Producers, distributors lock horns
A couple of disasters including “Bruce Lee” and “Akhil” exposed the farce of Non-Refundable Advance (NRA’s) and Minimum Guarantee (MG’) in T-town since distributors are now reportedly at the door step of producers like Dhanaiya and Sudhakar Reddy seeking refund of NRA and MG amounts they paid to procure these two big-ticket films.
Hyderabad: A couple of disasters including “Bruce Lee” and “Akhil” exposed the farce of Non-Refundable Advance (NRA’s) and Minimum Guarantee (MG’) in T-town since distributors are now reportedly at the door step of producers like Dhanaiya and Sudhakar Reddy seeking refund of NRA and MG amounts they paid to procure these two big-ticket films.
- Producers need not refund NRA and MG as per agreement but few unprofessional distributors are adopting arm-twisting tactics to recover money from hapless producers
- Many established producers are shying away from making films to avoid harassment at the hand of distributors which is unhealthy
According to industry sources, more than Rs 30 crore were lost in these two films along with Rs 20 crore in other flops like “Puli”, “Tripura’, ‘Uttama Villain” to mention a few which has put producers and distributors at loggerheads.
“It’s a very unfortunate situation in T-town, since now distributors are even demanding refund of Non-Refundable Advances given to the producers. Even though, producers need not refund NRA’s and MG’s as per their agreement, but few unprofessional distributors are adopting arm-twisting tactics to recover money producers of these films, which is nothing but unfair and blackmailing,” laments producer Mohan Goud.
Producers of big-ticket films sell their films on two terms-Non-Refundable Advance and Mininum Guarantee (MGs) basis-and distributors who buy those films had to bear the complete loss if any, but now they are shifting it on respective producer, which is against breach of contract reached between producer-distributor.
For example- a big film will be sold for Nizam area at Rs 10 crore (out of which Rs 8 crore is non-refundable and 2 crore refundable). “Will these distributors pay producers, if they earn Rs 20 crores out of their Rs 10 crore investment, if the film turns out to be a blockbuster” asks producer Nayimuddin, who claims that producers are willing to repay ‘refundable’ amount, but definitely not NRA.
Until apex body of T-town, Telugu Film Chamber of Commerce forms a committee to redress this issue and reduce pressure on producers, otherwise T-town productions will take a beating. “Many producers are shying away from making films, which is unhealthy for industry.
Just to avoid harassment at the hand of some distributors who are behaving like hooligans. NRAs and MG’s need not be returned by producers, but still producers are going through sleepless nights, if there film turns out to be a flop. We need to enact a special law at the earliest,” says Prasanna Kumar, Telugu Film Chamber of Commerce.
By BVS Praksh
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