| C1103 |
Distributors’
Gross Revenue shall mean all monies derived by the Producer, the Head
Distributor and/or sub-distributors, as provided below, in any manner whatsoever
from the distribution of the production, including through the sale, license or
other like means of distribution of the production and shall be calculated
before or simultaneously with any other gross participants from first dollar,
without deductions of expenses of any kind. For greater certainty:
- Monies derived
though the exploitation of ancillary, allied and underlying rights and like
rights, such as merchandising, novelization and sequel rights, shall not be
included in Distributors’ Gross Revenue.
- Distributors’ Gross
Revenue shall also mean all monies received by those Distributors with which
the Producer has entered into a distribution agreement (the “Head Distributor”)
in respect of the production.
The Distributors’ Gross
Revenue shall also include all monies received by sub-distributors which:
- are Related
Persons to, or which do not have an arm’s length relationship with, the
Producer or the Head Distributor, or,
- have an obligation to report and
remit Revenue directly to the Producer or Head Distributor.
- Sale revenues (including
pre-sale revenues, i.e. sales made prior to production) shall be included in
Distributors’ Gross Revenue. A sale means the grant, to an end user, of a
licence or rights to utilize a Production, for consideration. Distribution
Advances, i.e. advances received by a Producer from a Distributor, shall not be
included in Distributors’ Gross Revenue for the purpose of triggering the
payment of Distribution Royalties to Writers; however, a Distributor shall not
be entitled to deduct the amount of the Distribution Advance from the
Distributors’ Gross Revenue for the purpose of calculating the Distribution
Royalty. Monies received by Distributors pursuant to Article C1103 b) above
shall be considered Distributors’ Gross Revenue whether or not the Distributor
has recouped its Distribution Advance.
- Notwithstanding the
foregoing, Distributors’ Gross Revenue derived from the sale or rental of
Compact Devices (excluding any secondary use) shall be deemed to be equal to
twenty percent (20%) of the wholesale selling price of such Compact Devices,
provided that in the event that the wholesale selling price is at or less than
the typical sell-through price to wholesalers (currently $30 per unit), the
deemed Distributors’ Gross Revenue shall be ten percent (10%).
- Packaging. It is
acknowledged by the parties that distributors may seek to diversify their risks
by packaging more successful and less successful productions. Where
productions are packaged together for the purposes of distribution, the parties
shall allocate the revenue attributable to each individual production, subject
to the right of the Guild to refer any difference to Arbitration under Article
A5.
- Official Treaty Co-Productions
- While
Distributors’ Gross Revenue includes revenue from all sources on a world wide
basis, in respect of Official Treaty Co-productions certified by Telefilm Canada or byany
successor organization, the Distributors’ Gross Revenue shall be:
- all those revenues
derived from the distribution of the Official Treaty Co-production in those
territories to which the Canadian co-producer is exclusively entitled to
distribution revenues and has no obligation to report or remit revenues to the
foreign co-producer;
- a proportion of those
revenues derived from the distribution of the Official Treaty Co-production in
those territories in which the Canadian co-producer is entitled to distribution
revenues on some shared basis with its foreign co-producer, which proportion shall
be equal to that proportion of revenues agreed by the co-producers to be paid
to the Canadian co-producer from such territories (the Canadian Share). The
Canadian Share shall be no less than the percentage of the total amount of the
production budget financing derived, directly or indirectly, from any Canadian
source(s).
- Prior
to production, the Producer shall disclose the production’s status or intended
status as an Official Treaty Co-production to the Guild and will provide the
following information to the Guild:
- the name
and legal status of the co-producers;
- the details of the
agreement between or among the co-producers in respect of the manner in which
the revenues from the Official Treaty Co-production will be divided between (or
among) them, including details of territories to which either co-producer is
exclusively entitled to distribution revenues and has no obligation to report
or remit revenues to the other, and any material amendments to the agreement in
such respect; and
- evidence, satisfactory to the Guild that the
Production has been approved by Telefilm Canada and the competent foreign authorities as an
Official Treaty Co-Production.
- If the Association
negotiates a definition of Distributors’ Gross Revenue (or the equivalent)
which in some or all aspects is superior to the definition in this Article,
with any other trade union or association that bargains collectively on behalf
of its members, the definition hereunder shall be amended to reflect the
improvement.
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