Question on Royalty Pools after Recoupment

This goes out to the handful of budgetary nerds around here.

Can you help me fully understand the royalty pool?

I know that it helps the investors to recoup faster. Instead of simply giving the creatives a fixed percentage of the Gross Weekly Box Office Receipts (which can in the worst case lead to the investors losing money while the creatives make lots of it - even though the show returns a small profit) the pool (i.e. most of the creatives, underlying rights owner, producer) gets a percentage (35 -40 %) of the net weekly operating profits, leaving the investors a guaranteed 60 - 65 % in order to reach recoupment.

Understood.

But what happens after recoupment? Has the royalty pool served ist purpose and reverts to % GWBOR for the creatives on the one hand and investors and producers sharing the net profits 50/50 on the other? Typically a show that has recouped will earn enough not to lose money with this calculation.

Or does the pool stay in place? If yes, is it adjusted? And what happens to the producer? Does he/she participate twice? Once through the pool and once through their 50 % share of the investors share of net operating profits? Or does he/she switch sides from the pool to the investors?

Or does that simply differ from show to show?

Thanks for your answers!

From the agreements that I have seen, the pool pre-recoupment is anywhere from 70-30 to 60-40 (with the investors getting the larger amount), but post-recoupment it almost always reverts to a 50-50 split.

There could be exceptions, of course, but this is just what I have seen happen.

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