Following changes made on 1 January 2009 to the regulations governing co-production support Article 7.5 now extends the use of collection accounts and in particular makes them compulsory for those co-productions with budgets equal to or greater than 3 million euros.
After analysing the bids submitted by seven collection account management companies active in the European audiovisual market Eurimages has entered into a partnership with Freeway Entertainment offering favourable conditions for those producers which have received Eurimages support.
Any producers who are interested in a collection account management agreement or for whom this is an Eurimages requirement should contact:
indicating the Eurimages reference of the film concerned.
It is nevertheless specified that producers remain free, subject to agreement by Eurimages, to call upon any other recognised collection account company active in the European market.
Before contacting a collection agent, producers are invited to provide a summary of the revenue recoupment plan for their film by using or adapting the examples of tables proposed by Eurimages hereafter and submit this to the Eurimages project manager concerned and to the Royalties Officer (eurimages.reimbursement @ coe.int).
How to proceed?
Eurimages’ request for a Collection Account Management Agreement (CAMA) to be set up is mentioned in the support letter and later in the support agreement.
Producers must inform the Eurimages project manager beforehand about the company they intend to appoint to be their collection agency. Eurimages also has a right of approval over this decision.
In order to faciliate the drafting of the CAMA, producers can submit a recoupment schedule. You can find examples of these at the bottom of this page (see “reimbursement”).
A draft of the CAMA should be submitted for approval to Eurimages, and to all other signatories, before sending out this agreement for signature. Signatories of the CAMA will include: Eurimages, all of the co-producers which are parties to the Eurimages’ support agreement, the sales agent and the other distributors concerned.
The CAMA must be signed to release the second instalment of Eurimages’ support. However, we strongly recommend that it be drafted as soon as possible in order to avoid any problems relating to recoupment.
Standard terms of the Eurimages’ support agreement
Should the co-producers open a collection account for the project, Eurimages will be a signatory to the CAMA and as such, will be granted a share of the net receipts equal to the percentage mentioned in the support agreement.
For projects with a budget of €3 million or more, the co-producers undertake to set up a collection account by a collection agency. For projects with a budget of less than €3 million, Eurimages reserves the right to demand the setting up of a collection account by a collection agency. In all cases, Eurimages must be a signatory to the collection agreement.
For the above purposes, the co-producers may, if they wish, sign a CAMA under the framework collection agreement negotiated by Eurimages with Freeway Entertainment. It is specified that producers remain free, subject to agreement by Eurimages, to call upon any other recognised collection account company active in the European market.
Eurimages reserves the right to refuse the appointment of a collection agency if it considers that this agency does not provide sufficient guarantees of independence from the co-producers and/or financiers involved in the Project or does not possess enough experience in this line of business.
Deduction of distribution advances
Only distribution guarantees and/or presales necessary for the financing of the project and approved by Eurimages shall be deducted for the calculation of the Eurimages’ share of receipts. These approved deductions are mentioned in an addendum to the Eurimages’ support agreement called “List of deductions”. This shall be clearly mentioned in the recoupment schedule of the collection agreement.
Gross RoW revenue
Gross RoW revenue refers to all the revenue, which arises from the exploitation of the film throughout the world excluding the producers’ exclusive territories.
The sales agent shall instruct each distributor with whom it entered into a distribution agreement to pay directly into the collection account all those sums constituting the Gross RoW revenue. The collection agency is in charge of distributing their share of the Gross RoW revenue to the beneficiaries, including the sales agent’s commission, expenses and possible advance.
Normally, domestic revenue is also included in the CAMA. This is calculated on the basis of the net revenue after deduction of the distributors’ commissions, expenses and possible advances.
The producers shall instruct each distributor with whom they have entered into distribution agreements on their domestic territories to pay all the domestic net revenues directly into the collection account. The collection agent is in charge of distributing their share of the domestic net revenues to the beneficiaries.
The main benefits of a CAMA
Eurimages considers that setting-up a CAMA not only serves the fund’s goals but also protects the co-producers’ interests. The CAMA is an instrument which allows financial transparency and equality of treatment between beneficiaries of a share of the receipts. It is a financial protection tool for producers, in particular the minority co-producers.
A CAMA also ensures that parties involved in the distribution chain cannot retain fees and expenses from generated revenues before such expenses have actually been earned or have been properly incurred. An example of this is that a collection agency will only pay a sales agent’s commission in respect of such part of the revenues which is actually received in the collection account.
Furthermore, the collection agency ensures follow-up of the exploitation of the film in the long-term without having to deal with it oneself.
Another benefit of working with a collection agency could be that producers in a relevant territory can (irrevocably or mutually, publicly or confidentially) direct the collection agency to apply on their behalf their revenue share to third party financiers, talent, crew or other production partners and that these assignees have the security and assurance that a trusted third party collection agency will take care of the payment direction.
Producers can find benefits in a CAMA by the outsourcing of heavy administrative burdens (reporting), by ensuring that revenues are handled by an impartial 3rd party and by improving revenue tracking (financial security).
Eurimages provides examples of tables to be used to model the revenue recoupment plans. These examples, taken from documents submitted by producers have received support from Eurimages; they can of course be tailored to the particular situation of each project (The amounts and percentages have been changed).