Q & A
Who requires a Completion Guarantee?
- Most Major Media Lending Banks
- UK Government Regional Funding Bodies,
- Independent Financiers
- Certain Studios and Television Companies
- Distributors/Sales Agents
In many cases the completion guarantee is the key component which enables a film to be made. The Guarantee ensures that there will be an end product by a given date which not only enables banks & financing bodies to lend monies against distribution agreements traditionally not payable until completion, but gives them the confidence to do so.
How long have Completion Guarantees been in existence – & why?
64 years. The first Completion Guarantee company was incorporated in 1950.
The concept of the Completion Guarantee was created in the UK to stem financial losses major film corporations were sustaining in the late 1940’s due to regular and alarming over costs in production, which threatened to collapse the UK industry.
The presence of a completion guarantee enabled the Financier/Producer to control creative excess by giving the guarantor the right to take over and complete the film if the script, budget and schedule were not adhered to, and the right of hire/fire of any/all key personnel.
This knowledge that creative control (and in some cases remuneration) could be removed from the creative players generated (in most cases) appropriate respect for the monies and time available to make a film, which has largely become the standard for filmmaking today.
The job of the Completion Guarantor is to ensure that each film is Completed and Delivered on or before the bonded delivery date. However, on a small percentage of films, this does not happen. In such cases an experienced guarantor will step in before the situation becomes critical.
Paterson James prefers to work with the original creative team to complete the film in accordance with their creative vision wherever possible.
How does it work?
Once a set of specific approvals/conditions are met and the Guarantor is satisfied that the film can be shot within the time, budget and using the personnel the Producer/Director wishes to allocate to the project, the Guarantor issues a Completion Guarantee (a legally binding document) which undertakes to guarantee the completion and delivery of the film by a fixed date. This is normally 1 calendar year after the commencement of Principal Photography + 60 days Force Majeur.
The cost for this service is an up front fee calculated as a % of the budget.
A guarantee is a large budget expenditure, and it’s precise function is often not correctly understood. At Paterson James we’re committed to being clear & working hard to ensure that our clients receive value for money. Please don’t hesitate to contact us for an explanation of how the process works – we’re always happy to answer any questions you may have.