Ann: Appendix 4C December 2016, page-211

Hi Longman

That is a hard one, most of the time it seemed gut feel with some rough numbers behind to try and justify.

I was normally after the event, but on a couple of pitches I did get involved in, it works from the basis of what revenue over the life of term you will generate. Remember normally you pitch against others who are equally interested.

Recovering the upfront plus making a profit that met internal rates of return is what you are after.

As for the license fee that is dependent on the negotiation to get you over the line vs what the IP holder wants. In film, the film maker wants cash to make the film or recover the costs asap, but as a purchaser you do not want to over pay as the film might be a dude. Same applies.


There was no real model as to what % made up the upfront compared to life of earnings.

remember the upfront is recoverable by the purchaser, before a royalty is paid.

That's all I can add.
Cheers