| Commentary

422 Producer's net profits and net profits

| Commentary

422 Producer's net profits and net profits

The distinction between net profits and producer's net profits is similar to that between an override royalty and a royalty based on receipts. If it is supposed that a film is financed 100% by an independent financier who is entitled to participate in 50% of the net profits by virtue of having provided the finance, then if such financier agrees that the producer is to receive 50% of the remainder (ie 25% of 100% of net profits from a film), and the producer has to pay a participation of 2½% of net profits

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