Share this Page URL

Contract Highlights > Compensation - Pg. 232

Licensing Rights Granted 232 The rights granted in a television production contract fall into two categories: the right to create licensed entertainment and the right (including the right to sublicense) to distribute, exhibit, and sell it. Distribution and exhibition rights are rather straightforward: the licensee will need the right to sell and exhibit (and permit others to sell and exhibit) any productions. Production rights are a bit more involved. As with a film, the licensor and licensee may be contracting before they know that the product will find interested parties to finance or distribute the production. Therefore, the rights may be broken out into categories so that, should the production hit a dead end, the licensor can get its rights back. These categories may include: · Pre-production. Pre-production rights must be granted for the licensee to have the authority to create derivative products like treatments, scripts, bibles, and artwork to pitch the production. · Series. This is where the licensor would specify that the licensee may produce animated but not live-action motion pictures for television broadcast. · Associated Productions. The producer of an animated series almost always acquires either an exclusive option or a right of last refusal (see Chapter 6, "The Publishing Contract") to create animated feature films, television specials, spinoffs, and direct to video productions for as long as the producer is actively creating a threshold number of new series episodes per season (and possibly for a limited time afterwards). Compensation The licensor receives two different kinds of compensation, rights fees and service fees. Unlike the previous example of a film option, the licensor does not look to the production for the bulk of profits. Instead, most of the revenue will be from the merchandise and toy sales driven by the show, a