivery of the finished film. The exact schedule is negotiated in each deal, and some add a payment on release.

### What do film buyers need to see before pre-buying?

A script, a budget, a director, and above all cast they can sell in their territory. The sales agent usually also shows a one-sheet or key art, a lookbook, and sometimes a promo reel.

### Can you pre-sell the US rights to an indie film?

It happens, but it's less common for independent films than international pre-sales. US distributors and streamers more often buy finished films, frequently after a festival premiere.

### What happens to a pre-sale if the lead actor drops out?

Most pre-sale contracts name essential elements, usually the lead cast and director. If one changes, the buyer may be able to renegotiate the minimum guarantee or cancel, which also affects the bank loan secured against that contract.

## Sources

- [American Film Market (IFTA), 2026 dates](https://americanfilmmarket.com/)
- [European Film Market, Berlinale](https://www.efm-berlinale.de/en/home/home.html)