This is the clause that is of most concern to a bank or potential financier. At one time, producers would acquire all rights in the underlying work for the full period of copyright. This would enable the producer to exploit the rights by all means and in all media without any restrictions whatsoever and without the obligation to make any further payments except to certain performers in relation to residuals, repeat fees, or other collection organizations.
Now that deals have become much more complex, both in the acquisition of rights and in the financing process, producers often may obtain limited rights to make only one film. If this is the case, it is prudent to negotiate in advance, upon payment of a further fee, the right to make prequels, sequels or other derivative works based on the underlying rights.
The financier's or banker's lawyer reviewing this clause in an agreement will set out, in detail, all the rights that the producer is entitled to exploit. The report will set out if there are any reserved rights, such as publication, stage or radio rights or any rights that the producer is not entitled to.
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