The "standard" distribution deal calculates the distributor’s fee as a percentage of gross revenues.
The "50-50 Net Deal", allows the distributor to first recoup its expenses from gross revenues, and then share the remaining amount 50/50 with the filmmaker.
A third type of deal is a so called royalty deal, wherein the distributor pays a royalty on a per unit basis, such as 20% of the wholesale price of each DVD sold.
As Mr. Litwak states, "most deals are more complex because they cover multiple media with differing fees and formulas for each and often require cross-collateralization of expenses." See Mark Litwak Summary on the types of distribution deals.
GMT Releasing's distribution deal basically is to "cover" the GMTR operating budget and the actual film’s advertising, promotion, prints and publicity costs and then disburse profits, prorata, to all contracted participants. GMTR’s objective is to perpetuate the company long-term at near breakeven annually.
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