Commentary

404 Application of distribution income and derivation of profits

ENTERTAINMENT AND MEDIA vol 15(1) commentary, music industry documentation
| Commentary

404 Application of distribution income and derivation of profits

| Commentary

404 Application of distribution income and derivation of profits

Although there is no universally standard method of applying the distribution income, the receipts of the company under a production financing and distribution agreement might be applied in payment of the following sums in the following order:

  1. 404.1

        distribution fees;

  2. 404.2

        distribution expenses, including residuals and repeat fees;

  3. 404.3

        cost of production;

  4. 404.4

        interest on the cost of production;

  5. 404.5

        sums payable to the completion guarantor;

  6. 404.6

        interest on the completion guarantee;

  7. 404.7

        deferments and contingent fees;

  8. 404.8

        percentage participations in profits.

Under a production financing and distribution agreement the company

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