Film Completion Guarantees
How completion guarantees work in the film industry and why they matter.
Robert Downey Jr couldn't get cast in movies for a while because he couldn't get an insurer to offer a "completion guarantee" for him. Eventually Mel Gibson paid for it. This is a wild story on his Wikipedia page.
What is a Completion Guarantee?
A completion guarantee is a form of insurance offered by a completion guarantor company in exchange for a percentage of the film's budget.
It insures that the producer will complete and deliver the film to the distributors, even if the film's directors and crew encounter problems during production.
How It Works
The guarantor essentially keeps a very close eye on the production and requires daily production reports.
In some cases, if they're not confident the film will be completed successfully, they'll fire the director, crew, etc. and take over production themselves.
This guarantee that the film will ultimately be produced (even if things get messy) gives distributors confidence. As a result, distributors are willing to pay minimum distribution guarantee payments upfront.
This then allows the distributors to pay these minimum distribution guarantees to the producer, which often funds the production itself.