What are "net points"?

Question

Can someone explain what "net points" are in regards to the sales of a movie?

Usenet · Accepted Answer

Short answer: Something you're given in negotiations that doesn't exist. Eddie Murphy called them "monkey points."
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Usenet · Answer

[nq:1]Can someone explain what "net points" are in regards to the sales of a movie?[/nq]
Okay "points" refer to percentage points percentage points of the profit that the movie ultimately makes.
Now, there are two kinds of points that one can, in principle, negotiate.
Gross points and net points.
Gross points or gross profit participation means that you are negotiating a percentage of the actual money that comes in at the box office the gross receipts. Those dollars that people pay when they go in at the theatres.
Each one of those dollars is divied up. Depending on when in the movie's run that dollar comes in, the theatre itself takes a certain percentage, distributor takes a certain percentage, producers take a certain percentage and if you've negotiated a gross point deal, you are one of the people who takes a cut of each and every one of those dollars.Net points are a completely different thing. Net points are derived from a "profit definition" which may vary from one contract to another, from one individual to another even on the same project. These definitions, as a rule, set up a hierarchy of things that have to be paid back and paid off before you get your first dollar. Among these things are the negative cost of the movie, that is, all the money that the investors put in, costs of prints, advertising, distribution, including interest and the ever-popular "overhead." There are movies that have, in fact, made back many times their actual negative cost and yet have not and in fact never will achieve break even on their "profit definitions" such that they will ever reach a point where they will start to pay net points.

That's because the definitions are such that "break-even" is essentially unachievable.
That's why they are frequently refered to as "monkey points." Nobody really takes them seriously.
As an alternative, many writers these days prefer a system where you would receive bonus payments when and if a movie reached certain box office landmarks as reported in some generally accepted venue such as Variety they report fifty million dollars, you get another hundred grand, makes a hundred million, you get another hundred or whatever. So that you do get more money if the movie performs, but it isn't tied to some net point *** that's never going to pay off.

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What are "net points"?

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