pre-sales-collateral - MediaHedge Underwriting Knowledgebase

# Pre-Sales Collateral A pre-sale is an executed distribution or license agreement made before a project is completed. The distributor commits to a fixed minimum guarantee, commonly payable after conforming delivery and acceptance. For a financier, the relevant asset is the verified net receivable—not the headline deal value. > [!tip] Decision Point > A signed contract becomes financeable only after its parties, rights, conditions, delivery path, obligor credit, assignment and collectible amount all survive diligence. ![[assets/diagrams/repayment-source-map.svg|Conceptual map distinguishing contracted receivables from market-dependent rights and protection sources]] *Conceptual view: a pre-sale is stronger than an estimate because an identified obligor has signed a payment contract, but payment can remain conditional on delivery, acceptance and other terms.* ## The Bankability Chain 1. **Licensed rights:** the agreement identifies territory, media, language, exclusivity, term and other granted rights. 2. **Fixed obligation:** the minimum guarantee states amount, currency, installments and due dates. 3. **Delivery and acceptance:** payment conditions are compared with the actual production and delivery plan. 4. **Assignment and acknowledgment:** the receivable is assigned and the distributor acknowledges direct payment, duplicate notices and agreed lender rights. 5. **Controlled collection:** receipts enter the approved account and repay the loan through the [[wiki/concepts/cash-control-and-waterfalls|waterfall]]. ## From Headline MG to Eligible Net Value The gross contract amount is not automatically eligible collateral. Underwriting removes or adjusts for unexecuted or discretionary amounts, unsatisfied conditions, taxes, commissions, deductions, setoff, withholding, currency, timing, concentration and collection expense. The resulting eligible net receivable then enters [[wiki/concepts/loan-sizing|Loan Sizing]]. ## From Contract to Collected Cash | Stage | Financier's Question | Primary Evidence and Control | | --- | --- | --- | | Execution | Is the minimum guarantee final, binding and authorized? | Signed long-form agreement, party and authority verification, satisfied closing conditions | | Production | Can the project meet the contract? | [[wiki/concepts/full-financing\|Full Financing]], [[wiki/concepts/completion-protection\|Completion Protection]], budget and schedule controls | | Delivery | Are requirements and acceptance standards workable? | Delivery schedule, objective specifications, rejection notice, cure and deemed-acceptance terms | | Payment | What net amount is due, when and in which currency? | Acknowledged assignment, no-diversion direction, controlled account and waterfall | ## Diligence Questions - Are the agreement, legal parties, signatories, rights, minimum guarantee and installments final? - Which delivery, acceptance, rejection, cure, key-element, termination and force-majeure terms can delay or defeat payment? - What defenses, setoff, withholding, deductions, taxes and commissions reduce the collectible amount? - What does the distributor's credit and payment history indicate? - Are assignment, acknowledgment, payment, notice and amendment protections enforceable for the transaction? - Do the [[wiki/concepts/security-package|security]], copyright, completion and collection documents point to the same rights and proceeds? ## Limits and Evidence An offer letter, unsigned draft or future negotiation is not an executed receivable. A signed pre-sale can still be reduced, delayed, disputed or terminated. Interest and lender fees are not automatically obligations of the distributor. Final contracts, actual counterparty credit and the operative collection structure control the result. ## External Context Screen Australia's current [Market and Audience Insights](https://www.screenaustralia.gov.au/market-audience-insights/) reviewed 197 feature-film and television applications submitted from January 2023 through October 2025. It found marketplace finance—including distribution advances, minimum guarantees, pre-sales and gap—to be important but rarely sufficient on its own. Its August 2025 [Narrative Content Production Guidelines](https://www.screenaustralia.gov.au/getmedia/f1a9729d-1263-4cf4-b0b5-54a6ede23340/Guidelines-Narrative-Content-Production-rev-7-8-2025-issued.pdf) require evidence for finance-plan lines and, for specified applications, marketplace offers with terms, sales estimates and revenue projections. This is useful evidence of layered screen-finance practice, not proof that a particular pre-sale is eligible or collectible for MediaHedge. Links checked: 2026-08-09. ## Continue Exploring [[MediaHedge Knowledgebase|Home]] · [[wiki/syntheses/financier-diligence-route|Financier's Guide]] · [[wiki/syntheses/credit-lifecycle|Credit Lifecycle]] · [[wiki/syntheses/repayment-and-risk-map|Repayment and Risk Map]] · [[wiki/concepts/gap-collateral|Gap Collateral]]