Film-Tech Forum ARCHIVE: Free Passes and Box Office Revenue

This is topic Free Passes and Box Office Revenue in forum Ground Level at Film-Tech Forum ARCHIVE.

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Posted by Dan Chilton (Member # 2288) on 04-15-2004, 11:53 AM:

Do you have to figure free passes into the total box office revenue when figuring the distribution percentage?

For instance (this will be a simplified scenario), if your tickets were all $5 and you had 10 people show up, 8 who paid and 2 who got in with free passes. Would you report $50 as your box office take or $40?

Posted by Jeremy Fuentes (Member # 2135) on 04-15-2004, 11:58 AM:

I think it should be $40, because freepasses do not have any cash value to them.

Posted by Adam Martin (Member # 641) on 04-15-2004, 01:32 PM:

It depends on your contract with the distributor. Usually, you are allowed a certain number of free admissions that you do not have to pay the distributor for.

Posted by Darryl Spicer (Member # 711) on 04-15-2004, 02:06 PM:

I think it is pretty much as Adman stated above. That is one reason there is usually a pass restriction on the films for at least two weeks. Any passes that would be taken on one of these I think has to be covered by the company. Only employees of the theater playing the film could see the movie on a pass and normally not on the weekend if it is selling out. But the company still has to cover that pass.

Posted by Jack Ondracek (Member # 1466) on 04-16-2004, 11:49 AM:

A pass is a pass. You didn't get the money, so you don't show it on your report as income...

On the other hand...

This makes the studios a very interested partner in how you're presenting their product... especially if you're a first-run house.

Adam is correct about the contractual limitations on passes. Generally, it's something like 2%, but it can be lower. Of course, like other discussions here regarding contract terms, this all loosens up as the booking ages. In some cases, there's some attention paid to whether it's a matinee or not.

Legally speaking, the studios want to see how many passes you issue on your boxoffice report... something that takes on real meaning if you tend to let a lot of people into your theatre for free... and the film company sends a checker to your place to verify the auditorium count against what you actually report back to them.

Posted by Gordon McLeod (Member # 33) on 04-16-2004, 01:09 PM:

Up here to the north Passes must be declared for sales tax purposes as a paid admission and the tax department has been running around auditing theatre (if they didn't have better things to do)

Posted by Ky Boyd (Member # 23) on 04-16-2004, 10:12 PM:

If you really want to know for sure, read the license agreement from the distributor in question. The license agreements, usually sent out annually by each studio to the owner or home office, are very, very specific about how film rental is calculated and the issue of passes is specfically addressed. In some cases, such as Sony Classics or Screen Gems, they use the parent company's agreement.

Posted by Dave Williams (Member # 299) on 04-17-2004, 10:28 AM:

I have seen limits as small as 0.5% and as high as 5.0%. Thats a range of 2 up to 20 for an auditorium seating 400. If I were the studio, I would WANT to definately limit the number of passes, and be suspect of a theater that wanted higher percentages in thier exibition contracts. It would sound like either bad presentation policies, or just bad management in general handing out passes like they were candy.

Ciao

Dave