A Very Dense Explanation of the CAM/CAMA and Why You Should Care About One.
What is a CAMA? Why do you need one?
As someone working in the film biz, you might hear CAMs or CAMAs thrown around during financing, production and/or the delivery phase. If you’re a producer, financiers or talent reps might be asking whether you’re planning to engage a CAM. If you’re a financier or a non-financing profit participant, you might be wondering how will you ever know if the film is generating revenue and whether you’re entitled to be paid as a net profit participant. The answer to all your prayers is the CAM/CAMA.
OK so let’s get to it - what’s a CAM/CAMA and why should you care about one? This one’s going to be a little dense, but here we go.
Within the film business, a “CAM” stands for a Collection Account Manager - a neutral third party that is appointed by the producer and serves to collect all sums that constitute gross receipts (i.e., the revenue of the film generated from exploitation). The CAM then disburses those gross receipts to the producer, financiers and any other individuals or entities entitled to payments in accordance with the recoupment waterfall in the applicable financing agreements. Translation: for every $1 that the film makes, the CAM will allocate that $1 as agreed by all parties entitled to that $1 (or portions of the $1).
The CAM’s obligations are set out in what’s referred to as a “CAMA” - the Collection Account Management Agreement. Here, what constitutes “gross receipts” and “net receipts” is defined very clearly, and the manner, timing and order in which those receipts are disbursed is also set out and agreed to. The CAM also agrees to issue periodic payments and accounting statements to parties and “beneficiaries” of the CAMA (read on). Put briefly, the CAMA is the bible once the film starts generating revenue.
Ok, so by this point it’s pretty clear the CAM is a pretty important person, and the CAMA is a pretty important documents, but why you should care about one depends on where you sit within the film.
If you’re a producer, you should care because:
Once you’re done with the film, you don’t want to be the one responsible for collecting revenue and disbursing to your financiers, talent, guilds/unions etc. That’s a lot of work. And you’ve got several other projects in development and another going into production which you need to be focused on.
Appointing a CAM adds a level of accountability and transparency with your financiers. It gives them confidence because the CAM is highly specialized and literally only has one job – to pay everyone what they need to be paid as directed by the CAMA. Unlike the producers and the financiers, the CAM doesn’t have an interest in the film (other than the small administrative fee they take for their services).
The CAM will also pay any residuals due directly to the applicable guild/union.
Do you really want to be the one responsible for (hopefully) millions of dollars, paying talent, financiers, guilds, unions and issue accurate reports and accounting statements? Yeah, didn’t think so.
If you’re a financier of a film, you’re going to want to care about a CAM being engaged at the right time for all of the above reasons – you want to make sure that you’re accurately recouping your investment and any return at the right time, as was promised to you (provided the film generates sufficient revenue!) and that each dollar generated by the film is accurately being accounted for and disbursed. You’ll want to make sure the CAM appointed is reputable and experienced, and that you have visibility by way of the accounting statements the CAM issues.
If you’re talent or other third-party participant of net receipts e.g. director, writer, performer, producer for hire, you should care about the CAMA because without one, you are relying on the producing entity employing you to make the right calculations, do the right thing and pay you what you are owed if the film is successful enough to generate net receipts. Generally a net profit participant that is not a financier, won’t be party to the actual CAMA but they might request they be a “beneficiary”. By being labelled a “beneficiary” to the CAMA, you get all the benefits of being a party to the CAMA without actually being a party to the CAMA. As a beneficiary, the CAM will directly pay you, and provide you with accounting statements. Perk alert!
So in sum, a CAM is like Mary Poppins – you might not realize you need one until you do and they’re there on your doorstep and then there’s a collective sigh of relief.
Questions? Drop us a line.
Disclaimer: This post should not be construed as legal, commercial or financial advice and should be used for informational purposes only.