Deal Room

A live commercial model of the proposed joint digital execution arm — anchor client: Smollan's Unilever India JV. Adjust service-line volumes, cost structure and split terms on the left; all three deal structures recompute simultaneously.

Service lines

₹ L / month

Influencer campaigns

BillingLPass-through%Op cost (% of net)%

Split basis

Pass-through = influencer payoutsnet ₹21.0 L

Performance media

BillingLPass-through%Op cost (% of net)%

Split basis

Pass-through = ad spend remitted to platformsnet ₹7.5 L

Social & content retainers

BillingLPass-through%Op cost (% of net)%

Split basis

No pass-throughnet ₹20.0 L

Creative & production

BillingLPass-through%Op cost (% of net)%

Split basis

Pass-through = outsourced productionnet ₹12.0 L

Operating costs

Team salariesLTools & techLOverheadsL

Fixed costs₹24.0 L

Service-level costs (auto)(Σ line net × op cost %)₹21.3 L

Total operating costs₹45.3 L

Influencer campaigns₹5.3 L

Performance media₹2.3 L

Social & content retainers₹9.0 L

Creative & production₹4.8 L

Total billings

₹2.45 Cr

Invoiced to client

Pass-through

₹1.84 Cr

Remitted onward

Gross revenue

₹60.5 L

Agency revenue

Operating costs

₹45.3 L

Fixed + service-level

Net profit

₹15.2 L

25.1% margin on gross revenue

Monthly figures. Gross revenue = billings − pass-through. Pass-through is never counted as agency revenue.

Structures

Three ways to share the same P&L

Model A

5/20 of GR

Revenue split

RCL 80% / Smollan 20% of split base

RCL share of split base

80%

50%95%

Split base ₹60.5 L / month

RCL take

₹3.1 L

Smollan take

₹12.1 L

Ledger — money flow

Client billings collected by RCL₹2.45 Cr

Pass-through remitted onward−₹1.84 Cr

Gross revenue₹60.5 L

Smollan share (20% × split base)−₹12.1 L

Operating costs (borne entirely by RCL)−₹45.3 L

RCL take₹3.1 L

Where each ₹100 of client billing goes

Pass-through ₹75.3Operating costs ₹18.5Smollan ₹4.9RCL ₹1.3

Smollan gets certainty with zero cost risk — a fixed share of the split base off the top. RCL collects all billings, funds every cost, keeps execution autonomy and all operating upside.

Model B

13/13 of GR

Profit split

RCL 50% / Smollan 50% of net profit

RCL share of net profit

50%

30%70%

Net profit ₹15.2 L / month · losses shared at the same ratio

RCL take

₹7.6 L

Smollan take

₹7.6 L

Ledger — money flow

Gross revenue₹60.5 L

Operating costs (joint P&L)−₹45.3 L

Department net profit₹15.2 L

RCL 50%₹7.6 L

Smollan 50%₹7.6 L

Where each ₹100 of client billing goes

Pass-through ₹75.3Operating costs ₹18.5Smollan ₹3.1RCL ₹3.1

One joint P&L and joint governance — senior hires and investment decided together. Upside and downside are shared at the same ratio, so cost discipline is a mutual interest.

Model C1

5/20 of GR

Revenue split + minimum guarantee

Smollan receives the greater of 20% of split base or ₹12.0 L/mo

Hybrid structure

Monthly minimum guarantee to SmollanLUses Model A share (80% RCL) as the underlying split.

RCL take

₹3.1 L

Smollan take

₹12.1 L

Ledger — money flow

Gross revenue₹60.5 L

Revenue-split entitlementbefore guarantee₹12.1 L

Minimum guarantee₹12.0 L

Smollan take (split binds)−₹12.1 L

Operating costs (borne by RCL)−₹45.3 L

RCL take₹3.1 L

Where each ₹100 of client billing goes

Pass-through ₹75.3Operating costs ₹18.5Smollan ₹4.9RCL ₹1.3

Model A with a floor. Smollan is protected in ramp-up months when volumes are thin; RCL absorbs the gap and buys goodwill cheaply once billings scale past the guarantee.

The crossover — A vs B is a single, exact threshold

At today's operating costs of ₹45.3 L, the Profit split (B) pays RCL more and the Revenue split (A) pays Smollan more.

Both parties flip simultaneously at the crossover cost C* = ₹36.3 L — currently ₹9.0 L below actual costs (15% of gross revenue of headroom). Formula: C* = GR − (1−s)·SB / (1−p), with s = 80% and p = 50%.

RCL: A minus B

−₹4.5 L

favours Model B

Smollan: A minus B

+₹4.5 L

favours Model A

Positive means the revenue split (Model A) pays that party more than the profit split (Model B) at current costs. The two gaps are always opposite in sign.

Sensitivity

Each party's take as operating costs move

Model A · Revenue split

take vs operating costs

RCL Smollan

Model B · Profit split

take vs operating costs

RCL Smollan

Model C1 · Revenue split + minimum guarantee

take vs operating costs

RCL Smollan

Definitions & methodology

Billings: Everything invoiced to the client. Includes money that is only passing through us — it is a volume metric, never a revenue metric.
Pass-through: Money remitted onward to third parties: influencer payouts, ad spend to platforms, outsourced production. Never counted as agency revenue and never shared.
Gross revenue (GR): Billings − pass-through. The department's true top line and the basis for the margin figure.
Split base (SB): The amount the revenue split is applied to, set per service line: 'Net' = billing − pass-through, or 'Billing' = the full invoiced amount.
Operating costs (C): Fixed costs (team salaries, tools & tech, overheads) plus service-level costs, computed as a % of each line's net revenue.
Net profit (NP): Gross revenue − operating costs. Negative values are losses and are shared per each structure's rules.

Who bears the cost under each structure

Model A — RCL bears 100% of operating costs.

Smollan's share is riskless: (1 − s) × split base, paid before costs.

Model B — Costs sit in one joint P&L.

Both parties bear costs in their profit-share ratio; losses shared identically.

Model C1 / C2 — RCL bears 100% of operating costs.

C1 adds a floor under Smollan's take; C2 varies RCL's share by scale slab.

Model C3 — RCL is paid a fee first; residual costs shared.

Management fee off gross revenue to RCL, then residual profit split at the Model B ratio.

Display convention: values under ₹100 L show in lakhs (₹62.5 L); ₹100 L and above show in crores (₹2.45 Cr). Annual figures are monthly × 12.