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Generic Advance / Pre-purchase

By Catherine Considine
Generic Advance / Pre-purchase

Most of you will be aware of recent discussion about advance/ pre-purchase. To reiterate this is not allowed within the current PACT / Equity Agreement. There are obvious concerns about setting a precedent for the future – if individual terms of the standard agreement are eroded it undermines the whole.
That said, Equity accepts that such deals are being discussed and suggests that provided it’s against fixed percentage, and not against a royalty, they cannot foresee any initial problems under the following disclaimers:
o The advance CANNOT be used against the application of the 17% royalty for sales to the US
o The advances offered shall only be against the US fixed residuals as defined within appendix TA 5 (a)
o The contracting producer shall provide to Equity on each title availing themselves of this structure confirmation that the contracting producer shall remain liable for any top up payments in the event of a sale to any US market, as defined within appendix TA 5 (a), that the contracting producer will inform me of any sale and to whom the sale has been made and further that the appropriate top up payment becomes due on any sales receipt or on transmission whichever is the earlier. The licence period remains 7 years for each US market acquired in line with the aforementioned Agreement.
o PACT will assist with the compliance of these terms
o This structure is without precedent and is agreed to resolve only the current productions only.
Kind regards,
CC