| Commentary

411 Subsidiary profits

| Commentary

411 Subsidiary profits

In addition to subsidiary rights, a company acquiring distribution rights under a production financing and distribution agreement may have subsidiary home video publishing or advertising companies which may exploit the rights in the film or its subsidiary or ancillary rights. Whether or not these rights remain available to the subsidiary on arm’s length terms or on the best obtainable commercial terms, the subsidiary will make a profit out of this exploitation which profit will not normally be passed back to the producer.

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