Licensing Deal Economics Calculator
Model the financial structure of a licensing deal. Calculate royalty income, advances, guarantee coverage, and net economics for licensors and licensees.
Both sides of a licensing deal
Model the financial structure of a licensing deal. Calculate royalty income, advances, guarantee coverage, and net economics for licensors and licensees.
How the deal is modelled
- Units grow each year at the growth rate; royalties = units x wholesale price x royalty rate.
- The advance (minimum guarantee) is recouped against royalties. The recoup year is the first year cumulative royalties reach the advance.
- Total licensor value = the advance, plus any royalties earned above it over the term.
- For the licensee: gross margin per unit, net per unit after the royalty, and the royalty as a share of gross margin (under 30% is comfortable, above 50% is heavy).
Keep going
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