Listerine antiseptic mouthwash could become someone’s cash cow… as a share of the famous brand’s global sales are up for grabs… but it’s going to take a huge investment.
Here’s the deal… Listerine has a longstanding agreement dating back to 1881 that essentially guarantees royalty payments to a select few on a monthly basis for as long as the mouthwash product is sold.
A gross sales royalty interest is sold through the Royalty exchange, with a list price of $2.1 million. So far, one bidder has offered $1 million.
The auction house says this royalty has paid $114,253 over the past year…and payments have averaged about the same amount, $114,715, over the past 3 years…meaning it would take about 18 years to recoup a $2.1 million investment. .
But unlike song royalties… where copyright lasts for the life of the last surviving author plus 70 years… Listerine royalties are paid monthly in perpetuity.
The unique agreement is entirely due to an agreement reached in 1881 between the inventor of Listerine mouthwash, Dr. J. J. Lawrenceand its first distributor.
The contract includes a royalty based on the number of ounces sold, which is paid to him and his “heirs, executors or assigns” as long as the product is sold… with the interest dividing among various entities over years, including heirs, universities, hospitals, pension funds and a few individuals.
United States sales royalties are paid monthly, based on the previous month’s sales, while an international sales discount is paid on a quarterly basis…and it’s all calculated from the gross sale of Listerine Antiseptic by Johnson & Johnson.