This document serves as a high-level, non-binding overview of the proposed business terms for licensing and implementing the Power Ball Inning. It is intended to provide MLB with a clear understanding of the structure, rights, and financial framework associated with the innovation prior to drafting formal legal agreements. The goal of this term sheet is to align both parties on the core commercial principles—such as exclusivity, royalty structure, and implementation approach—so that further negotiation and contract development can proceed efficiently and transparently.

1 Grant of Rights

The Licensor agrees to grant Major League Baseball (MLB) the right to test, use, implement, and commercialize the Power Ball Inning (PBI) subject to the terms set forth herein.

2 Minor League Pilot Program

MLB may, at its discretion, conduct a pilot program within any designated Minor League Baseball classifications for the purpose of evaluating competitive, operational, and commercial performance of the Power Ball Inning.

  • If MLB elects to conduct a pilot:

    • MLB will hold exclusive rights to test and use the Power Ball Inning within all participating Minor League classifications.

    • The Licensor will not authorize any other professional baseball league to test, implement, or commercialize the Power Ball Inning during the pilot period.

    • Royalty obligations will apply during the pilot at the same 5% rate used for Major League implementation.

    • All pilot-phase royalties will be credited toward MLB’s total financial obligation (“Royalty Cap”) under this agreement.

This pilot structure preserves MLB’s optionality while ensuring exclusivity and contributing toward eventual ownership.

3 Compensation Structure

The license will include no upfront fee.
Compensation will be delivered exclusively through a 5% royalty applied to all Power Ball Inning–specific advertising revenue, as defined below.

Royalty obligations begin upon:

  • MLB’s first Minor League pilot activation, or

  • MLB’s first Major League implementation,
    whichever occurs first.

3.1 Royalty Base (PBI-Specific Revenue Only)

Royalties apply solely to gross advertising revenue generated exclusively during Power Ball Inning activations, including but not limited to:

  • Broadcast and streaming advertising inventory

  • Digital overlays and inning-specific on-screen graphics

  • Scoreboard and stadium signage activated only during the Power Ball Inning

  • Sponsorships or presenting rights directly associated with the Power Ball Inning

No additional MLB revenue categories are included in the royalty calculation.

3.2 Payment Terms

Royalties will be calculated and remitted quarterly, accompanied by statements detailing all revenue included in the royalty calculation.

3.3 6 Royalty Duration & Completion Requirement

Royalty Duration & Completion Requirement

Royalty Application & Credit

  • All royalty payments—including those generated during any Minor League pilot—will be credited toward MLB’s total financial obligation (“Royalty Cap”) required for permanent acquisition of the Power Ball Inning intellectual property.

Royalty Continuation Until Cap Reached

  • Royalty obligations will continue until cumulative royalty payments reach the Royalty Cap. Upon reaching the Royalty Cap, all royalty obligations will cease automatically. At that point, MLB will be deemed to have satisfied its full financial obligation.

Maximum Duration

  • MLB will have a period of ten (10) years from initial Major League implementation to satisfy the Royalty Cap. This ten-year period serves as the valuation horizon and does not represent a required payout timeline; MLB controls the rate at which the cap is reached through actual Power Ball Inning–specific revenue generation.

Purpose of the Royalty Cap

  • The royalty cap is intentionally designed to provide MLB with a clean, finite, and predictable ownership pathway. The Licensor’s intent is not to establish a perpetual royalty structure, but rather to deliver a valuable innovation, transfer it fully, and step aside so MLB may operate, enhance, and integrate the Power Ball Inning without ongoing obligations.

A capped royalty ensures:

  • Permanent ownership upon reaching the cap.

  • No perpetual liabilities or trailing royalties.

  • Clear maximum financial exposure for MLB to support internal budgeting and approval.

  • Full long-term operational control, with freedom to evolve the rule as needed.

(The specific Royalty Cap amount will be communicated separately by the Licensor.)

4 Optional Buyout Clause

Optional Post- Minor League Pilot Buyout & Royalty Credit

Optional Full Buyout:

  • Following successful completion of the Minor League pilot program, MLB may elect, at its sole discretion, to acquire full, permanent, and exclusive ownership of the Power Ball Inning intellectual property through a one-time buyout payment. The Buyout Amount reflects an incentivized early-acquisition rate available only after successful Minor League validation.

Credit for Prior Royalty Payments

  • Any royalty payments made by MLB during the Minor League pilot or prior to exercising the Buyout Option will be fully credited toward the Buyout Amount.

Effect of Buyout

  • Upon MLB’s payment of the remaining Buyout Amount (after royalty credits), all royalty obligations will immediately terminate, and MLB will receive full and perpetual ownership of the Power Ball Inning intellectual property with no further payments due to the Licensor.

No Obligation to Elect Buyout

  • MLB is under no obligation to exercise the Buyout Option. If the Buyout Option is not exercised, the royalty structure outlined in previous sections will continue until the Royalty Cap within the ten-year duration is reached.

5 Exclusivity

Exclusivity begins upon the earlier of:

  • MLB’s first Minor League pilot activation, or

  • MLB’s first Major League implementation.

From that date forward, MLB will hold exclusive rights to use, implement, broadcast, commercialize, and integrate the Power Ball Inning across all Minor League and Major League Baseball properties.

Exclusivity remains in effect until MLB fully satisfies its total financial obligation. Upon completion, MLB will receive perpetual exclusive ownership of the Power Ball Inning intellectual property.

6 Ownership Transfer

Ownership of all Power Ball Inning intellectual property will transfer to MLB only upon full satisfaction of MLB’s total financial obligation.

Until completion, all rights remain licensed, non-transferable, and retained by the Licensor.

7 Reporting & Audit Rights

MLB will provide quarterly revenue statements detailing all Power Ball Inning–specific revenue.
The Licensor may conduct one independent audit per calendar year.
Any royalty underpayment exceeding ten percent (10%) will require MLB to remit the corrected amount plus reasonable audit costs.

8 Implementation Timing

MLB and the Licensor will mutually determine timelines for Minor League pilot execution (if elected) and Major League implementation.

9 Non-Binding Status

This Term Sheet is non-binding and intended solely to outline principal business terms for negotiation of a definitive agreement.