Net Profit Split
Splitting profit after agreed costs, rather than paying a share of revenue
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A net profit split divides profit after agreed costs rather than paying a royalty on gross revenue. It is common in independent labels, joint ventures and producer deals: recording and marketing costs are recovered first, and the balance is shared in the agreed ratio.
The ratio matters less than how "net" is defined: which costs are deductible, when deductions stop, and whether they cross-collateralise can turn the same 50/50 into very different outcomes. The usual mistake is to assume a profit split is fairer than a royalty: with loose cost definitions, profit may stay at zero. This is general information, not legal advice.
Read deeper → recoupment
Sources
- 净利润分成的合同结构，参通行音乐产业教材；本文为通识说明，不构成法律意见
Used for fact-checking only; all prose is original.