Pre-Sales: What These AFM Companies Are Actually Offering

At least a dozen companies described the same structure. They said they could help finance the movie through foreign pre-sales. They explained that they pay 10% upfront, another 10% during pre-production, and then additional payments during filming and delivery, eventually reaching about 60% of the total budget. Crucially, they also said that they do not acquire the rights to the movie.

Many filmmakers hear “we pay 10% upfront and continue paying as you produce the film” and think this is a Minimum Guarantee. But it is not. This is the classic foreign pre-sale cashflow model, which has been the backbone of independent film financing for decades.

Under this arrangement, the company does not buy your film. They do not take long-term ownership. They are not the distributor. Instead, they act as a sales agent. Their role is to sell your film into foreign territories—Germany, Japan, France, Italy, the UK, Spain, Australia, Latin America, and many others—based on your cast and genre. The commitments from these foreign distributors are called “pre-sales.” The total value of these commitments determines how much of your budget can be financed in advance.

At AFM-25, foreign buyers were very open to romantic comedies, character-driven dramas, family films, and holiday films. This is a major change from past years, when foreign markets overwhelmingly preferred action, thrillers, and horror. Many buyers said that their audiences want uplifting, optimistic entertainment again. They want stories with heart. They want star-driven romantic comedies and feel-good narratives. Family films remain consistently strong. This shift in genre demand was one of the most important takeaways from the entire market.

Once the sales agent obtains foreign pre-sale commitments, the next step is cashflow. Foreign buyers do not pay until after the movie is completed and delivered, often six to twelve months after production. But producers need the money now. So the sales agent arranges a cashflow loan against the value of those foreign contracts.

This cashflow typically comes from one of four sources. First, there are specialized entertainment lending banks. Institutions like Comerica, East West Bank, JP Morgan’s media division, City National Bank, MUFG, Natixis Coficiné, and Cofiloisirs have been lending against pre-sales for decades. Second, some sales agents have their own internal capital or equity pools, which they use to advance money to productions. Third, many sales agents have relationships with third-party film financiers, mezzanine funds, or private equity-backed lenders who provide loans secured by pre-sales. And finally, a substantial amount of cashflow in today’s market comes from private lending facilities—family offices, high-net-worth investors, and boutique media funds that specialize in financing pre-sold independent films.

This is the origin of the statement you heard at AFM: “We pay 10% upfront, 10% later, and additional installments up to about 60%.” These staged payments reflect the structure of the cashflow loan. A small amount is released at signing to begin pre-production. Another portion is released once production officially begins. More flows during principal photography, and sometimes another tranche upon delivery of a rough or locked cut. The final portion is released near delivery. These payments are connected to the lending facility’s risk management and the sales agent’s own exposure.

In this model, you, the producer, keep ownership of the film. You retain copyright, you retain domestic rights, and you retain long-term control. The sales agent will recoup the cashflow from the foreign buyers’ payments and then take their commission—typically between 15% and 25%—plus any approved marketing expenses. After that, any overages belong to you and your equity investors.

This system can be extremely effective, but it also carries legal complexity. Many pre-sale contracts include pitfalls that must be negotiated carefully. Delivery requirements can be expensive. Sales agents may try to include uncapped marketing expenses that swallow a film’s profits. Reporting obligations may be vague. Some contracts include cross-collateralization, meaning your film’s revenue could be used to cover losses on other films in their catalog. Contract terms can be unreasonably long. Without audit rights, you may never know whether you are owed money. A pre-sale model works only if the legal structure protects the producer’s interests.

The True MG Deal: What Filmmakers Often Think They’re Getting

A true Minimum Guarantee deal is a completely different type of arrangement. In a real MG acquisition, the distributor buys rights to your film—domestic, international, or worldwide—and pays a lump sum that is guaranteed regardless of how the film performs commercially. The distributor takes the financial risk. You receive a fixed payment. This kind of deal is attractive because it provides certainty, but it comes with trade-offs. The distributor controls marketing, release strategy, and long-term exploitation of the film, often for ten to twenty-five years.

At AFM-25, very few companies were offering real MG acquisitions. These deals are typically reserved for films with A-list cast, major IP, festival buzz, or high commercial confidence. They require the distributor to commit substantial capital upfront, and in today’s fragmented marketplace, fewer distributors are willing to assume that risk.

MG deals also carry their own legal dangers. Delivery penalties can reduce your MG. Without a reversion clause, you may lose control of your film for decades. Backend participation is often theoretical unless you have strong audit rights. A distributor might shelf your film or give it a minimal release. For all these reasons, MG deals must be negotiated with extreme care.

Changing Genre Demand: A Turning Point in the Industry

One of the most encouraging aspects of AFM-25 was hearing repeatedly from buyers that genre preferences have shifted. Foreign distributors said they want films that uplift and entertain rather than only relying on darkness or violence. Romantic comedies are selling again, especially when they have talent attached. Family films remain strong. Dramas with emotional stakes and festival potential are attracting serious attention. Even holiday films are getting renewed interest, especially for streaming platforms and international broadcasters.

This is a significant opportunity for filmmakers who create story-driven, character-based work. For years, those projects struggled in the pre-sale market. AFM-25 showed a real change.

The Core Takeaway

The most important lesson from AFM-25 is that most companies offering “financing” are not buying films. They are offering pre-sale cashflow—a system where they pay 10% upfront, 10% later, and additional payments up to about 60% of your budget, but they do not acquire rights. They act as sales agents and recoup their advances from foreign sales. This model preserves ownership for the filmmaker but requires precise legal negotiation.

The second major insight is that audience demand has shifted. Companies actively want romantic comedies, dramas, family films, and uplifting content. This opens new creative and financial opportunities for independent producers.