Exclusivity Clauses in Media Contracts 

1. Meaning of Exclusivity Clauses

An exclusivity clause in a media contract is a contractual provision under which one party agrees to provide specified services, content, performances, intellectual property, or commercial opportunities exclusively to the other party for a defined period, territory, platform, or purpose.

They are common in contracts involving:

actors and performers;

film directors and producers;

television presenters;

journalists and anchors;

musicians;

influencers and digital creators;

sports broadcasters;

production houses;

streaming platforms;

advertising agencies;

content creators;

photographers and videographers.

For example, a media company may agree with an actor:

“During the term of this agreement, the artist shall not provide acting services to any competing streaming platform without the producer's written consent.”

The legal question is whether such a restriction is valid and enforceable, particularly when it restricts the person's ability to work elsewhere.

2. Why Exclusivity Clauses Are Used

Media businesses often make substantial investments in a person's:

training;

branding;

promotion;

production;

marketing;

distribution;

audience development;

intellectual property;

confidential information.

The company therefore wants assurance that the contracted talent will not simultaneously work for a competitor.

An exclusivity clause can protect:

1. Investment

The producer or platform may invest significant amounts in developing a particular artist or content creator.

2. Confidentiality

The artist may receive confidential information concerning:

scripts;

upcoming projects;

budgets;

marketing strategies;

unreleased content.

3. Brand identity

A platform may want a particular performer to be associated exclusively with its brand.

4. Scheduling

Film and television production requires coordination of dates and availability.

5. Competitive advantage

A broadcaster may not want a presenter simultaneously appearing on a competing channel.

3. The Fundamental Indian Legal Issue — Section 27

The central statutory provision is Section 27 of the Indian Contract Act, 1872.

It provides, in substance, that:

Every agreement by which anyone is restrained from exercising a lawful profession, trade or business is void to that extent, subject to the statutory exception relating to sale of goodwill.

This makes Indian law significantly different from some jurisdictions where reasonable post-employment restraints may be enforceable.

Therefore, when evaluating an exclusivity clause, it is essential to distinguish:

During the contractual relationship

A restriction requiring a person to work exclusively for one media company may be more readily defensible.

After termination/expiry

A clause preventing the person from working for competitors after the contract ends faces a much stronger challenge under Section 27.

4. Exclusivity Is Not Automatically the Same as a Non-Compete

This distinction is extremely important.

Exclusivity clause

“During the contract, the artist will provide services exclusively to Producer A.”

Non-compete clause

“For two years after leaving Producer A, the artist will not work for any competing producer.”

The first regulates the contractual relationship itself.

The second restricts the person's ability to work after the contractual relationship has ended.

Indian courts have generally been much more cautious about post-contractual restraints because of Section 27.

5. Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co.

Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd., (1967) 2 SCR 378

This is one of the leading authorities on negative covenants during employment.

Facts

An employee had entered into an agreement containing restrictions preventing him from working for competitors during the contractual period.

The employee sought to avoid the restriction.

Supreme Court's approach

The Court distinguished between:

restrictions operating during the term of employment, and

restrictions operating after termination.

A negative covenant operating during the period of employment could, in appropriate circumstances, be enforceable.

Importance for media contracts

This case provides strong support for properly drafted in-term exclusivity clauses.

For example:

A television anchor agrees to present exclusively for Channel A for the duration of a two-year contract.

Such a provision is fundamentally different from:

After leaving Channel A, the anchor cannot work for any other channel for two years.

The first may be enforceable; the second faces serious Section 27 concerns.

6. Superintendence Company of India v. Krishan Murgai

Superintendence Company of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246

Facts

The employee was subject to a restrictive covenant preventing him from carrying on competing business after leaving employment.

Supreme Court's approach

The Court considered the distinction between restrictions during employment and post-employment restraints.

Principle

A restrictive covenant that operates after termination of employment is ordinarily subject to the strong prohibition contained in Section 27.

Relevance

A media company cannot simply assume that a clause stating:

“The artist shall not work for a competitor for 12 months after termination”

will be enforceable merely because the period is reasonable.

Under Indian law, the nature of the restraint matters more than simply its duration.

7. Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan

Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan, (2006) 4 SCC 227

This is particularly relevant to celebrity, talent and media contracts.

Facts

The dispute involved contractual restrictions concerning the professional activities of cricketer Zaheer Khan and the management/agency relationship.

The agreement contained restrictions concerning competing arrangements.

Supreme Court's principle

The Court emphasized the operation of Section 27 and the distinction between restrictions during the subsistence of a contract and restraints that continue after termination.

Importance for media/talent contracts

The case demonstrates that a talent-management agreement cannot be used to impose an impermissible post-contract restraint merely by characterizing it as an exclusivity provision.

It is particularly relevant to:

celebrity management agreements;

endorsement contracts;

talent representation;

sports-media agreements;

influencer contracts.

8. Gujarat Bottling Co. Ltd. v. Coca Cola Co.

Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545

Facts

The agreement between the parties contained a negative covenant restricting the bottler from dealing with competing products during the subsistence of the agreement.

Supreme Court's approach

The Court upheld the contractual restriction in the circumstances of the case.

Principle

A negative covenant operating during the subsistence of a commercial agreement may not necessarily violate Section 27 merely because it restricts dealing with competitors.

Media application

The principle can apply to commercial media arrangements.

For example:

A streaming platform contracts with a production company to produce a particular series exclusively for that platform during the contract.

A properly limited exclusivity arrangement may be commercially legitimate.

Important qualification

The clause must be examined in its contractual context.

An agreement that effectively prevents the other party from carrying on its profession or business after the contractual relationship ends is considerably more vulnerable.

9. Wipro Ltd. v. Beckman Coulter International S.A.

Wipro Ltd. v. Beckman Coulter International S.A., 2006 SCC OnLine Del 1062

Principle

The Delhi High Court considered the enforceability of restrictive covenants and distinguished between:

legitimate protection of contractual interests; and

restrictions that effectively operate as post-contractual restraints.

Relevance to media contracts

The case illustrates that courts examine the substance and practical effect of a contractual restriction rather than merely its label.

Thus, calling a clause:

“exclusivity”

does not automatically make it enforceable.

If its actual effect is to prevent the artist from earning a livelihood after termination, Section 27 concerns arise.

10. Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar

Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, 2009 SCC OnLine Del 1980

Principle

The Delhi High Court discussed restrictive covenants and the distinction between:

restraints during employment; and

post-employment restraints.

Relevance

The decision supports the general proposition that courts will closely examine whether a restriction genuinely protects a legitimate contractual interest or simply restrains future employment.

This is directly relevant when drafting exclusivity provisions for:

media executives;

producers;

content creators;

technical production personnel;

talent managers.

11. Vogueserv International Pvt. Ltd. v. S.C. Katoch

Vogueserv International Pvt. Ltd. v. S.C. Katoch, 1997 SCC OnLine Del 585

Principle

The decision illustrates judicial scrutiny of restrictive employment covenants and the importance of Section 27.

Relevance

An employer cannot use a contractual clause simply to prevent an employee from using the general skills and experience acquired during employment to obtain future employment.

This is especially important in media because professional skills are highly transferable.

An actor, editor, journalist, designer or producer generally cannot be prevented indefinitely from using their professional skills.

12. Media Contracts Require Special Care

Media contracts are different from ordinary employment contracts because the value of the relationship may be connected to:

personal identity;

publicity;

audience following;

intellectual property;

likeness;

voice;

reputation;

exclusivity;

sponsorship;

endorsements.

Consequently, exclusivity provisions can be drafted around specific legitimate interests without necessarily creating a broad prohibition on future employment.

13. Types of Media Exclusivity

A. Full Talent Exclusivity

The artist agrees not to work for any competitor during the contract.

Example:

An actor signs exclusively with a production house for three years.

B. Platform Exclusivity

The creator can work generally but cannot release similar content on competing platforms.

Example:

A creator produces a weekly original show exclusively for Platform A.

C. Character Exclusivity

The restriction concerns a particular character or franchise.

Example:

An actor agrees not to portray a competing version of the same fictional character during the franchise agreement.

D. Content Exclusivity

Only particular content is exclusive.

Example:

A documentary produced under the agreement is licensed exclusively to one streaming platform.

This is generally less problematic than prohibiting the creator from working elsewhere altogether.

E. Endorsement Exclusivity

A celebrity may agree not to endorse competing brands during a specified campaign period.

Example:

A celebrity endorsing Brand A agrees not to endorse a directly competing product category during the campaign.

This is a common commercial restriction and must be carefully drafted.

F. Geographic Exclusivity

The restriction may be limited to:

India;

a particular state;

a particular territory;

a particular market.

Geographic limitations can make the commercial purpose clearer, although reasonableness of geography alone does not cure a restraint prohibited by Section 27.

14. Duration of Exclusivity

A well-drafted clause should specify:

commencement date;

expiry date;

renewal mechanism;

termination consequences;

effect of breach.

Example

Instead of:

“Artist shall remain exclusive to Producer.”

Prefer:

“During the term of this Agreement, Artist shall provide the agreed acting services exclusively to Producer in relation to the specified series.”

The second clause is clearer because it defines:

who;

what service;

for whom;

during what period.

15. Post-Termination Exclusivity

This is the most legally sensitive area.

A clause stating:

“The artist cannot work for any competitor for three years after termination”

is vulnerable to challenge under Section 27.

The fact that the restriction protects the company's investment does not automatically make it enforceable.

Indian law generally places substantial weight on the individual's freedom to pursue a lawful profession.

16. Confidentiality Versus Exclusivity

This distinction is extremely useful.

Confidentiality

“The artist shall not disclose the producer's confidential scripts, budgets or unreleased content.”

This protects confidential information.

Exclusivity

“The artist shall not work for any other producer.”

This restricts professional activity.

A media company may therefore have a stronger legal basis for protecting:

trade secrets;

confidential scripts;

unreleased footage;

business plans;

customer data;

than for imposing a broad post-contract ban on employment.

17. Intellectual Property Versus Exclusivity

Another important distinction:

A production company may own or receive rights in a particular film or programme.

That does not necessarily mean the company owns the artist's future labour.

For example:

Producer owns the copyright in a completed film.

This is fundamentally different from:

Producer owns the actor's exclusive services for five years after the film ends.

The first concerns intellectual property.

The second concerns personal professional freedom.

Courts are therefore likely to examine the latter much more carefully.

18. Injunctions and Exclusivity Clauses

A party seeking enforcement may ask the court for an injunction preventing the artist from working for a competitor.

Courts exercise caution because an injunction enforcing personal-service restrictions can effectively force a person to remain tied to one employer.

The Specific Relief Act and principles concerning contracts involving personal services are therefore relevant.

Courts generally distinguish between:

Negative covenant

“Do not work for competitor X during the agreed contractual period.”

and

Positive personal service

“You must continue performing personally for us.”

The remedies and enforceability can differ substantially.

19. Personal Service Contracts

Media contracts frequently involve personal skill:

acting;

singing;

presenting;

directing;

writing;

performing.

Courts are traditionally reluctant to specifically enforce contracts requiring continuous personal service.

Why?

Because it is difficult for a court to supervise the quality of:

acting;

creative performance;

journalism;

presentation;

artistic expression.

Therefore, the company may seek damages or enforce a valid negative covenant rather than obtain an order forcing a person to perform artistic services.

20. Penalty for Breach of Exclusivity

Media contracts sometimes contain clauses such as:

“If the artist works for a competitor, the artist must pay ₹10 crore.”

Such a clause does not necessarily mean that ₹10 crore will automatically be awarded.

Section 74 of the Indian Contract Act concerns compensation for breach of contract where a sum is named or a penalty is stipulated.

The court examines the applicable principles concerning reasonable compensation.

Therefore, the contract should distinguish between:

genuine commercial loss;

reasonable compensation;

punitive financial penalties.

21. Liquidated Damages

A media contract can provide a predetermined amount payable upon breach.

For example:

“For unauthorized participation in a competing campaign during the exclusive campaign period, the artist shall be liable for agreed compensation.”

The enforceability depends upon the contractual circumstances and Section 74 principles.

A disproportionately high amount may be treated as a penalty rather than automatically recoverable.

22. Exclusivity and Employee Status

The legal analysis can differ depending upon whether the person is:

an employee;

an independent contractor;

an artist;

a freelancer;

a production company;

an agency;

a celebrity;

an influencer.

A clause in an employment agreement must be examined differently from an exclusivity clause in a commercial licensing agreement.

The court will look at the substance of the relationship and the actual contractual rights.

23. Exclusivity and Competition Law

In larger media markets, exclusivity may also raise competition-law concerns.

For example, a dominant streaming platform could potentially use contractual arrangements to exclude competing platforms from accessing essential talent or content.

Relevant questions can include:

Is the party dominant?

Does the agreement foreclose competitors?

Is the exclusivity commercially justified?

Is the duration excessive?

Does it substantially restrict competition?

Not every exclusive contract violates competition law.

But very broad exclusivity arrangements can attract scrutiny when combined with market power.

24. Drafting a Validity-Oriented Exclusivity Clause

A better media exclusivity clause should identify:

1. Subject matter

Exactly what is exclusive?

2. Duration

Exactly how long?

3. Territory

Where does exclusivity apply?

4. Competitor definition

What constitutes a competing business?

5. Exceptions

Can the artist undertake:

films;

television;

theatre;

endorsements;

personal projects;

social media work?

6. Consent mechanism

Can the employer give written permission?

7. Termination

What happens when the agreement ends?

8. Remedies

What happens in case of breach?

25. Example of a Narrower Clause

A clause could be structured around a specific project rather than attempting to prohibit all future employment:

“During the term of this Agreement, the Artist shall not provide substantially similar hosting services for a directly competing programme in the same market without the prior written consent of the Producer.”

This is significantly more precise than:

“The Artist shall not work for any other media company.”

The narrower formulation makes the commercial purpose and contractual scope clearer.

It still must be assessed against the actual facts and applicable law.

26. When Exclusivity Is More Likely to Be Enforceable

An exclusivity clause is generally in a stronger position where:

it operates during the contractual term;

it concerns a clearly defined service;

it protects a legitimate contractual interest;

the restriction is commercially connected to the agreement;

the scope is clearly defined;

it does not improperly extend beyond termination;

it does not conflict with mandatory law;

it does not impose an unlawful restraint on profession or trade.

27. When Exclusivity Is More Vulnerable

A clause is more vulnerable where it:

operates indefinitely;

continues for years after termination;

prohibits all work in the media industry;

applies to unrelated businesses;

prevents the person from earning a livelihood;

contains an excessively broad competitor definition;

attempts to restrict general professional skills;

conflicts with Section 27;

uses a penalty as a substitute for a valid restraint.

28. Case Law Summary

29. Overall Legal Test

When examining an exclusivity clause in a media contract, the following questions should be asked:

Question 1

What exactly is being restricted?

Employment, services, content, endorsement, IP or competition?

Question 2

When does the restriction operate?

During the contract or after termination?

Question 3

Is the restriction connected with the legitimate purpose of the agreement?

Question 4

Does it amount to a restraint on profession, trade or business under Section 27?

Question 5

Is the clause actually protecting confidential information or IP rather than improperly restricting employment?

Question 6

What is the duration and geographical scope?

Question 7

What happens upon termination?

Question 8

Is there a realistic and lawful remedy for breach?

Question 9

Does the clause attempt to force personal performance?

Question 10

Could the restriction raise competition-law concerns because of the contracting party's market position?

30. Conclusion

Exclusivity clauses are commercially important in media contracts but must be carefully distinguished from broad non-compete restrictions.

The central principle under Indian law is Section 27 of the Indian Contract Act, 1872. The Supreme Court's decisions demonstrate a significant distinction between:

A negative covenant operating during the contractual relationship

and

A restraint that continues after the relationship has ended.

Cases such as Niranjan Shankar Golikari, Gujarat Bottling, and Percept D'Mark show that appropriately structured restrictions during the subsistence of a contractual relationship can have enforceability. Conversely, Superintendence Company illustrates the serious difficulties associated with post-employment restraints.

Key takeaway

A media company can have a legitimate interest in obtaining exclusive services from an artist, presenter, creator or producer during the agreed contractual period. However, a clause that continues after termination and prevents the person from pursuing his or her profession is highly vulnerable under Section 27. The safest drafting approach is therefore to define exclusivity narrowly by service, project, competitor, territory and duration, while separately protecting confidential information, intellectual property and genuine commercial interests.