Due-diligence checklist for signing with agencies or licensing IP

Before You Sign: A Practical due-diligence checklist for agency deals and IP licensing (2026)

Hook: If you’re an organiser or small business buying agency services or licensing content, the wrong clause can cost months of rework and six-figure revenue hits. In 2026, with agencies consolidating transmedia IP and AI-driven content use becoming a standard ask, a fast, repeatable due-diligence checklist is your best defense.

Why this checklist matters now (short version)

Late 2025 and early 2026 saw renewed agency activity around transmedia IP — for example, new agency signings of independent IP studios have pushed urgent questions about who controls derivative rights and global exploitation. At the same time, courts and platforms are clarifying how AI training and output rights intersect with traditional licensing. That combination means you must validate rights, revenue models, exclusivity, and exit mechanics before you sign.

Quick checklist — 12 must-run checkpoints (one-sentence scan)

1. Confirm ownership and chain of title — vendor provides executed assignments, contributor agreements, and releases.
2. Define grant scope — media, territory, term, language, and distribution channels (including AI platforms).
3. Revenue model & royalties — clear split, reporting cadence, audit rights, and minimum guarantees.
4. Exclusivity terms — limits, carve-outs, performance thresholds, and step-downs.
5. Sublicense and assignment — who can sublicense, and what happens on change-of-control.
6. Deliverables & quality standards — formats, acceptance tests, and remediation timelines.
7. IP reversion & termination triggers — automatic reversion, breach remedies, and notice periods.
8. Audit, reporting and escrow — audit frequency, sample reports, and payment escrow for claims.
9. Indemnities & warranties — clear limits, IP warranty scope, and carve-outs for prior claims.
10. Data & privacy — PII handling, analytics rights, and compliance with cross-border rules.
11. AI use and training rights — explicit allowance or prohibition to use content for model training and generated output rights.
12. Exit mechanics & transition assistance — migration support, handover timeline, and fee caps.

Deep dive: What to verify and why

1. Ownership & chain of title (stop if unclear)

Before discussing money, verify who actually owns the IP. Ask for:

• Fully executed assignment or authorship proofs for core material.
• Signed contributor agreements from creators, freelancers, or contractors.
• Proof of trademark registrations or pending applications (if relevant).
• Any third-party licenses embedded in the work (font licenses, stock assets).

Why: Without a clean chain of title you inherit litigation risk. If ownership is ambiguous, add escrow of proceeds and clear indemnities — or walk away.

2. Grant scope: media, territory, term, and channels

Define the grant with surgical precision. Vague language (“all media now known or hereafter devised”) is efficient for the agent — dangerous for you. Break the grant down into:

• Media: film, TV, streaming, podcasts, live events, merchandising, NFTs, AI training datasets.
• Territory: exclusive vs non-exclusive zones; use country lists rather than global catch-alls.
• Term: fixed term with renewal mechanics, or term tied to exploitation (e.g., 5 years post-first exploit).
• Channel carve-outs: social snippets, promotional use, educational licensing.

Include explicit exclusions for categories you want to preserve (e.g., educational uses, internal operations, or proprietary platform features).

3. Money: royalties, revenue share, and minimum guarantees

Negotiation should squarely address how you get paid and how income is verified:

• Define gross vs net revenue for splits; prefer gross receipts with defined deductions.
• Set a clear royalty percentage or tiered revenue share model and state if it’s reciprocal for sub-licensing.
• Negotiate a Minimum Guarantee or Advance where appropriate and determine recoupment rules.
• Set payment cadence (monthly/quarterly) and late payment interest.
• Include audit rights and a practical audit window (e.g., 24 months after statement delivery).

Practical tip: If an agency resists audit rights, demand a higher royalty or escrow for initial payments.

4. Exclusivity: measured, performance-based, reversible

Exclusivity is frequently requested but can cripple future income. Use these controls:

• Limit exclusivity by territory, channel, and time.
• Include performance milestones (e.g., distribution or revenue targets) that, if unmet, automatically step down to non-exclusive.
• Allow carve-outs for pre-existing licensed relationships and internal use.
• Define remedies if exclusivity is breached (termination rights, accelerated royalties).

5. Sublicensing, assignment and change-of-control

Clarify whether the agency can sublicense and what approval rights you retain:

• Require prior written approval for sublicenses to certain categories (e.g., interactive gaming, AI providers).
• In change-of-control events, include an option to terminate or re-negotiate (often called a “change-of-control break”).
• Protect moral rights and credit in any sublicense.

6. Deliverables, acceptance and quality standards

Set objective deliverables and acceptance tests to avoid disputes:

• File formats, resolution, and localization deliverables (e.g., subtitles, variants).
• Acceptance periods and remedy windows for defects.
• Escalation path and SLA for critical issues during launch windows.

7. Termination and reversion triggers

Don’t let your rights vanish when you need them most. Cover:

• Termination for convenience vs for cause — include cure periods for breach.
• Automatic reversion clauses on insolvency or prolonged inactivity.
• Clear post-termination exploitation rights for previously licensed content (run-off period).

8. Audit rights, reporting and escrow

Reliable revenue reporting is your lifeline. Require:

• Standardized report templates and frequency (monthly for sales, quarterly for reconciliations).
• Audit rights with a reasonable limit on cost-shifting and a 24-month lookback.
• Escrow arrangements for disputed or initial advance payments.

9. Indemnities, warranties, and insurance

Warranties should be finite and properly scoped. Key items:

• IP ownership and non-infringement warranty from the licensor/agency.
• Mutual indemnity: licensor indemnifies for third-party IP claims; licensee indemnifies for misuse.
• Cap on liability and carve-outs for willful misconduct or gross negligence.
• Minimum insurance requirements (E&O, cyber liability) for agencies handling PII or data processing.

10. Data, privacy and analytics (essential in 2026)

With cross-border privacy enforcement and analytics monetization, put data in the contract:

• Who owns user analytics and aggregated usage data.
• Limitations on PII use and transfer; specify applicable laws (GDPR, PDPA, etc.).
• Obligations for breach notification and remediation.

11. AI rights: an unavoidable 2026 check

Explicitly handle AI rights. Ask for:

• Clear permission (or prohibition) to use the licensed content for training models.
• Ownership or license to outputs generated by AI using licensed material.
• Attribution and moral rights rules for AI-generated derivatives.

Why now: Platforms and studios are expanding use of AI for localization, trailer generation, and concept art. Ambiguity here invites future disputes.

12. Exit mechanics & post-termination support

Practical exit terms save campaigns. Include:

• Transition assistance (30–90 days) with defined hourly caps or fixed fees.
• Data export and migration format requirements.
• Run-off rights for existing customers and a schedule for post-termination monetization.

Negotiation playbook — concrete levers and sample compromises

Use these negotiation levers depending on leverage and deal size.

When you have leverage (you’re the IP owner)

• Insist on non-exclusive first-term with performance-based exclusivity upgrades.
• Demand audit rights and gross revenue accounting.
• Reserve AI training rights unless you require payment for those uses.
• Include change-of-control break and automatic reversion if payments lapse.

When the agency has leverage (they bring distribution)

• Accept exclusivity if it’s geographically or channel-limited and linked to minimum distribution KPIs.
• Concede a modest advance but cap recoupment against specific revenue categories.
• Prioritize clarity on sublicensing and insist on approval for sensitive partners (e.g., AI providers, games studios).

Sample clause language (starter templates)

Below are short, practical snippet styles you can adapt with counsel.

Grant: Licensor grants to Licensee a non-exclusive, worldwide license to exploit the Work in the following media: linear TV, streaming, and digital downloads, for a term of five (5) years from the Effective Date. Use for AI model training is expressly excluded unless separately agreed in writing.

Audit: Licensee shall provide quarterly statements within 30 days of quarter-end. Licensor may audit Licensee’s books once per 12-month period, upon 30 days’ notice, at Licensor’s expense, except where material discrepancies (>3%) are discovered, in which case Licensee shall bear reasonable audit costs.

Reversion: Upon material breach not cured within 60 days, or upon Licensee’s insolvency, all rights granted hereunder shall automatically revert to Licensor and Licensee shall cease further exploitation within 30 days.

Due-diligence workflow and timeline (practical plan you can run)

Run this as a 4–6 week sprint for most deals; compress for small pilots.

1. Week 0: Kickoff — assemble team: legal (IP specialist), finance, operations, product lead.
2. Week 1: Document pull — request chain of title, contributor agreements, contracts with third parties.
3. Week 2: Financial vet — sample sales reports, historical royalties, outstanding encumbrances.
4. Week 3: Legal review — warranty scope, indemnities, exclusivity, AI rights.
5. Week 4: Negotiation round 1 — present term-sheet with redlines and performance metrics.
6. Week 5–6: Finalize contracts and set up reporting & escrow tooling; schedule transition plan.

Red flags & stop signs — when to pause negotiations

• No clear chain of title or refusal to provide contributor agreements.
• Refusal of any audit rights or opaque accounting practices.
• Vague grant language that includes “all media now known or unknown” without limits.
• Hidden sub-licenses for AI or data monetization without your consent.
• Uncapped liability with indemnities skewed entirely to you.

Real-world example: what to learn from recent agency-IP activity

In January 2026, agencies signed new transmedia IP studios that held graphic-novel franchises and broader derivative ambitions. Those deals highlighted two lessons:

• Agencies want wide derivative rights (games, film, merchandise). If you’re the IP owner, explicitly exclude categories you plan to exploit independently.
• Where agencies add global reach, require staged exclusivity tied to performance to avoid locking away valuable rights for low returns.

Apply those lessons: keep exclusivity narrow, and ensure revenue splits reflect the agency’s real value-add.

Stakeholders to include in your due-diligence

• Lead counsel with IP and licensing experience.
• Finance lead for modeling royalties and forecasting.
• Operations or product owner to assess deliverables and SLAs.
• Data/privacy specialist if personal data or analytics are involved.
• External adviser for AI and emerging-rights issues (2026-specialist).

Checklist you can copy into your deal file (compact, printable)

1. Ownership verified: __________ (Y/N) — docs attached: __________
2. Grant scope clear and limited: __________
3. AI training rights: __________ (Allowed/Prohibited/Separate agreement)
4. Royalty % / revenue split: __________ — reporting cadence: __________
5. Exclusivity limits & performance triggers: __________
6. Audit rights & escrow: __________
7. Termination & reversion clauses defined: __________
8. Indemnities and caps: __________
9. Data/privacy obligations: __________
10. Transition assistance and run-off: __________
11. Stakeholders included (names): __________
12. Next steps & deadlines: __________

Final practical takeaways

• Never allow ambiguity in the grant: If it isn’t written down, you don’t own it.
• Make exclusivity conditional: Tie it to measurable milestones and automatic step-downs.
• Protect analytics and AI rights: These are monetizable assets in 2026; treat them like revenue streams.
• Audit and escrow are non-negotiable: Reporting without verification is a risk you can’t accept.
• Plan the exit: Build migration support and reversion triggers before signing.

“A short-term concession on exclusivity today can cost you a decade of lost opportunities.” — Operational counsel advice adapted for organisers, 2026

Next steps — an action plan you can run this week

1. Download the printable checklist and fill in the compact deal file template.
2. Schedule a 60-minute legal triage with an IP-specialist counsel and share the term sheet.
3. Run a title search: request all contributor agreements and third-party licenses within 72 hours of signing LOI.
4. Insist on an AI clause: explicitly allow or deny training rights before any pilot releases.

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Get the organiser.info due-diligence bundle: a downloadable checklist, contract redline examples, and a 4-week timeline template you can use to run your next agency or licensing deal with confidence. Click to download, or book a consult with our licensing operations team and get a tailored term-sheet review within 48 hours.

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