Why a CAMA?
As part of our educational series of blog posts at FilmChain, the industry’s first digital CAM, we want to outline the benefit, or, as some would stress, the necessity of signing a CAMA.
The CAMA — Collection Account Management Agreement, is an agreement which plays a crucial role in the financing and recoupment of independent audiovisual productions. Rather than having one party, such as the sales agent, collect all gross receipts, the partners on a project agree to appoint a collection account manager to become the independent custodian with the task of safeguarding and allocating revenues. The CAMA governs how the collection agent performs this task.
What could go wrong?
Film financing is inherently risky because it remains very difficult to predict the commercial success of any given project. On top of that, anyone investing their money or hard work into a feature film has to deal with a number of other uncomfortable factors:
When a film is finally released for distribution, revenues generated pass through many hands before they find their way back to producers, investors or other contributors.
→ Signing a CAMA means that there is certainty about the frequency with which revenues are disbursed once distributors have made payment. Beyond that FilmChain offers the unique benefit of paying out gross receipts in near real-time and without the need to exceed a minimum balance in the collection account.
As revenues pass through the distribution chain they could get mixed up in the general cash flow of a company that runs into financial difficulties (see above — film is a risky business) or that uses funds generated from one film for general overheads or other acquisitions.
→ Directing all revenues to a collection account managed by an impartial custodian holding the funds on trust for the parties means that each party will only gain access to the funds it is they are entitled to according to the agreed recoupment schedule.
It is not uncommon that the parties in a financing transaction have a different understanding of the commercial terms agreed upon and that this comes to light only when the first revenues are collected. There could also be unrelated disputes between some of the parties resulting in one party withholding payment to the detriment of everyone else involved.
→ Negotiating a CAMA under the guidance of an experienced collection agent will help to achieve alignment between the large number of separate agreements signed between the parties. The parties to the CAMA agree that the finalised recoupment schedule takes precedence over any other agreement when it comes to the allocation and disbursement of gross receipts.
At FilmChain we offer all parties the ability to check the visualisation of the recoupment schedule on the platform before any receipts are disbursed. In addition, the service announces every transaction for verification, where parties again have the opportunity to check for any inconsistencies or raise disputes. These features are unique in the collection landscape enabling the parties to rectify any errors in due course.
Working with manual processes and spreadsheets can result in mistakes when calculating entitlements and disbursing funds and in addition, errors can occur when executing a bank transfer.
→ Entrusting calculations and disbursements to an experienced specialist greatly reduces the risk of errors. Beyond that FilmChain’s calculation engine paired with seamless banking integrations and expert oversight all but eliminates the risk of errors.
In addition to mitigating risks, signing a CAMA with FilmChain comes with access to a transparent client dashboard giving all parties access to a full set of documents showing up-to-date information on distribution status and valuable analytics.
Our suite of documents has been created by the reputable Hannah Leader, Preiskel & Co and Lewis Silkin and can incorporate boilerplate terms from all major organisations such as Eurimages and the North American, as well as the UK Guilds.
Please email email@example.com if you are looking for some piece of mind.