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Originally Posted by En Sabah Nerd

Honestly there isn't a single answer, it really varies from license to license. The big play for a company is to acquire the "master license" which is what basically secures rights to that license as exclusively theirs in their main market. Hasbro for example has the master license for Star Wars which is why the only other figures made in similar scales to any of their lines are import figures (which aren't sold at the same traditional markets as Hasbro's product or for the same price range). So to answer why so many companies are able to do Avatar figures, it's probably because there isn't a single master license holder and the owner of the license is happy to make more deals and therefore more money. I'm probably over-simplifying things but when we start talking about licensing and companies it can become a seriously involved legal and business lecture so simpler might be better.

That definitely sounds familiar. I have heard of the master license before. I greatly appreciate what you've written here. My additional question is are companies allowed to make merchandise for shows that were written off for tax purposes?

Also, if you could point me to any additional resources about the complicated legalities behind merchandising and licensing, that would be awesome. Thank you.