What is Advance/Minimum Guarantee?

• A. The payment of a fixed upfront fee to marketing partners.
• B. The payment of a certain amount of the producer's share of gross revenues or royalties, usually upon complete delivery.
• C. A contingent backend payment after release.
• D. A loan against future earnings.

Answer: (B)

Advance/Minimum Guarantee is an upfront payment to the producer that guarantees a minimum amount in earnings, usually tied to the producer’s share of gross revenues or royalties and paid when delivery or closing occurs. That money is treated as an advance against future earnings and is recoupable from those royalties or revenues as the project earns, rather than being a loan with separate repayment terms. This arrangement ensures the producer has a guaranteed return even if the project’s performance is uncertain. It’s not a marketing fee or a backend contingent payment after release, and it isn’t described as a loan against future earnings.