Join Richard Stim for an in-depth discussion in this video Five rules for all music contracts, part of Music Law: Recording Management Rights and Performance Contracts.
- Here are five rules that musicians can apply to all music contracts. One, it's the people, not the paper. A contract won't protect you from a crook. This may seem obvious but I'll say it anyway. If you don't trust the other party, don't enter into a deal. Keep in mind that it's very hard to get out of a bad deal and one terrible deal can ruin a musician's career. Two, if you don't understand something in an agreement, don't sign it until you do.
You may not have the bargaining power to change it, but you should have the ability to understand it. If an explanation for a provision is not covered in this course, there are plenty of online and print resources, including attorney referral services that can provide back up. Three, pay attention to what comes in and what goes out. Music, like every business, is built on margins. That is the difference between what comes in and what goes out.
Don't focus only on the numbers coming in, how big the advance, how big the royalty numbers, how large the gate from the gig. Deductions and costs, which may eliminate any profits, are sometimes overlooked when negotiating. Four, get as big an advance as possible, hang on to what you can, and don't be afraid to ask for more. It usually doesn't hurt. Many people chip away at an artist ownership of songs and recordings.
Try to retain as much ownership and control of copyrights as possible and if you must give up some rights, avoid giving them up to someone without any track record. Five, you can't always get what you want but, a musician who doesn't have a superior bargaining position should focus on getting one or two important changes in an agreement and accept the fact that the rest of the terms may not be ideal. For example, a musician might concentrate on issues like how long the agreement will last, or when rights will be recovered, and not dwell on less important issues such as piracy deductions or video royalties.
Remember, all contract negotiations boil down to two issues, revenue and risk. So focus only on the most important ways to increase your revenue and lower your risk.
For example, when it comes to record contracts, it's important to know how advances and royalties work, how to maintain creative control, and what happens when a member leaves a band. Rich also tackles management contracts, describing what managers can do for you—and what to do when you need to let them go. Next, he explores the basic terms, riders, and payment options in performance contracts. Then learn about releases, artwork permissions, publishing and producer agreements, and other types of legal arrangements. Rich wraps up the course with a discussion of oral agreements, attorney fees and roles, and five basic rules worth remembering for every music contract.
DISCLAIMER: This course is taught by an attorney (or other instructor) and addresses US law concepts that may not apply in all countries. Neither LinkedIn (including Lynda.com) nor the instructor represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate information to help viewers understand the basics of the topic presented. The views (and legal interpretations) presented in this course do not necessarily represent the views of LinkedIn or Lynda.com.
- Why bother with a contract?
- Understanding terms, options, royalties, and deductions
- Making provisions for marketing
- Including warranties and indemnity clauses
- Hiring a manager
- Understanding performance contracts
- Getting permission to use samples
- Creating a band partnership
- Record keeping
- Going through mediation or arbitration