Recoupment
Definition
The process of recovering invested money from film revenue before profit participants receive their share. In a typical distribution deal, the distributor recoups its marketing and distribution costs first, then the filmmaker recoups any minimum guarantee, and finally net profits are split according to the agreement. Recoupment schedules can be complex and are a common source of disputes between filmmakers and distributors.
Example
A distributor spends $15,000 on marketing your film. The film generates $40,000 in revenue. The distributor recoups their $15,000 plus a 20% fee ($8,000), leaving $17,000 for the filmmaker.
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