Clause & Effect: <b>Non-Monetary Benefits' Impact on Royalty Rights</b>

A right to net-profits participation from entertainment products has often been criticized as meaning little, given the many disputes that have arisen over non-payment. Even producers of highly successful products may argue that their ventures netted little or no net profits. Thus, revenue participants who obtain the right to a percentage of gross or adjusted-gross profits are usually considered in a better position than net-profits participants. Still, a right to gross profits has its pitfalls. A key issue is what revenues belong in the gross-profit pool.