What does TIFF (the Toronto International Film Festival) entail? Distribution deals! And what do distribution deals entail for lawyers? Checklists! While too simple for a long-form agreement, this checklist highlights the basic elements which should be present (or at least considered) in the drafting of even a short-form or “deal memo” arrangement.
- Proper identification of parties
- Scope of rights (by media; indicate any reserved rights)
- Territory (if territory not world, geo-gating of online rights)
- Term (any right of reversion (e.g., for failure to meet performance thresholds)?)
- Fee/advance (payment schedule)
- Disposition of receipts (amount of commission (inclusive of sub-distributors?); definition of commissionable base (e.g., gross or net); recoupment of advance (interest?); recoverable expenses; home video royalty; cross-collateralization)
- Reporting (frequency)
- Audit rights (incl. payment for audit costs if discrepancy over threshold)
- Release commitments (e.g., theatrical release, minimum number of theatres)
- Marketing commitments (e.g., minimum spend per territory)
- Consultation/approval rights over marketing and release
- Distributor’s editing rights (censorship, timing, etc.)
- Assumption of guild obligations
- Assumption of profit participation, box office bonus, etc. obligations
- (for Canadian content productions) Canadian status of distributor for Canadian territory and inability to sub-license to non-Canadians and commitment to exploit in Canada within two years of completion of production
- Delivery obligations (date(s); materials (access or physical delivery))
- E&O insurance coverage
- Termination rights for breach (and opportunity to cure), bankruptcy (and for Canadian productions, failure of distributor to retain Canadian status)
- Assignment clause
- Governing law clause
- Dispute resolution clause (arbitration; court; choice of forum)
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