Payment Forms For Creatives In The Nigerianfilm Industry: Understanding The Concept of Residuals.

INTRODUCTION

When analyzed from a local and global perspective, the growth of the Nigerian entertainment industry is impossible to ignore. With a revenue generation capacity at around N7 billion naira, it stands out as one of the key contributors to Nigeria’s GDP with prospects for more. However, understanding intellectual property rights and the dynamics that surround its exploitation and payment forms appears to be an Achilles’ heel for the players within this industry. This article will attempt to demystify residuals as payment form in Nigerian film industry. 

There is a director 's chair in the middle of a dark room.

UNDERSTANDING RESIDUALS IN FILMS: 


The Nigerian film industry strongly anchors on protecting and exploiting Intellectual Property rights (IPRs). Beyond protection, a careful exploitation strategy concerning these rights ensures that creatives get the much-earned benefits (financial and otherwise) accrued to them for their contribution towards the creation of the work. Mainly, there are two major forms of payments associated with IPRs in the film industry to wit- Royalties (usually performance royalties for music used in films) and Residuals. While they appear similar, they are not the same. On the one hand, Royalties refer to payments made to IPR owners (typically copyrights in music and photographs or still graphics) for the use of their intellectual property while Residuals, are payments made to performers, writers, and other creatives for the reuse or re-broadcast of the work in which they have contributed to. Again, while Royalties will typically be paid regularly and based on the generated sales or revenue from the use of the intellectual property, residuals are paid on a one-time basis on each re-use or re-broadcast, and based on the percentage of the revenue generated by the reuse of the work. 


Understanding the concept and application of Residuals in the Nigerian film industry has become more critical with the introduction of global and regional streaming and distribution platforms. However, it is important to note that not all contributors to a film are entitled to or can lay claim to residuals. Generally, and except otherwise expressly waived, mainly principal performers are entitled to royalties, however, where a non-principal performer negotiates into its agreement the payment of residuals, such person will contractually be entitled to the said residuals. By principal performers, we mean the credited cast of a film usually, the lead actors, other actors with Principal speaking roles, Professional singers, Stunt performers or coordinators etc. The aforementioned notwithstanding, there are other persons who by their roles are usually entitled to pre-negotiated residuals in the film, they include directors, unit production managers, assistant directors (typically the first and second) and credited writers. Background actors or actors who show up in only one scene cannot claim residuals. 


In more established climes, there are formulas to calculate what is due to the creatives and a collection process. In Hollywood for example, the Screen Writers Guild (SWG) and the Screen Actors Guild (SAG) of America regulate the percentages due to creatives for their roles in movie production. It is unlike the royalties in Music where a percentage is agreed via a contract between the parties. There, the revenue obtained from the reruns and streams of a movie is calculated by the SWG and the SAG. The payment is usually in a percentage formula determined based on the gross revenue received by the unions (SWG and SAG). The union receives payment from the TV shows that rerun the production, then calculates what is due to the creatives. Note that creatives are not eligible for residuals on the initial release of the movie production, which traditionally would last for 90 days (3 months). After this period, the union starts receiving residuals which are payable within 30 days of the rerun, and in turn, remits the residuals to the creatives yearly. For example, in the popular TV show, Jumanji by Dwayne Johnson, produced in 2019, the revenue generated for that year was about $795,000,000 (seven hundred and ninety-five million dollars). However, in subsequent years the blockbuster movie made about $500,000,000 (five hundred million dollars) with the star actors receiving 2% of the gross revenue ($5,000,000). This is not the case in Nigeria as the above system is yet to be adopted or mirrored in Nollywood hence, creatives may have to continue to rely on their contractual negotiations to ascertain what becomes due at a subsequent use or re-broadcast. 


CONCLUSION


Overall, where works within this industry are made for an initial specific use, and subsequently remodelled or rebroadcasted in a different format, residuals become due to the relevant applicable contributors to the said work. Residuals remain one of the major incentives for creatives in the film industry.  And with the increment of a plethora of subsequent use of films in Nigeria particularly via streaming platforms, creatives must now more than ever, understand the dynamic of residuals if they are to fully maximize the exploitation of their IPRs which are anchored on their contribution(s) to the films in the Nigerian film industry. In all, seeking legal guidance with their contractual engagement will always be a good start. 


Written by:

Nosa John Graham Garrick (Managing Partner)

Eseosa G. Irabor (Associate)

Joyce Nneji (Associate) 




REFERENCES

  1. Deborah Dan-Awoh, Top Ten Fastest Growing Film Industries in the World (Nairametrics.com, August 2024) https://nairametrics.com/2024/08/14/top10-fastest-growing-film-industries-in-the-world/ 08/10/2024
  2. Duale, Ovia & Alex-Adedipe “Implementing Residuals in Nollywood” (doa-law.com, July 2023) https://www.doa-law.com/wp-content/uploads/2023/07/Implementing-Residulas-in-Nollywood.pdf 09/10/2024
  3. Brian Contreras, “What are residuals and how do they work? A Hollywood background strike, explained” (latimes.com, September 2023)  https://www.latimes.com/entertainment-arts/business/story/2023-09-20/actors-and-writers-are-striking-over-residuals-so-what-are-residuals-anyway#:~:text=Residuals%20are%20payments%20a%20writer,can%20also%20bring%20in%20residuals


May 30, 2025
1.0. INTRODUCTION Over the years, sports have evolved beyond the receptive games to be played for either leisure or regional competition to global commercial enterprises. With events such as the FIFA World Cup, the UEFA Champions League, and the Olympics, one could argue for the gradual globalisation of sports. However, a deeper review of this process reveals the step-by-step adoption on technology and media in the said globalisation; and this in turn opens a whole world of issues around intricate productions involving intellectual property, sponsorships, media rights, and extensive contractual framework. What appears onscreen on-demand, is underpinned by meticulously crafted legal and business arrangements that enable cross border entertainment, while also embracing innovation, and advancement of commercial value as well as the mechanism for its protection. This article will comment on lifecycle of sports media and branding rights, providing a legal and commercial roadmap for international stakeholders, with a core mention of Nigerian legal framework. 1.1. The Games Before The Game: Where Rights Begin A sporting event seen on screen represents a combination and intersection of rights, agreements, and negotiations established long before the game itself. Elements such as match footage, player imagery, and pitch-side ads are meticulously claimed, licensed, or sold by stakeholders ranging from governing bodies like FIFA and CAF to individual clubs and players. Governing bodies like Fédération Internationale de Football Association (FIFA) or Confederation of African Football (CAF) often control broadcasting rights and official branding; Clubs handle their trademarks and merchandising, while players, depending on the jurisdiction and their contracts, may retain significant control over image use. In Nigeria, these rights are governed primarily by the Copyright Act 2022, the Trademarks Act, and general contract law. Globally, the WIPO Draft Broadcasting Organizations Treaty seeks to provide unified protection against transnational piracy, though its implementation remains pending. While legislation is germane, the allocation of rights determines visibility, which in turn dictates commercial value. For example, a sponsor may invest significant resources for their brand to appear prominently on a player’s jersey; if the broadcaster’s camera angles fail to display this placement effectively, disputes may arise over liability, highlighting the complexity of coordinating rights and visibility. 1.2. Broadcasting: The Soul of Sports Economics Broadcasting rights, legal licenses, which grant entities the authority to record, transmit, and distribute sporting events across television, radio, and digital plat- forms, form the backbone of the sports economy. These rights influence how and where sports are consumed, and more importantly, who profits from them. Broadcasting deals often determine the visibility of a sport or league. A single contract can propel a domestic competition to international fame or render it virtually invisible. Broadcasting contracts typically divide rights by territory, impose exclusivity, and adhere to strict timeline. SuperSport’s exclusive broadcasting rights for the English Premier League in Nigeria exemplify how market power and legal exclusivity intersect and give an indication of the high stakes involved. The high stakes of these deals invite fierce legal battles. Unauthorised broadcasting — even a short clip aired by a local station — can trigger swift legal action: injunctions, takedown notices, and litigation under intellectual property and broadcasting regulations. Nigerian courts are increasingly proactive in addressing violations, issuing in- junctions and damages to safeguard broadcasting rights. This was clear in the cases of Nigerian Copyright Commission v. Joseph Daomi (1) and Nigerian Copyright Commission v. Stanley Nwankwo (2) where the accused were both convict- ed for the illegal distribution of a broadcast signal. Notwithstanding these strides, the digital age has further complicated enforcement. Pirated content spreads rapidly through social media and messaging apps, outpacing legal remedies. Even the most robust broadcasting contracts may falter when faced with jurisdictional challenges or technological barriers. 1.3. The Screen as a Billboard-Sponsorship Rights and Deals Sponsorships are where legal rights and commercial branding meet. Imagine a football match with no logos, branded kits, or digital billboards — it would look almost unfamiliar. Sponsorships transform the broadcast screen into prime advertising opportunities. Sponsors don’t pay to support the game per se; they pay for visibility — to have their brand appear on screen, in post-match highlights, and across social media. Consequently, sponsorship contracts are heavily negotiated, and often include exclusivity clauses- preventing rival brands from sharing screen space-, morality clauses- allowing termination if an athlete damages the brand’s reputation- and 0n-screen guarantee clauses- ensuring brand visibility during key moments. Legal disputes may arise when a player’s personal sponsorship conflicts with the team or league’s official sponsors. These cases often require arbitration or court intervention to interpret competing contractual obligations. 1.4. Protection and exploitation of Image Rights: An Athlete’s Brand As athletes gain popularity, their image rights become valuable assets, especially when it comes to sports broadcasting and sponsorship deals. Athletes are no longer just competitors; they are influencer, brands, and public figures. Image rights — the legal right to control the commercial use of one’s identity — encompass name, likeness, signature, voice, and other personal at- tributes. 1. Trademark Registration Athletes can register their name, logo, or signature as trademarks under the Nigerian Trademarks Act.(3) This grants them exclusive commercial rights and legal recourse against unauthorised use. 2. Passing Off Under Nigerian common law, an athlete can sue for “passing off” where their image is used without consent in a way that causes reputational or financial harm. However, for such claim to succeed, they must show goodwill, misrepresentation, and damage (see NOKIA Corp v. Intercellular Nigeria Ltd ).(4) 3. Contractual Protections Image rights agreements which are sophisticated in nature often accompany endorsement and sponsorship deals, setting out the way and manner in which an athlete’s likeness can be used, as well as the duration. 2.0 Challenges and Emerging Legal Questions As the sports industry evolves, so do legal challenges. Key recurring questions include: Who owns broadcast footage — the league, broadcaster, or athlete? And to what extent does this ownership lie? How should courts resolve conflicts between personal image rights and league broadcasting rules? What remedies exist for athletes whose images are exploited online with- out consent? A limitation to image rights still lingers, while copyright under the Copyright Act 2022 protects original works like photographs and videos, it does not ex- tend to personal identity. For example, a photo of an athlete is owned by the photographer, not the athlete — unless transferred. 3.0 Conclusion In Nigeria and beyond, sports are no longer just about goals and glory, it has mutated into a high-stakes legal arena involving complex rights, cross-border contracts, and millions in sponsorship and broadcasting revenue. Whether it’s a shaky Facebook Live stream, a branded jersey, or a player’s endorsement deal, every piece of the game is backed by a legal contract. For stakeholders — athletes, sponsors, broadcasters, and regulators — under- standing and enforcing these rights is critical. While Nigeria’s legal framework is still evolving, robust use of intellectual property law, contract law, and com- mon law principles can offer meaningful protection. 55 NIPJD [FHC, 2012] MKD/CR/38 55 NIPJD [FHC, 2012] ABJ/CR/14/2011 Cap T13, Laws of the Federation of Nigeria 2004 (2003) 12 v Pt 836, 22