WHAT IS A ROYALTY PAYMENT AND WHAT DOES IT REPRESENT?

[GailL1]

Just so everybody is clear - 

A royalty payment is a regular fee paid by a licensee to a licensor, in exchange for the use of the licensor's intellectual property. This happens when both parties enter into a licensing deal, which could be as part of a franchising arrangement or as a more standard intellectual property licensing agreement.

Business owners (for profit and non-profit) receive royalties for their intellectual property or real property assets.

A royalty payment is a payment made to an owner for the use of their intellectual property, creative works, or natural resources. The payment is made through a license or royalty agreement. 

In the case of AARP - AARP ®️ the letters put together as their logo is their registered trademark, and is their marketable intellectual property.

[CarolynBI]

Last I read they make about 1.2 Billion from that and only something like $230 (or maybe is was 180 - it doesn't matter which number) Million from memberships. As a result most of their income comes from the royalty agreements (they have one with more than UHC - for example Oak Street Health too). The royalties go into their for profit arm and supports a lot of their other programs like advocating in DC for things. 

Of course if we have UHC we are paying that royalty as part of our premiums (along with agent commissions of a number of hundreds of dollars per signup and renewal. If we sign up directly with UHC and not via an independent agent we pay the same amount. A captive agent (eg UHC employee) told me they get a bonus of $50 for each of us they sign up (on top of salary, benefits... independent agents only have commissions to support themselves). 

I do wonder though if AARP can be bought by royalties as around here Oak Street Health (it's in 23 states I think, with corporate in Chicago) is an unmitigated disaster. 

[CarolynBI]

The other thing that really disturbs me is that AARP is still accepting royalties from Oak Street Health (OSH) after it was recently (reported 10/24/24) that OSH had to pay $60 million for violating federal fraud laws. Despite the fact that AARP's for profit arm needs the money it seems to me they need to be looking into how to drop OSH and instead cut deals with more ethical companies. And again (what is on other threads) many people presume, wrongly, that AARP endorses the companies they get royalties from. This is certainly a cut and dry case that OSH isn't even remotely ethical nor has the best interests of the patients they see at heart.

https://www.whistleblowerllc.com/cvs-health-subsidiary-oak-street-health-pays-60-million-to-settle-a...fraud