Film Accounting Glossary
Gross participation
What is gross participation?
Also called gross points.
Gross participation is a backend deal calculated on gross receipts with limited deductions, ranking above adjusted gross and far above net profits in value.
Because it is paid before most cost recovery, a large gross participation can push a picture's break-even substantially higher for everyone else. Studios accordingly grant it rarely and negotiate hard over which deductions are permitted first.
Example
A 7.5% gross participant on $80M of gross receipts takes $6M with few deductions applied first. That $6M is recovered before the negative cost, so it pushes break-even out for every junior participant on the picture.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Senior participation deals. Studios negotiate hard over which deductions are permitted before the calculation.
Common mistake
Treating gross and adjusted gross as interchangeable. Gross carries fewer deductions and is paid earlier, which makes it worth materially more.
Related questions
- How does gross participation differ from net?
- Gross is calculated on receipts with limited deductions and is paid before most cost recovery. Net comes after every contractual deduction, and frequently pays nothing.
- Why do studios resist granting gross points?
- Because the money comes off the top, before cost recovery, which pushes break-even out for the studio and every other participant on the picture.