Ethical Profit Share

Be You Productions uses a model of paying our cast and crew we refer to as ethical profit share.

To properly explain what we mean by ethical profit share, we’ll first need to break it down:


Profit

Profit is the money you have left over from your revenue/income (money that’s given to you, usually through ticket sales) after you’ve taken out your expenses (in theatre, these are usually venue hire, theatre hire, wages, lighting, sound, props, costumes, set).

This equation is easily expressed as Profit = Income – Expenses.

With this understanding in mind, you can see that the more expenses you commit to, the more tickets you must sell to make back the expenses (break even) before you start to make profit. There can be a bit of wiggle room as to what is counted as profit – it’s good to ask for the company’s definition if you’re in a profit share agreement.


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Share

Now that we know how to identify profit, what is a share? This is traditionally expressed as either a percentage or a unit, which will be outlined in a profit share agreement. For example, you may receive one share of four - or 25%, or one share of ten - or 10%.

You should have a formal written agreement on how and with whom the profit should be shared. A formal agreement will not only show you how much you can expect but also will provide a clear agreement between you and every member of the production, hopefully lessening future disputes.

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Ethical

An ethical organisation demonstrates respect for its people by valuing opinions and treating each employee as an equal. We believe this extends to how a producer and organisation approaches money management. After all, if you’re in a profit share agreement, the money that ends up as profit is partly yours.

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Common Practice

Some companies will spend money and raise expenses, and then rely heavily on ticket sales to bring in enough income to cover these expenses. This can see them raise ticket prices so they may spend more money without certainty that an audience will pay those higher prices. I believe this practice puts too much pressure on a cast to both perform the show while acting as a marketing team to fix the issues created by a production team, and is unsustainable.

Ethical Profit Share

Our model of profit share is different to the above scenario – we work to keep expenses as low as possible by encouraging creative solutions to storytelling problems. When expenses are low, and income is steady or high, profit is much easier to achieve. It comes down to how to create and maintain a minimal budget. Money is not always required to convince an audience when you have true storytellers.

If they wish to spend any money, our production team must have agreement from all people that are part of the profit share before the producer will sign off. All performers are part of the decision-making process as they have a vested interest in how money is spent.

Finally, we share our budget, spending, forecasts, and actual spending with every cast member as it happens. They can look at this document at any time to see what’s happening without having to ask, can query anything on the spreadsheet at any time, see how many seats are needed to start making profit, and the updated share of profit they will receive as at that moment in time.

 

How do I do this for myself?

The MEAA has a template document called The Equity Co-op agreement for use in starting your own profit share agreement. They also have a Co-op Kit for Profit Share Productions with a lot of information on how to produce a show with ethical profit share in mind.

We would suggest:

  • adding in the ethical elements above to any profit share agreement you create or are part of

  • If you agree to share a profit you should have a reasonable amount of input as to how much profit is made before you’re asked to sell more tickets

  • Focus on lowering expenses rather than trying to sell more tickets and you’ll have an easier time

 

Other payment options

You may be under a cooperative or co-op agreement, which is very similar to profit share.

You may also receive a stipend or honorarium instead of or along with a profit share agreement; this is a single payment to you after the show wraps up and is guaranteed, though it would be considered an expense paid before profit is made.

 

If you have any questions, or want more clarification, leave a comment below.

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