Mexico’s media and entertainment sector has seen remarkable growth over the past year, fuelled by streaming expansion and a digitally engaged population of over 110 million internet users. The digital video content market reached USD3.2 billion in 2024 and is projected to more than double by 2033, growing at over 10% annually. With the FIFA World Cup 2026, this momentum is expected to accelerate, further cementing the country’s position as a leading hub for digital innovation and media consumption.

Some of the key trends and developments can be found below.

Increased Investment in Local Content

Platforms are heavily interested in investing in original Mexican productions (eg, Netflix’s USD1 billion commitment from 2025–2028).

Transforming the Industry With AI

Media and entertainment companies are implementing AI across the entire value chain, from content creation, production and editing, to distribution and personalised marketing, in addition to traditional AI uses like automation. As discussed in further detail below, recent amendments to the Federal Copyright Law (LFDA) introduced a new framework regulating the use of AI in connection with the voice, image, and performances of artists.

New Era of Sports Entertainment

With over 80% of the population watching sports, Mexico is shifting from traditional cable to streaming and Over-The-Top (OTT) platforms, driven by on-demand viewing preferences. This transition is unlocking new revenue streams through subscriptions, targeted ads, and the growing integration of live sports betting, especially during the FIFA World Cup 2026. As a co-host nation, Mexico is experiencing a surge in content licensing, sponsorship deals, and platform investment linked to the tournament, reinforcing the country’s position as a strategic market for sports-related media and entertainment.

Social Media as Distribution Platforms

From content creation to influencer marketing and live streaming, social media has become a crucial distribution channel for entertainment in Mexico, surpassing traditional media outlets.

Ongoing M&A and Strategic Consolidation

Companies are acquiring local content libraries, Advertising Video on Demand (AVOD) players, and production infrastructure, and due diligence focuses on IP rights, licences, labour agreements, and regulatory exposure.

Business volume in Mexico’s media and entertainment sector is expanding rapidly across several platforms and formats.

Streaming Platforms

The video and live streaming platforms are expected to grow at a compound annual growth rate (CAGR) of 3.6% from 2026 to 2032 in Mexico, primarily due to increased internet penetration, a shift in consumer behaviour (partly influenced by the pandemic), and rising smartphone usage.

There is a strong and growing demand for localised and original content that resonates with Mexican audiences, and streaming platforms (such as Netflix and Prime) have been investing significantly in high quality, Mexican-produced content which has proved to be a success with TV shows such as Luis Miguel La Serie, Nadie Nos Va a Extrañar, and others. Notably, the new Federal Law on Cinema and Audiovisual, published on 22 May 2026, has introduced regulatory obligations for VOD platforms, as discussed in further detail below.

Short-Form Video and Social Media

Platforms such as TikTok, YouTube Shorts, and Instagram Reels are increasingly popular, especially among younger audiences, driving high engagement and influencer-driven content.

Additionally, video advertising spending is growing rapidly and is projected to surpass traditional TV ad spending in Mexico in 2026, signalling a shift towards digital as the dominant channel for most brands.

Videogaming and Interactive Media

Mexico is a major gaming market in Latin America, with growth in mobile, console, and PC gaming, as well as e-sports and live game streaming.

The Mexican video games market size reached USD1.8 billion in 2024 and is currently projected to grow at a 10.20% compound annual growth rate between 2026 and 2034. This growth is attributed to the increased use of smartphones, rising internet accessibility, the growing popularity of e-sports, and investments from international gaming companies.

Reality TV, Telenovellas and Long-Form Series

Local telenovellas and reality shows (now shifting into the streaming environment) remain highly popular, and there is strong demand for both international and locally produced long-form series. Vix (TelevisaUnivision), which holds exclusive FIFA World Cup 2026 streaming rights in Mexico, has become a key player, heavily investing in original productions for both traditional TV and streaming.

Mobile Video and Live Streaming

Mobile video consumption is surging due to high smartphone and internet penetration, and Mexico is a significant player in the global live streaming market. It is projected to have a Compound Annual Growth Rate (CAGR) of 15.6% (from 2024 to 2030), mainly driven by the combination of cloud-based solutions and 5G connectivity, which improves accessibility and social media integrations.

In the last 12 months, deal-making in Mexico’s media and entertainment sector has been shaped by five key trends.

Tailored Revenue-Sharing and Back-End Structures

With no standardised framework for streaming profit-sharing, parties are negotiating clauses, especially regarding monetisation models. Audit rights, revenue definitions, and data access are becoming focal points in negotiations.

Flexible Rights and Windowing Models

Contracts are now more frequently structured to allow in-season stacking, multiple exploitation windows (for example, traditional TV and streaming, as well as distribution in theatres for films), and geographic-specific licensing. Side letters and interim agreements are also being used to address evolving platform needs without disrupting content availability.

Advertising and Data Monetisation Deals

As AVOD gains traction, deal terms increasingly cover advertising revenue splits, user data usage rights, and compliance with Mexico’s data protection laws. This includes tighter language on consent, reporting, and liability.

Increased Due Diligence in M&A

Companies expanding their content or tech capabilities are engaging in strategic acquisitions. M&A deals now involve more comprehensive IP audits, filings with antitrust authorities, and risk assessments in light of Mexico’s ongoing regulatory transition in the telecom and broadcasting sectors.

In the past year, back-end participation in film and television has continued to evolve in response to the growing influence of streaming platforms. Traditionally, back-end participation involved talent receiving a share of profits from various exploitation windows. However, the rise of streaming-VOD (SVOD) platforms (eg, Netflix, Amazon and Disney+) has prompted a significant shift toward more predictable, upfront compensation structures, including fixed payments or “buyouts” in lieu of traditional back-end points.

Some innovations include performance-based bonuses tied to clear metrics (such as viewership, awards, or the number of seasons produced), and “per-point” models assigning a fixed value to each participation point, often with escalators for longevity and performance. These models foster greater transparency and allow studios to efficiently exploit content across their own distribution channels without complex, project-specific profit allocations.

Furthermore, some studios have introduced “per-point” models, assigning a fixed value to each participation point, often with escalators for longevity and performance. This fosters greater transparency and aims to reduce potential disagreements over profit definitions. This forward-thinking approach also allows studios to efficiently exploit content across their own distribution channels, optimising content reach without the need for complex, project-specific profit allocations or additional negotiations with profit participants.

Despite these significant advancements in compensation models, complexities can still arise, particularly within legacy deals or where newer models require further clarification for all parties. Common areas that can lead to discussions or disagreements have been outlined below. Additionally, the recent LFDA amendments now require that compensation agreements include separate compensation for AI-related uses of performers’ voice and image, adding a new layer to deal structuring.

Finally, amendments to the Federal Consumer Protection Law (LFPC), published in December 2025, introduced new obligations for providers of subscription and membership services. Providers must clearly disclose whether a service involves automatic recurring charges, including their frequency, amount, and billing date, and must obtain express consumer consent. For automatic renewals, consumers must be notified at least five calendar days in advance, with the right to cancel without penalty. These provisions are particularly relevant for streaming and digital entertainment platforms operating subscription-based models in Mexico.

Clarity in Profit Definitions

In older agreements, discussions may arise concerning the calculation of “net profits”, as studios often apply deductions (eg, distribution fees, overheads and interest) that can influence the pool available for participants. The absence of industry-wide standardisation in some of these older definitions can sometimes lead to varying interpretations.

Transparency and Access to Information

Talent and their representatives occasionally seek to review studio records. While studios generally aim for transparency, the sheer volume and complexity of financial data can sometimes lead to requests for further clarification or detailed breakdowns.

Meanwhile, Mexico’s LFDA increasingly governs AI-generated content, requiring studios to ensure transparency and consent when using talent likenesses, raising new compliance challenges across the industry.

Vertical Integration and Internal Transactions

As studios increasingly integrate production and distribution, conversations can sometimes focus on ensuring that internal transactions (such as licensing content to affiliated networks or platforms) are conducted at rates that are perceived as fair market value by all stakeholders.

Evolving Revenue Streams From Streaming and Digital

The rapid growth of streaming has introduced new considerations regarding which revenues are subject to back-end participation. Discussions may arise over how streaming revenues are best accounted for within the profit pool, especially when content is distributed across multiple platforms within the same corporate group.

Interpreting Contractual Terms

Many older contracts may not explicitly address newer forms of distribution or revenue streams, which can lead to differing interpretations regarding what is included in the back-end calculation under evolving market conditions.

In recent years, the evolution of audience habits, particularly the dominance of streaming platforms and the stagnation of box office performance, has led to the emergence of new financing.

The entertainment industry is continually adapting its financial structures. Traditionally, compensation often involved theatrical pre-sales and back-end participation. However, with the rise of digital platforms, these are increasingly complemented by flat-fee buyouts, minimum guarantees, and hybrid models. These newer approaches are particularly common in streaming-first productions. Studios and platforms are opting for these defined financial agreements to provide greater clarity and predictability for all parties. Rather than open-ended profit-sharing, talent now frequently receives performance bonuses tied to specific metrics, such as renewal thresholds, awards, or content visibility across digital platforms. This aligns incentives directly with content success and broad audience reach.

In Mexico, non-traditional financing has also taken the form of:

• co-production schemes backed by public incentives (eg, EFICINE, FOPROCINE, or the 2026 Presidential Decree granting a 30% tax credit for cinematographic and audiovisual production in Mexico), allowing talent to access state support without relying on downstream revenues;
• equity investment from private funds or brand sponsors, especially in independent cinema and docuseries; and
• licensing pre-sales to international buyers, which are structured as lump-sum, territory-specific fees rather than contingent back-end shares.

These financing strategies offer greater predictability but reduce long-term upside for talent. As back-end models become less viable, creators are increasingly negotiating higher upfront compensation and retaining ancillary rights, such as soundtrack or character exploitation, to preserve future revenue opportunities.

This shift reflects a global trend toward riskier content investment and a recognition that transparent, enforceable back-end models have become increasingly difficult to sustain in vertically integrated, data-driven markets.

International co-productions often involve navigating divergent legal frameworks, regulatory requirements, and cultural business expectations. Mexico is considered a hub for international co-productions due to its sophisticated and savvy talent, as well as its available resources, further reinforced by the 2026 Presidential Decree granting a 30% tax credit for cinematographic and audiovisual production, which is also available to foreign producers operating through a Mexican resident entity. In Mexico, such deals typically require careful alignment of contractual standards with both local and foreign norms, particularly regarding copyright ownership, profit allocation, tax incentives, and dispute resolution.

To address these challenges, the authors advise structuring co-productions through:

• detailed joint-venture or co-production agreements, clearly allocating responsibilities, creative control, and territorial rights;
• choice-of-law and jurisdiction clauses tailored to neutral or enforceable forums;
• harmonisation of IP provisions, ensuring mutual recognition of rights and obligations under both systems;
• contingency planning for funding gaps or regulatory delays, including fallback options for state incentives or approvals for censorship; and
• compliance with copyright and AI-related regulations, regarding the use of performers’ voice and image and AI-generated content.

Cultural differences also play a significant role. In the authors’ experience, international partners may have contrasting expectations regarding production timelines, approval processes, or reporting standards.

In co-productions involving public funding, such as those supported by EFICINE or international film commissions, additional care must be taken to ensure compliance with each jurisdiction’s subsidy rules, local spending requirements, and content quotas.

There are no health measurements or restrictions regarding COVID-19 in force for any industry, including large-scale productions.

In Mexico, the most prominent union in the industry is the National Association of Actors (Asociación Nacional de Actores – ANDA, due to its Spanish acronym). Artists form ANDA from cinema, theatre, radio, television, stunt, nightclubs, and other artistic and entertainment branches “below the line” of production. ANDA has historically been an active union with relevant celebrities acting as its representatives.

ANDA has entered into multiple collective bargaining agreements (CBA) with different entertainment companies. Salary tabulators of such CBA are used as a reference for the salary and compensation that different positions in the industry shall be paid, even by companies that have not entered a CBA with ANDA.

According to the Mexican Federal Labour Law (LFT), CBAs must be reviewed annually regarding salaries and biannually regarding the total terms of the CBA. Annual negotiations between the ANDA and the industry are conducted, and these negotiations have not significantly altered the contractual terms of the industry in recent years. Likewise, no relevant strikes or stoppages have occurred in recent decades.

ANDA and other creative unions were actively involved in promoting legislative changes to address AI-related concerns. Through direct engagement with the government and advocacy for performers’ rights, they contributed to the legislative process that resulted in the amendments to the LFDA and the LFT published on 14 May 2026, which introduced the first sector-specific AI regulation in Mexico, establishing a comprehensive framework for the use of AI in connection with the voice, image, and performances of performing artists.

The authors do not foresee any significant impact from future strikes in the industry. AI-related concerns have been addressed through the LFDA amendments. However, unions have been actively advocating for private copying laws.

Content creators are typically hired under commercial agreements, rather than labour agreements, unless they qualify as performing artists under the recently amended LFT and LFDA, in which case AI-related use of their image and voice would be subject to specific contractual requirements; however, the market continues to operate predominantly under service agreements. Therefore, there has been no attempt by this type of creator to unionise. Note that the content creators’ industry has not been specifically regulated in Mexico (except for a consumer protection guide). Most of these creators are hired as freelancers or independent contractors, without having any labour rights.

The Mexican Income Tax Law provides a tax incentive for the production and distribution of Mexican films and theatrical productions. This incentive enables income taxpayers to support national film projects, and in exchange for their investment, they receive a tax credit equivalent to the amount contributed. The tax credit can be used to reduce the taxpayer’s annual income tax and provisional payments within the same fiscal year. Note that incentives may not always cover all kinds of content production.

The tax credit is not cumulative for income tax purposes and may not exceed 10% of the income tax incurred in the fiscal year immediately preceding the year in which it is applied.

To qualify, the investment project must involve cinematographic production carried out in Mexican territory, specifically intended to produce a cinematographic film through a process that combines the creation and production of the film, as well as the human, material and financial resources necessary for such purpose.

The applicable guidelines must be followed to access the incentive. This tax incentive cannot be applied jointly with other and similar tax benefits provided under the Mexican Income Tax Law.

For several years, film producers have been utilising the film tax incentive, although it is not employed in all productions. The authors understand that its use, in most cases, depends on the financial situation of each film project.

Furthermore, in February 2026, a Presidential Decree was published in the official gazette establishing a new tax incentive for cinematographic and audiovisual production. The incentive provides a tax credit of up to 30% of the total project cost, capped at approximately USD2.3 million (MXN40 million) per project and per beneficiary, and is available for fiction or animation feature films and series, documentary feature films and series, and specific animation, visual effects, or post-production processes.

Projects must source at least 70% of their supplies domestically. The incentive is available to Mexican individuals and entities, as well as foreign persons including those without a permanent establishment in Mexico, provided the production is carried out through a Mexican resident engaged in cinematographic or audiovisual production. The annual budget for the incentive is administered by the Ministry of Finance, the Ministry of Culture, and the Mexican Cinematography Institute (IMCINE).

Additionally, certain Mexican states, such as Jalisco, occasionally offer local incentives (eg, Cash Rebate 2025 and Filma Jalisco) to promote regional film production by reimbursing a percentage of eligible expenses incurred within the state. These incentives operate independently from the federal tax credit system and may vary in scope and availability depending on local budgetary conditions and policy priorities.

Other jurisdictions may offer larger tax credits or allow taxpayers to deduct certain investments related to film productions, creating competitive pressure. However, moving productions between jurisdictions involves significant challenges, including changes in service providers, language barriers, equipment and talent availability, and additional administrative and operating costs that reduce profit margins.

Additionally, cross-border tax payments can create financial complications, as it is not always possible to credit taxes paid in one jurisdiction against those in another.

Prior to starting operations or taking advantage of tax incentives, entertainment companies should review the potential legal and tax restrictions applicable in each jurisdiction. This allows companies to define the margin of operational movement available to leverage tax incentives effectively.

Tax authorities have been increasingly scrutinising cross-border operations. Whether or not entertainment companies take advantage of cross-border tax incentives, they may be subject to review. The authors recommend documenting all operations, payments, tax benefits, and relevant movements in detail to demonstrate the business reason and legality behind each transaction.

In that sense, whether they take advantage of cross-border tax incentives or not, and make payments abroad, entertainment companies may be subject to questioning and review by tax authorities. If this is the case, the authors recommend documenting all operations, payments, tax benefits, and any other relevant movements in detail to demonstrate the business reason and legality behind each transaction.

To date, the authors have not identified formal co-financing programmes between private investors and the government in Mexico, at least not in the form of structured partnerships where both parties share investment and risk in a co-ordinated manner.

However, Mexico does offer public mechanisms that support the entertainment sector independently, particularly in the form of subsidies. Examples include tax incentives described previously, and FOCINE (Fomento al Cine Mexicano), a public funding programme granted by the federal government through the Mexican Cinematography Institute. FOCINE supports specific stages of film production through annual calls and is structured as direct financial aid, not as a tax incentive or investment vehicle.

While FOCINE could be combined with private investment to complete a project’s budget, the authors have not seen this subsidy applied in the projects handled by their clients. In practice, most productions rely on private capital or standalone public support, rather than on structured public–private co-financing models.

On 2 July 2025, the Mexican Supreme Court decided case number A.D. 6/2025, regarding the ownership of content created by AI. The Court’s final ruling was subsequently published, providing the first judicial pronouncement on AI-generated content in Mexico.

A user of an AI program designed to generate images, called Leonardo AI, applied to the Mexican copyright office to register an image. In the application, the AI was named as the author of the work. The copyright office denied registration, based on the LFDA, stating that a human being must create a work of authorship and that it must be an original creation, which can only originate from human creativity.

The user appealed the decision. Once the matter was admitted and registered with the IP specialised court of appeals, the party filed a motion for the Supreme Court to decide on its merits. The Supreme Court’s final ruling confirmed that AI cannot be the author of a work under the LFDA. A preliminary draft had also stated that AI-generated content may be considered public domain, but this aspect was excluded from the final decision, leaving the legal status of AI-generated content partially unresolved.

Although the ruling provides important clarity on the question of AI authorship, the exclusion of the public domain analysis from the final decision leaves questions unresolved. Whether AI-generated content remains unprotectable or may acquire some form of protection through human intervention has not been definitively settled. This ambiguity will likely remain central to the AI debate in Mexico until further legislative or judicial developments address it.

In practical terms, while the ruling confirms that AI-generated output falls outside the standard copyright framework, the code for AI software itself remains protectable. This distinction is relevant following the amendments to the LFDA published in May 2026, which expressly extended copyright protection to AI programmes as literary works, excluding from such protection any AI systems designed to cause harm to other programmes or equipment, or that infringe third-party rights. This could imply a liability regime for AI systems without requiring proof of intent on the part of the developer.

Moreover, in case A.D.R. 131/2021, the Supreme Court also decided a case in connection with the possibility for a corporation to be the owner of a work of art. The Supreme Court decided that a copyright is not a right that legal entities may claim in their favour, but only natural persons, since creativity refers to aspects of human nature.

Copyright law lawfully grants an author (natural person) the right to exclusively exploit their creation.

In practical terms, this means that:

• AI-generated works (output) cannot be registered for copyright in Mexico, regardless of the level of intervention;
• no person or entity can claim exclusive rights over purely AI-generated content; and
• such content is free for anyone to use, reproduce, or adapt, as it is not protected by copyright law.

The concept of creativity is complex because some might argue that generative AI is creative and autonomous; however, under the LFDA, only human beings can create works of authorship. This principle has been reinforced by the recent LFDA amendments, which introduced the first sector-specific AI regulation in Mexico, establishing a comprehensive framework for the use of AI in connection with the voice, image, and performances of performing artists.

Key provisions of the LFDA reform include:

• a requirement that employment contracts with performing artists expressly stipulate conditions and compensation for any AI-based use of their voice or likeness;
• mandatory prior, express, and written consent for the use or publication of a performing artist’s image, voice, and characters, now extending to AI-generated outputs;
• a new exclusive right for performing artists to authorise or prohibit the “impersonation” of their performances by AI systems that generate “clones” or simulate their voice in an identifiable manner;
• the exclusion of AI-related uses from the rights automatically granted under audiovisual production contracts, requiring separate written agreements;
• new time-limited rules for advertising contracts involving performer content, including six-month dissemination caps and mandatory re-authorisation after one year; and
• increased penalties for violations, with fines ranging from approximately USD34,070 to USD272,570.

Performing artists are also entitled to revoke their authorisation for justified cause, which creates significant operational uncertainty. AI models cannot technically “unlearn” data once trained, and the law provides no definition of what constitutes justified cause, leaving the matter open to interpretation by Mexican courts.

Furthermore, where a performer has been paid for a specific use, consent is presumed only for that exact purpose, and any different use, including AI-generated outputs, requires additional authorisation and new compensation. In cases of contractual ambiguity, the LFDA presumes in favour of the performing artist, making it essential to define expressly the scope of the rights granted.

Beyond the Supreme Court’s ruling in A.D. 6/2025, there is currently no public record of Mexican courts issuing decisions directly on the use of AI for generating or training on entertainment content (eg, films, music, or television footage). However, the LFDA amendments of May 2026 have established a statutory framework that is likely to generate new disputes and judicial interpretation, particularly regarding the scope of performer consent, the enforceability of revocation rights, and the boundaries of AI-generated content in audiovisual production.

In a recent criminal case, the Court defined AI, but it was not related to media and entertainment (M&E) content.

The legal status of using copyrighted footage for AI training remains unsettled in many jurisdictions, including Mexico. However, the trend is moving away from unlicensed, large-scale scraping of content toward negotiated licensing agreements.

While Mexico has not yet enacted specific legislation addressing AI training and copyright, the LFDA shifted the landscape for AI licensing in the entertainment sector. The use of third-party footage for AI training without a licence could still expose developers to infringement claims, especially if the footage is protected by copyright.

The ANDA and the industry have always been active regarding collective bargaining negotiations. The authors do not foresee any significant changes in the industry, other than the common business-as-usual salary and benefits increases.

Even though entertainment unions are active, a wide percentage of professionals in the industry are hired informally or through freelance agreements. This hiring structure may expose entertainment companies to individual or collective labour claims.

Unlike Hollywood, Mexico currently lacks a unified or regulated framework for revenue-sharing in connection with digital-first content. However, the regulatory landscape for streaming platforms has changed significantly with the enactment of the Federal Law on Cinema in May 2026, which for the first time extends regulatory oversight to digital VOD platforms. This represents one of the most relevant developments for the streaming sector in Mexico, as platforms operating in the country must now comply with a new set of obligations.

The Law defines VOD platforms as online services offering access to audiovisual and cinematographic content through catalogues available by subscription, payment, or advertising, under the editorial control of the provider. Social media platforms and those hosting user-generated content without editorial control are excluded. Key obligations for VOD platforms include:

• a permanent national content section featuring Mexican cinematographic and audiovisual works in their catalogue;
• obligation to provide subtitled versions, audio description, and dubbing with human voice actors, in line with the LFDA;
• age classification for cinematographic works in categories AA, A, B, B15, C, and D, with the last two being restrictive (platforms must display age ratings in accordance with secondary regulations, which have not yet been published);
• compliance reports to the Ministry of the Interior and IMCINE; and
• filing preservation copy of national feature-length works to the National Film Trust.

Notwithstanding these new regulatory obligations, Mexico still lacks standardised models or collective bargaining agreements dictating how streaming profits are to be distributed. Revenue-sharing terms continue to be negotiated on a case-by-case basis, leading to inconsistencies and a lack of clear benchmarks.

Another key issue relates to rights clearance, especially for content that is exclusively commissioned or produced by a streaming platform. Platforms often seek to secure robust IP rights to maximise long-term monetisation, including not only the initial streaming rights but also potential avenues like international distribution or merchandising. The scope of these IP rights and the compensation for their acquisition become crucial points of negotiation.

Mexico is well-known for its telenovella industry, which has now shifted its production and distribution focus to the streaming environment. In this context, the sector is leveraging its previous experience in traditional TV to model revenue-sharing negotiations; however, these models often fall short when applied to streaming environments. As the digital market in Mexico continues to develop, there is growing interest from unions and guilds in establishing clearer practices and possibly advocating for collective mechanisms.

The approach to in-season stacking (making current season episodes available on a related streaming service) when there is no express licence agreement involves several considerations.

• If a dispute arises due to unclear contractual terms, platforms may seek negotiation or mediation, whether privately or before the copyright authority. Copyright disputes can also be brought before civil courts. To enable in-season stacking, platforms often negotiate amendments or side letters with producers or rights holders, which may involve additional payments or revised terms. Platforms typically weigh the commercial benefits (eg, increased subscriber engagement, and reduced churn) against the legal and financial risks of proceeding without explicit rights, and may delay stacking until rights are clarified.
• Platforms may weigh the commercial benefits of in-season stacking (eg, increased subscriber engagement, and reduced churn) against the legal and financial risks of proceeding without explicit rights. In some cases, platforms may choose to delay stacking until rights are clarified.

If the original licensing or production agreement does not expressly address in-season stacking, platforms should proceed with caution and refrain from making episodes available until new terms are negotiated, to avoid potential legal exposure.

As mentioned, the ANDA has salary tabulators that serve as a reference for hiring certain positions within the industry. Such salaries may be considered part of the production costs. Also, ANDA may charge fees for the provision of certain services or for providing its affiliates for productions.

M&A transactions involving entertainment companies present unique legal challenges due to the intangible nature of the assets in question. Unlike traditional industries, where value lies in tangible infrastructure, entertainment businesses derive most of their worth from IP, particularly copyright-protected audiovisual works, underlying scripts, image rights, character rights, and related licensing arrangements.

A frequent complication arises from the need to comply with statutory requirements governing the transfer or licensing of copyright in Mexico. The LFDA requires that any assignment or license of economic rights be in writing, clearly defines the rights granted, specifies the term and territory, and provides for remuneration. By default, such assignments or licences are presumed to be non-exclusive and for a term of five years, unless otherwise expressly agreed. To be enforceable against third parties and to provide legal certainty, these agreements must be registered with the National Copyright Institute (INDAUTOR). However, registration is not a prerequisite for the existence or enforceability of rights between the parties.

For example, in the case of audiovisual works, there are some complexities under Mexican law. Unless otherwise agreed, the LFDA presumes that the producer holds the economic rights to audiovisual work as a whole, except for incorporated musical works which remain subject to separate rights. Individual contributors (such as directors, screenwriters and composers) retain rights over their respective contributions, provided this does not interfere with the normal exploitation of the work. Authors retain inalienable and perpetual moral rights, which prohibit any distortion, mutilation, or modification of the work that could harm the author’s honour or reputation without explicit consent. Consequently, in the sale of a film or TV library, parties should verify that any modifications, adaptations or re-editing do not infringe upon an author’s moral rights, unless a statutory exception applies.

Existing licensing arrangements may also present complications. Certain licences may be exclusive or irrevocable and may include revenue-sharing provisions that extend over long periods. They may also restrict exploitation to specific territories or distribution channels, potentially preventing the buyer from utilising new platforms such as digital streaming. An incomplete or vague licence agreement may trigger default rules under the LFDA, which presume a non-exclusive transfer limited to five years within Mexico. The seller’s compliance with these formal requirements, including registration with INDAUTOR, helps avert future disputes over the exclusivity or duration of rights.

Moreover, any liens or encumbrances must be disclosed and discharged prior to closing, or be explicitly assumed and renegotiated. It is essential to note that, under Mexican law, the economic rights themselves are not subject to pledge or attachment; however, the fruits and products derived from their exercise may be subject to such. Failure to identify or clear these encumbrances can result in future disputes over ownership or exploitation rights. Thoroughly addressing these considerations enables potential buyers to better assess the value of the target assets and mitigate the potential risks associated with acquiring entertainment content.

The combination of cable companies with studios and streaming platforms may give rise to vertical antitrust considerations, particularly in markets where a limited number of players participate across multiple segments of the value chain. This structure can affect market dynamics by shaping access to distribution channels, pricing strategies, and the availability of diverse content, including that produced by independent or local creators.

Vertical integration, in which a single company participates in content production, distribution, and direct-to-consumer services, may raise concerns about potential foreclosure or the creation of preferential conditions. In certain scenarios, integrated firms may be positioned to prioritise their own content, limit third-party access, or design bundling schemes that influence competition. Depending on the circumstances, such practices could be evaluated under antitrust rules related to tying or exclusionary conduct.

At the same time, the market has undergone significant evolution. Large studios and networks now operate alongside global platforms and digital-native creators, who have a broader reach and lower distribution costs. Platforms such as YouTube, TikTok, and Netflix have altered traditional content strategies, leading many incumbents to explore partnerships or acquisitions, as seen in Disney’s integration with Hulu. Some legacy groups have undergone internal restructurings in response to these shifts, including Paramount.

In Mexico, vertical integration in content and distribution markets has been subject to regulatory review. In the 2021 TelevisaUnivision transaction, the IFT assessed the implications of a combined presence in content production, broadcast television, fixed broadband (through Izzi), and the streaming platform ViX, including potential effects on rival OTTs and independent producers. The transaction was cleared without remedies. In contrast, the IFT imposed conditions in the Disney–Fox case (file UCE/CNC-003-2021), requiring the divestiture of Fox Sports Mexico to address specific concerns in the sports content segment for paid TV and streaming.

The increasing role of data in digital markets also presents additional dimensions for antitrust assessment. Access to user data across services may be used to inform content decisions, personalise advertising, and develop competitive pricing strategies. These tools can strengthen market presence and will likely be part of future evaluations by Mexico’s new enforcement institutions, the Antimonopoly National Commission and the Digital Transformation Agency.

Representations and warranties (R&Ws) in M&A deals are carefully structured to mitigate risks associated with talent contracts. Purchasers typically commence with comprehensive due diligence to uncover exclusivity clauses, renewal mechanisms, and payment structures with residual payments, shaping the breadth and specificity of the R&Ws negotiated.

Sellers are expected to offer robust R&Ws that confirm:

• the validity and enforceability of all talent agreements;
• compliance with labour, IP, and social security laws; and
• the absence of any current or threatened disputes with talent.

These representations are sometimes qualified by materiality thresholds and knowledge qualifiers. Deal structures commonly include survival periods for talent-related R&Ws (usually 12 to 36 months), indemnification provisions with capped liability and basket thresholds, and, in more complex transactions, representation and warranty insurance to backstop liability.

To manage exposure further, deal structures commonly include mechanisms such as:

• survival periods for talent-related R&Ws, usually spanning 12 to 36 months; and
• indemnification provisions with capped liability and basket thresholds for claims.

In more complex or high-stakes transactions, parties are increasingly adopting R&W insurance to backstop liability, especially when sellers resist post-closing risk.

Additionally, purchasers frequently arrange retention amounts or escrow mechanisms linked to unresolved talent commitments, providing safeguards when talent agreements contain deferred payments, performance incentives, or exclusivity terms that might face challenges.

Advising on entertainment M&A transactions also requires careful analysis of talent contracts and legacy IP rights, as both may represent significant legal and financial liabilities – for example, provisions regarding moral rights and the right of publicity, which require special consideration under Mexican law, as their legal nature and enforceability differ from those in other jurisdictions. In this context, the right of publicity is considered a personality right, and its commercial use requires the express consent of the individual. In contrast, moral rights are inalienable, unwaivable, and perpetual; and, while they do not create ongoing financial obligations, they impose strict limitations on the modification, attribution, and use of the work, which can survive an acquisition and restrict the buyer’s ability to exploit the content.

Additionally, legacy IP rights may raise ongoing mandatory obligations, particularly in the context of labour relationships and collective rights management. Unlike in jurisdictions such as the United States, where residuals and royalties are often governed by union-negotiated collective bargaining agreements (eg, Screen Actors Guild – American Federation of Television and Radio Artists, or Writers Guild of America), Mexican law imposes non-waivable royalties by statute for the public communication or transmission of copyrighted works and performances. Pursuant to the LFDA, these royalties must be paid to authors regardless of contractual terms and may be collected through authorised collective management organisations, and such remuneration is mandatory and inalienable. As a result, there is an obligation to compensate authors and performers for any public exploitation of their works, and these obligations cannot be waived or bypassed through private agreements.

The recent amendments to the LFDA also reinforced certain statutory rights of artists and performers, including specific protections regarding the use of their image, voice and performances (including through artificial intelligence), as well as additional mandatory contractual requirements governing such authorisations. In this sense, buyers should carefully review whether talent agreements expressly authorise the use, reproduction or simulation of an artist’s image, voice or performance (including, but not limited to, through AI tools), and whether any required remuneration or contractual conditions have been satisfied.

Accordingly, cross-border transactions require particular attention to the treatment of property and moral rights, as the latter, under Mexican law, are perpetual, inalienable, unwaivable and imprescriptible. Counsels must analyse the interplay between jurisdictions and ensure that legacy content exploitation does not trigger moral rights claims, particularly where the buyer anticipates adaptations, remakes or re-edits, or AI-assisted exploitation of existing content or performances. Successful integration of legacy content into new corporate portfolios depends on careful due diligence, jurisdiction-specific analysis, structuring, and, if necessary, renegotiation of key contracts to ensure continuity and commercial viability.

Mexico lacks standardised accounting for streaming revenues in Mexico regarding profit-sharing, which creates transparency issues and may lead to disputes. In this context, growing awareness in the industry is leading to audit and reporting clauses aligned with international best practices.

The legal framework does not impose statutory requirements for transparency or audit rights in profit-sharing arrangements, so private contract negotiations typically govern these matters. Unlike some European jurisdictions where transparency clauses are mandated by law, in Mexico, platforms often retain exclusive control over performance metrics, revenue calculations, and exploitation data.

Nonetheless, audit and transparency clauses should always be included in contracts involving profit-sharing to mitigate information asymmetries. While not legally required in Mexico, their inclusion is becoming more common. Recommended elements include:

• scope of audit (specific financial records and data);
• frequency and audit period;
• notice requirements (the contract should specify the required advance notice period before initiating an audit);
• use of independent auditors (the terms should indicate whether the auditor must be independent and mutually agreed upon by the parties);
• access to supporting documentation (the auditor must be granted access not only to financial summaries but also to supporting documentation, such as detailed accounting records or sublicensing agreements);
• confidentiality provisions (the clause should include a confidentiality obligation, ensuring that any information reviewed during the audit process remains protected and is not disclosed to third parties, except as required by law or as necessary to enforce rights under the agreement); and
• dispute resolution mechanisms for disagreements arising from audit findings.

In Mexico, non-compete and non-solicitation clauses are treated differently depending on whether they apply to companies or individuals. Clauses between companies, particularly in the context of mergers and acquisitions (M&A) or joint ventures, may be valid if they meet specific antitrust standards and are proportionate to the transaction. Clauses imposed on individuals after the end of an employment relationship, by contrast, face severe constitutional and statutory limitations.

For companies, non-compete clauses are generally enforceable if they:

• bind only the parties and their economic group;
• cover only the relevant products or services;
• are limited in duration, usually not exceeding three years; and
• apply only in the geographic areas where the seller had operations.

In contrast, post-employment non-compete or non-solicitation clauses imposed on individuals are generally unenforceable. Article 5 of the Mexican Constitution guarantees the right to freely engage in any lawful profession or trade, and the LFT reinforces this by recognising work as a social right. As a result, restrictive covenants that limit a former employee’s ability to work are typically null and void.

In the entertainment sector, companies may protect sensitive information through confidentiality clauses and carefully drafted exclusivity agreements during the term of a contract, but any post-employment restriction on individuals must be designed with constitutional limitations in mind and will rarely be enforceable.

Technologies such as AI, Virtual Reality (VR) and Augmented Reality (AR) are creating new business models and opportunities, but they also introduce legal and contractual challenges that must be addressed.

Talent and Likeness Rights

Following the LFDA and LFT amendments of May 2026, the use of AI to replicate voices, images, or performances of artists is now subject to new rules. Performing artists hold an exclusive right to authorise or prohibit AI-generated modifications or simulations of their work, and any such use requires prior, express, and written consent through a separate agreement. Consent is presumed only for the exact purpose agreed upon, and any different use requires additional authorisation and new remuneration. Exclusivity periods in advertising arrangements involving performer content are capped, with mandatory re-authorisation and updated compensation required after one year. These provisions are reinforced by the Cinema Law’s requirement that dubbed versions of foreign content be produced exclusively by human performing artists.

Data Protection and Privacy

VR and AR experiences often collect large amounts of user data. Contracts must address how this data is processed in compliance with Mexican data protection laws. These considerations are particularly important when the data is used to train AI models, and must be carefully incorporated into entertainment contracts.

Distribution and Monetisation

New platforms and formats enabled by these technologies are changing how content is distributed and monetised. Contracts are evolving to cover streaming, interactive experiences, and other digital distribution methods, ensuring that revenue sharing and reporting are clearly defined.

Dispute Resolution

As these technologies cross borders, contracts increasingly contain detailed dispute resolution clauses. Note that clauses agreeing to the application of foreign law or courts may be considered null and void under recent Supreme Court case law.

Entertainment companies, content creators, and technology providers operating in Mexico should update their standard agreements and policies to reflect the LFDA and LFT amendments on AI-related performer rights and the Cinema Law’s obligations for VOD platforms, in addition to ongoing developments in technology and data protection law.

The choice of business structure affects the liability, tax treatment, and operational flexibility. Proper entity formation, insurance, and contract management are critical to protect the company and its stakeholders.

Business Structure: Common Entity Types

Sociedad Anónima (S.A.)

S.A. is a corporate-type structure and the most commonly used form of commercial entity in Mexico. It may have either fixed or variable capital, and its stock is represented by shares owned by shareholders.

Sociedad de Responsabilidad Limitada (S. de R.L.)

S. de R.L. is a partnership-type structure and the second most commonly used form of commercial entity in Mexico. It may have either fixed or variable capital, represented by equity interests (partes sociales) with restricted transferability.

Sociedad Anónima Promotora de Inversión (S.A.P.I.)

S.A.P.I. is a sub-type of S.A. regulated by the Mexican Securities Market Law, but not subject to the supervision of the CNBV. It may have either fixed or variable capital and was originally created to promote investment by national and foreign investors, allowing certain exceptions from general corporate rules.

Insurance

Productions must obtain various types of insurance, including general liability, errors and omissions, workers’ compensation, and, if working with unions, additional coverage as required by CBAs.

Contracts and Agreements

• Use clear, written contracts for all cast, crew, vendors, and locations.
• Ensure a proper chain of title for IP (eg, option/purchase agreements, and work-for-hire agreements).
• Address profit participation, credit, and dispute resolution in operating agreements and production contracts to ensure effective management.

Guilds and Unions

Many artists (as individuals) are part of the Mexican guilds, such as ANDA or ANDI; however, entertainment production companies are not generally part of these unions. Production companies may be members of these companies and assign the management of certain rights, but they may also exercise their rights individually or through contracts, and this is how they generally operate.

Free Ad-Supported Streaming Television (FAST) channels present distinct legal and business considerations compared to traditional AVOD and SVOD models in Mexico.

Business and Monetisation Model

FAST offers scheduled, linear programming (like traditional TV) for free, monetised entirely by ads. This is ideal for repurposing content libraries, unlike SVOD (subscription-based, premium content) or AVOD (on-demand, ad-supported).

Licensing and Rights

FAST requires specific “channelisation” rights for linear scheduling, and deals are typically non-exclusive, contrasting with the often exclusive rights sought for SVOD.

Advertising and Revenue Share

Ad sales on FAST mimic broadcast, often programmatic and at lower CPMs (cost per mille), and revenue splits must reflect different ad loads and viewer behaviour. Contracts require clarity on inventory control, brand safety, and metric transparency.

Data Privacy

While AVOD/SVOD collect detailed user data, FAST’s linear nature can limit granular individual tracking. Compliance with Mexico’s data protection laws remains essential. Particularly in Mexico, FAST’s free model offers a significant growth channel for existing IP, appealing to cost-conscious audiences.

Market Opportunity

Particularly in Mexico, FAST’s free model offers a significant growth channel for existing IP, appealing to cost-conscious audiences and expanding viewership.

Netflix and other studios are modernising talent compensation for interactive entertainment, moving towards predictable, upfront payments (fixed fees or buyouts) and performance-based incentives tied to clear metrics like viewer engagement, completion rates, and critical acclaim.

Key considerations include meticulously defining the scope of work (which may involve developing multiple versions of scenes, dialogues, and emotional variants), clearly defining IP rights over interactive elements (either by licensing or buyout, including derivatives), and establishing engagement-based compensation metrics such as user completion rates, interaction rates, and content longevity.

Since traditional “residuals” based on reruns or sales are less applicable to subscription streaming, and traditional “profit participation” is being phased out, performance-based bonuses become crucial. Engagement metrics (eg, user completion rates, interaction rates, user time spent, and re-engagement), critical acclaim and awards, and evergreen (ie, longevity) content are now more important elements for compensation. This would change from role to role.

These models pose the challenge of drafting clear and practical clauses that account for future technology uses, while providing predictable, upfront financial security and the flexibility to maximise content reach globally.