Film Residuals: “Star Trek” & More

This is a rare royalty stream that earns from a long-running popular sci-fi franchise — Star Trek. 

As the winning bidder, you will collect film residuals (film/TV royalties) generated by a collection of 21 feature films dating from 1976 to 2002. These royalties are led by four of the Star Trek films and also include Beverly Hills Cop III, Along Came a Spider, Crow 2: City of Angels, and many more. 

Star Trek is one of the highest-grossing media franchises of all time, sci-fi or otherwise. With a massive following of both mainstream fans and cult devotees (called Trekkies), Star Trek is a cultural phenomenon that spans decades. The franchise began in the 1960s with science fiction TV series Star Trek, created by Gene Roddenberry. Since then, the brand includes the original series, the 90s-era Next Generation and eight other spin-off TV series, 12 feature films, games, figurines, novels, toys, conventions, comics, and much more.

This asset earns from four Star Trek films dating back to 1991 — Star Trek VI: The Undiscovered Country with the original cast, and three from the Next Generation cast: Star Trek: First Contact, Star Trek: Insurrection, and Star Trek: Nemesis. Combined, they account for 61% of the residuals collected in the last year. 

Other top-earning films in this collection include: 

• The Eddie Murphy comedy Beverly Hills Cop III (1994)
• 2001’s physiological thriller Along Came a Spider starring Morgan Freeman
• The 1976 sci-fi thriller Futureworld
• Crow 2: City of Angels (1994) 

Film Residuals. Royalties, in film and TV are referred to as “residuals” and are paid when a film or program is rebroadcast or distributed. Creatives are typically paid a large upfront fee for a film's theatrical release or a television show's first airing and are then paid residuals for any subsequent airing, including DVD release, broadcast TV syndication, and new media use such as Netflix streaming. The residuals included in this auction are collected and distributed by the Director’s Guild of America. The Guild, a collective bargaining organization, negotiates the residual rates with the various motion picture studios, who are required to account to the Guild’s members accordingly.

Like music royalties, film residuals negotiated by the Guild do not depend on the profitability of the film. They are triggered by the subsequent rebroadcasts and uses. Different formulas apply depending on the nature of the film and where it is used.  Residuals can be based on gross receipts, telecasts, or the period of time a film is exhibited.

Investment Term. DGA residuals are not tied to the copyright in a film. They're negotiated by the Guild for their members and continue in perpetuity, passing to each member's successors and assigns.

Payment Schedule. Royalties for this asset are paid when the studios issue residuals to the Director’s Guild. This means they are not issued on a regular set schedule, but rather on an as-it-happens basis, which creates an irregular distribution schedule and fluctuations.