some of you might know i am working on a film project at present. i have been dealing with a firm who wish to take up merchandising rights for the film.
We haven't decided on what will be produced etc (but my firm has sole discretion on that topic)
However they are asking for 50% of the revenues from merchandising (they will facilitate, designs, production, distribution etc etc)
this doesn't sound right to me(on the whole, i don't know how much of a merchandising market India has to begin with)
they are picking up some other promotional rights to the film as well which involves money where their cut is 15% but for merchandise its 50%...
what do you yall think?
If they are going to be responsible for the development and manufacture of products and pr associated with the merchandize related to the project, it could be fair. Do you want to deal with those headaches?
That's fifty percent of an effort that you don't have to deal with.
Pat Hacker, Visit Scooter's World.
It sounds to me that some legal input is needed. How about making them put togeather a financial report, something to hold them too. I also think that it would be a really good idea for you to have final approval on the appearance of all produces being made. I have seen some very sad looking Sherks.
personally, it sounds to me like they are doing all the leg work
i would accept 50%
obviously if you can get more great, but your first profit is your best profit
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Certainly get the advice of a business attorney.
Pat Hacker, Visit Scooter's World.
Getting a lawyer is a must. From what I understand, your licensing agreement should spell out what items will be produced (socks, toothbrushes, books, etc.), the geographic area where the products are to be distributed, and for how long the agreement should last. I think a typical term is 2-3 years. As for the percentage, a good licensing lawyer should be able to help you with what's realistic and what isn't.
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I want to echo the advice to get an experienced entertainment lawyer to give you guidance on this. At the same time, I want to add that a 50/50 split seems quite reasonable to me especially given the work that they will be doing. I've seen a lot of agreements where the split is 60/40 or even less.
However, there is one big caveat to the above statement: you want to clarify the definition of 'revenue.' Is this net or gross revenue? If it's net revenue, you need to be careful of what items (expenses) are being included in the calculation of 'net'. This is where a good lawyer really earns their keep ;-). 50% of gross revenue is a very different equation from 50% of net. While it's very difficult to predict how successful any merchandise will be, this can be a very lucrative area so you want to be sure you're getting
Best of luck!
g