Recoupment affects the timing of payments of revenues relative to the advance in that payments of revenue shares are contingent on what event?

• A. Signing a new contract
• B. Paying taxes
• C. Recouping the advance
• D. Event attendance thresholds

Answer: (C)

The timing hinges on recoupment of the advance. In these deals, the upfront money you receive is an advance against future royalties. The financier recoups that advance from the revenues generated by the work—often from gross or net receipts as defined in the contract—before any ongoing revenue shares are paid to you. Once the advance (and any other specified costs allowed to be recouped) has been fully recouped, the royalty payments kick in according to the agreed rate. So the event that makes revenue shares payable is the completion of recoupment, not just signing another contract, paying taxes, or hitting attendance targets.