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<blockquote data-quote="TheSword" data-source="post: 8889609" data-attributes="member: 6879661">I think the difficulty with basing licensing fees above a threshold on profit, is that it is easy to work the accounts to minimize paper profits. Which I suspect is why WotC is targeting revenue. It’s particularly easy for SME’s that don’t have so many shareholders and are likely to be family businesses or partnerships. Directors can pay salaries - including to themselves to eat up any profits, albeit with personal tax implications, or they can invest back into the business - increasing its value (and their wealth) without generating profit.A better system is to make the fee based on revenue but, and more modest and scaling as suggested - with increasing percentages only increasing on the sales over the threshold.I would also suggest while irrevocability is just not feasible (what responsible company would bind its hands like that) a fixed term with review makes more sense. Five years then a review with the understanding that anything published within that time is safe and can continue to be sold even if the license is revoked,After all, the other big IP’s, Star Wars, LOTR, Warhammer aren’t given in perpetuity. The license&nbsp; is voluntary after all, it should last for as long as it’s working for both parties.</blockquote>

[QUOTE="TheSword, post: 8889609, member: 6879661"] I think the difficulty with basing licensing fees above a threshold on profit, is that it is easy to work the accounts to minimize paper profits. Which I suspect is why WotC is targeting revenue. It’s particularly easy for SME’s that don’t have so many shareholders and are likely to be family businesses or partnerships. Directors can pay salaries - including to themselves to eat up any profits, albeit with personal tax implications, or they can invest back into the business - increasing its value (and their wealth) without generating profit. A better system is to make the fee based on revenue but, and more modest and scaling as suggested - with increasing percentages only increasing on the sales over the threshold. I would also suggest while irrevocability is just not feasible (what responsible company would bind its hands like that) a fixed term with review makes more sense. Five years then a review with the understanding that anything published within that time is safe and can continue to be sold even if the license is revoked, After all, the other big IP’s, Star Wars, LOTR, Warhammer aren’t given in perpetuity. The license is voluntary after all, it should last for as long as it’s working for both parties. [/QUOTE]

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