Music Publishing Contracts

Music Publishing ContractsMusic publishing can be daunting to musicians with no experience of music law. Contracts and agreements appear intimidating and many musicians avoid learning about them, leaving themselves at a disadvantage.

To try to help you navigate the apparent minefield of music publishing we have pulled together some simple definitions of standard music publishing deals you might encounter. These definitions are intended as an initial guide to aid understanding. You should still consult a specialist in music law to review contract terms.

This article outlines the variables involved and the types of agreement commonly in use.

 

Variables

There are 3 main variables in publishing contracts:

  1. The Property(Who owns the copyright? What works are covered?)
  2. Extent (Who has what rights? e.g.right to collect money. issue licenses.. and for how long?)
  3. Money (Advances, royalty splits, fees and costs etc)

 

The Property

Agreements have to spell out what is being agreed – exactly. The scope of the deal, what compositions are involved, what rights in terms of the works are being traded, and what is going to constitute ‘delivery’ by the writer. There are traps and tricks at every turn and numerous things of which the songwriter ‘should be mindful’ buried in there. Generally, the publisher wants it all.

Your contract will also need to deal with moral rights.

 

The Extent

It is sensible to recognise up-front that a self-interested party is going to want the rights to everything, for everywhere, for ever and ever…

How much of everything is what we need to be wary of, in the terms which define the nature of ‘the property’, as above. Other considerations will be ‘the term’ and ‘the territory’.

For example, when we think of ‘the term’ the duration of the deal can turn out to be very amorphous: it is not uncommon for a ‘term’ to be defined by a specified number of ‘pieces’ which have been ‘delivered’. Often ‘delivery’ will be defined in the agreement as something like ‘recorded by an artist on a major label’ or some such other clever wording that means your time is never served if hit-making success proves elusive. Co-writers also need to look out for the trick whereby each qualifying ‘piece’ may be defined as being a ‘sole composition’. This again means, if you’re a collaborator (not an unusual circumstance), that you will never fulfil your contractual obligations and ‘the term’ will never end.

So we need to make sure that ‘term’ gets defined explicitly as a calender period rather than the usual nonsense they expect to get away with by dangling money.

However ‘the property’, as above, is defined, we need to makes sure that we get it all back at the term’s completion.

‘Rights Reversion’ must be an essential requirement – from the writer’s point of view..

Publishers all want world-wide rights to maximise their earnings potential. Actually, these days, with the rise of satellites and possible off-world futures, it’s usually extra-terrestrial rights for the entire universe as well.

Writers need to restrict that any chance we have in terms of what is realistic and appropriate. For instance, if you have no market in the spanish-speaking world and the publisher has no particular strategic muscle in those cultures, then why on earth should they have exclusive rights for our stuff in south-America ?

 

The Money

This notion covers things like the advance, royalty splits – and other important areas of budgetary considerations regarding expenses like admin costs, legal fees and indemnifications etcetera – all those things that accumulate and interfere with you getting paid your share.

That is why we need the right to audit, too.

 

Contract Types

There are seven main types of music publishing contracts that you are likely to encounter.

  1.  Single Song Agreement
  2.  Exclusive Song Writer Agreement
  3.  Co-publishing Agreement
  4.  Administration Agreement
  5.  Collection Agreement
  6.  Sub-Publishing Agreement
  7.  Purchasing Agreement

 

Single Song Agreement

This is an agreement between a writer and a music publisher where the writer grants specific rights for one or more songs to the publisher. The writer will be paid a one-time recoupable advance by the publisher. The publisher will handle the business aspects of the work and pay royalties to the songwriter. With the exception of print music the songwriter usually gets a 50% share of the money collected by the publisher.

Songwriters should be mindful of a few things:

Be careful that the deal does not simply state a share drawn from a limited list of specified publishers receipts, like “mechanical, synchronization and transcription”. This could mean that the publisher can collect from income streams outside of this limited list. A list is ok, but make sure to end it with a statment like “… and all other monies not referred to by this agrreement”.

Ensure that the contract explicitly states that you get a share of publishers advances and guaranteesthat are specifically for your compositions.

To stop the publisher from giving discount deals to their sister or affiliated companies a statement to the effect that they must grant licenses to affiliate companies on a customary, arm’s length basis should be included.

 

Exclusive Song Writer Agreement – ESWA

The ESWA is a contract normally for staff writers where the song writer normally grants the entire publisher’s share of the income to the music publisher. Any compositions written within a time period specified in the contract belong exclusively to the music publisher.

EWSA deals are normally only offered to writers with a track record of writing hits making the publisher feel confident that they will recoup their investment in the writer.

The writer negotiates a deal with the publisher for an advanve based on future royalties, for all or some of the writer’s songs, and in exchange the writer grants exclusive rights to those songs to the publisher. The advance amount entirely depends on the writer’s negotiating skills and their effective market value as a writer. The writer is normally paid on a weekly or quarterly basis.

An ESWA can be tied to, or independent of, a record contract.

 

Co-publishing Agreement – Co-pub

The co-publishing deal is the most common form of publishing agreement where the songwriter and the music publisher co-own the copyrights of musical compositions governed by the agreement. A split of the royalties is agreed where the song writer assigns a percentage to the publisher. The split is normally, but not always, 50/50 with the writer assigning the publisher’s share to the publisher, and retaining all of writer’s share.

In a 75/25 co-pub deal the writer keeps 100% of the song writer’s share, and 50% of the publisher’s share, which is 75% of the entire copyrights. The remaining 25% is assigned to the publisher. When royalties are paid the writer/co-publisher will receive 75% of the income, while the publisher will receive 25% of the income.

The Net Publishers Share (everything received by the publisher meaning both the the share of income allocated to the publisher and the writer) is gross income and is divided up like this:

  1. Administration Fee
  2. Songwriter royalties
  3. Expenses

Admininstration fees, usually between 10% and 20%, are intended to cover indirect expenses such as rent, utilities, staffing costs etc. In reality this is just a bargaining chip.

Expenses are direct costs, specifically related to the song. Direct expenses include copyright registration fees, demo recording costs, collection costs, and lead sheets

Who administers the deal is important. With only one copyright owner it may be obvious but when copyright ownership is shared the exact roles and responsibilities need to be defined. The same is true when there are any restrictions placed upon administration, or exceptions from.

In a true co-administration co-publishing deal a license is required by both owners in order to use the song.

Exceptions can be applied to co-administration co-publishing deals where certain types of license can be granted by only one administrator, for example a recording artist who is likely to have recording contract obligations too regarding mechanical licenses, promotional videos etc. Usual exceptions include:

  1. Controlled Compositions (governed by another deal)
  2. Statutory Rate Licenses (A large subject that can hide a multitude of sins and overall worth objecting too)
  3. Print (Exclusivity to print the music by one party or the other)

 

Administration Agreement – Admin

An agreement between a songwriter/publisher and an independent administrator, or between a songwriter/publisher and another music publisher. An admin agreement is used when the songwriter self-publishes their work and licenses songs to the music publisher for a fixed term at an agreed split of royalties in a specified territory.

The music publisher/independent administrator administers and exploits the copyrights for the copyright owner, be that the songwriter or a separate publisher. Exploitation functions typically include accountant or business manager roles.

Admin deals tend to be reserved for only the most popular of songwriters. Ownership of the copyright is usually not transferred to the administrator. The licensed music publisher gets approximately 10-20% of the gross royalties from the agreed territory during the agreed time period.

Admin deals are also used when songwriters signed to different publishers, or songwriters wh do their own publishers, have co-written a piece of work.

If more than one party administers is often called a co-administration agreement.

 

Collection Agreement

Similar to an admin deal in that the writer retains the copyrights, but the publisher does not conduct any exploitation role. The publisher only collects and disburses earned royalties governed by the contract.

 

Sub-publishing Agreement

Governing foreign territories, the publisher agrees terms similar to an admin or collection deal with a publisher in the foreign territory. There is no transfer of the ownership of copyrights to the subpublisher. The publisher grants the sub-publisher to rights to act on its behalf in specified foreign territories.

Territories can cover more than one country, such as European Union (EU), or individual countries.

 

Purchase Agreement

One music publisher acquires in whole or in part the catalogue of another music publisher. In this case, a “due diligence” investigation is done to determine the value of the catalogue.

Discuss this article in our Music Forum.

 

John Moxey

Songstuff Site Crew

 

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