A Terms of Trade Primer - Part 6 (Equity)


With apologies for the delay, this is the sixth installment in our series about the new Terms of Trade applicable to the English-language Canadian private broadcasting industry (Part 1, Part 2, Part 3, Part 4, Part 5). This installment focuses on Section 7 (Equity) of the Terms of Trade Agreement. This is the sixth of an anticipated nine eight posts which will be posted over the course of the next week little while and which will cover the Terms of Trade in detail. Once all nine eight posts have been published, the archived posts will be available at this link.

What do the Terms of Trade say about... equity investments?

The provisions in the Terms of Trade Agreement which speak to equity investments are primarily concerned with specifying when an investing broadcaster can recoup its investment. There are no limitations on the amount that a broadcaster can or must invest (though, for "programs of national interest", meeting certain dollar thresholds means the recoupment gets handled in a certain way), nor are there any parameters regarding when an investment must be made (i.e., the payment schedule for when the broadcaster has to actually advance the funds). The Agreement states that the making of an equity investment is "at Independent Producer's discretion"; it is unclear what effect this phrasing is meant to have, since it clearly is the broadcaster who decides whether it wants to make an equity investment - perhaps the intention is to prohibit broadcasters from making their offers of license fees contingent upon being also allowed to make an equity investment in the program?

Please see full article below for more information.

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