The Ultimate Prize, a Record Deal!

Well I’ve been dancing around this topic since I started the blog 5 months ago. I haven’t written this blog for some unknown reason. It is certainly not due to lack of interest from you all. The emails and votes for a blog on a record deal have been relentless.  So now I will give in and outline the inner details of doing a deal with the devil.

Through the decades I have managed quite a few bands. Every one of them has lusted after a recording contract. After the first few contracts I developed the habit of telling all of these starry-eyed children that getting signed to a recording contract was the worst possible fate. All of them laughed. All of them ignored me. Did this bother me? No, it was just me covering my moral ass. If I hadn’t said this, with what I know about recording contracts, then I would have been guilty indeed. All of the musicians I represented got what they wished for. all of them regretted it in one way or another.  It some cases it destroyed them and ruined the band. Oh well, I warned them. Now I will warn you.. [Bad Brains -Pay to cum]

Listen carefully. You do not need a record deal. You do not want a recording contract. You will be make a big mistake if you sign a recording contract. Are there exceptions to this? Yes, of course. If by some strange twist of the time space continuum you, the reader are a guy named Elvis and the guy giving you advice goes by the name of Col. Parker then ignore me. If your name is Jimi, you play a lefty strat, and the most important fact it is june 1966 in your world then go right ahead and sign anything anyone offers as long as it comes with a cash advance that is available now.  For all of the rest of you….DO NOT SIGN A MAJOR LABEL RECORDING CONTRACT!!! Is that clear?  [The Who -Dr. Jimmy]

Now I know you will all ignore me. So be it.  If you are being offered a major label deal then it is extremely important to keep in mind that any major label deal is ridiculously complex. YOU MUST HAVE A REAL LAWYER INVOLVED! That means that your uncle Taco is out of the deal. Further you should have a professional manager involved and you should be taking his advice. If you do not have a manger then contact me and I will pass along some contacts or tell you what my consulting fee would be. (I can hear the wheels turning in the minds of many of my readers. Do not attempt to fake a deal in order to get an email full of names from me. It won’t work. The first thing I will do is contact the label and confirm the basic situation. Sorry, I applaud your creative thinking though) The advice I just offered is deadly serious. If you sign a contract without the advice of a real, experienced lawyer then you will get fucked. If you don’t believe me then think about it this way. If you are offered a deal and it is negotiated by a real lawyer and a real manager you will get fucked. With this is mind what will happen to you without their advice? You will get screwed so bad that someone else will end up owning everything including the band dog, the band groupies and that beat up piece of shit guitar that you keep around because you learned to play on it.  Enough said.

Now I am not going to explain how to negotiate a recording contract, that will take a few blogs and I hope to get to that soon. Before we approach that topic I must explain how a recording contract works. For those of you taking prescription antidepressants now would be a good time to check that you have dosed yourself.

OK let’s go.  Let’s assume that a major label wants to sign you. How does something like this happen, in real terms, how does it go down?         [Bowie TVC15]

To reach this stage you will have done all the preliminaries, showcases, meetings, presspacks sent and read, managers and label dudes (and dudettes) making endless calls, rumors, fistfights, depression, elation…so now what happens?

Generally the label starts by issuing a “deal memo”. This is a letter that they send to your lawyer and manager. It is one page and it is a summary of the deal that they are about to offer. IT IS NOT A CONTRACT. It outlines the basics of the deal. That is to say it outlines the basics of the deal they would love you to sign since you haven’t negotiated with them yet. It will tell you how big the advance they will give you for the first few records. It will tell you the total length of the contract and it will outline their offer for your publishing. If they are not attempting to buy your songs then it will address how they plan to pay for the use of your songs on the records.

Your lawyer will turn this offer down and  begin to negotiate with the label.  Every young band will panic at this point and attempt to override their lawyer management team and sign the deal as first offered.  They don’t want the label to change its mind. The band has been hoping and fighting for a deal for so long they talk themselves into believing that negotiating the deal is risky and may drive off the label. Actually the opposite is true. The label expects to negotiate. It is their favorite part of the process. If the band doesn’t try to sell itself high then the label can become doubtful. If the band doesn’t know in its heart that it is the greatest band on earth then how will the fans believe it? Taking a label’s first offer is a sure-fire way to speed up the process of the label losing faith in the band.

So you negotiate with the label and finally come to an agreement. At this point the label sends multiple copies of the 60 page contract. The band sits down and signs them all in multiple places. NOW YOU ARE SIGNED. What does a deal like this say? [Velvet Underground “White Light, White Heat”]

Every record company contract is different. Every deal is different but there are many things that are common to all the deals. These are the things that count. So I will explain them in as basic a fashion as I can.  If you understand the basics of how deals like this work then you will be prepared to open your mouth in a meeting and maybe get what you want or need in a deal. This applies to both big label deals and small label deals.

Every recording contract is designed to lock the band into only recording for the label.  As a result the deal will be split into two halves, the first covering what the band must do, can do and cannot do when it comes to recording. The second half will cover how the band gets paid for its services as recording artists. In addition there may be a third section covering specific commitments to promote the records and to provide tour support.  Finally the contract may cover song publishing and include a complete publishing contract. I will not cover the details of publishing in tonight’s blog. You can check out some of what is involved in my two blogs about publishing royalties. [Yes -Close to the Edge]

Part one the section that covers how long the band is bound to the contract is always structured as a series of options.  What the hell does that mean? Well it isn’t like choosing one item from column A and two from Column B at the chinese take out. (if you have no experience with chinese take out then you are either  an underage hippie kid living at a remote commune, playing a hemp guitar, or not a musician)

The options in a recording contract work like this – the band must make the first record for the label. The label can take a god awful long time putting it out. You must wait. Once they release the recordings the clock starts to tick on the band’s option. Let’s say that it’s a one year option. This means that within one year of the album’s release the label must tell you if they would like another record from you. It is the label’s option not the band’s. It is NEVER the band’s option. [Jackson Five -I want you back] If they say that they would like to “excercise the next option” then the band makes another album.  Most major label record deals have TEN options. In practical terms this means the band is committed to the record label for up to 15 years. (California has restrictions on deals that are this burdensome so most labels use NY law to get around this anti-slavery law)

Often bands will talk about getting “three records guaranteed”. This means that the label commits to exercising the first two options after the first release. In practical terms this is never true. The label can usually get out of the options by paying off a penalty. [Iggy Pop- The Passenger] If the label decides it doesn’t want to release any more records from a band, any band, they will stubbornly stick to their guns.  Even though the band may have language in their deal that states that the label must do it in practical terms this will not make them release the record. They will pay the penalties, no matter how large, and move on. Even a sizable non-release penalty payment is cheaper than releasing a full-scale release. When you add in the fact that an unwanted release would require lots of staff time, time that could be spent on a record the label is excited about, then you can start to see why they do this.

So a contract that guarantees three albums will be released doesn’t mean three albums will be released. What does it mean? Well it shows that the label was enthusiastic enough when they signed the deal to commit serious money to the project of developing the band.  So deals like this primarily measure how committed and excited the label was about the band during the negotiation process and little more. All bands and all labels rise and fall in their enthusiasm and this affects the way albums are promoted.

Now we’ve established that the contract revolves around options and that options are set to certain time periods and all of this is nailed down to the concept of  a “record”. This concept is certainly being tested in the modern market. Bands no longer go into the studio and put together a 10 song, 34 minute vinyl LP (the standard from 1967 ’til 1987) nor do bands go into the studio and put together a 12-14 song , 45 minute Compact disc (the standard from 1987 ’til 2003). I think we can also rule out the old school idea that bands go into a studio and cut two tracks which are turned into a single [Mission of Burma “Academy Fight Song”]

The current environment is one of changing standards where bands are releasing individual tracks as downloads, collections of varying lengths in every format they can concoct and in the near future streaming the live creation of recorded music through peer to peer networks. [Bad Brains “Banned in DC”]

Despite the state of chaos and the coming changes labels seem to be sticking to locking a band’s output into the concept of albums and collections of songs. [Deep Purple “Pictures of Home”]. No matter how a contract is structured all of the band’s recorded output will be controlled by the label for the during of the contract. If a contract did not accomplish this there would be no reason for the label to enter into the deal.  In short the band will only record for the label and every single note put to tape during the contract will be owned by the label.

In this section of the deal the contract will also cover who controls the different aspects of creativity. Here’s a short list of things that will be covered.

1. Who’s songs are going to be recorded?  Are there going to be any Bob Dylan songs? Is a ghost songwriter going to be employed? Can the label force songs on the band? Often the label will require the band to submit demos and then the label will pick out the tracks to be recorded. Sometimes the selection will be by mutual agreement. When the deal is structured in this manner the band will discover that it is very hard to win an argument on song selection with the label.

[Bob Marley “Crisis”]

2. Who will produce the recordings? Here is another case where the label will demand complete control. For all bands without a hit the label will use the producer to control the band and micromanage the band’s recordings. Once again if the band gets the label to agree to a situation where the producer is agreed by both sides then the band will have a great deal of trouble over ruling the label. [Love “Live and Let Live”] In many cases a band will attempt to be self producing. That is to say they want to make their own records and do their own tracking, mixing and editing with the help of a buddy who is an engineer. This kind of provision is very hard to get from a label for the simple reason that all major labels know that this is an extremely bad idea for any new band. The label knows that the band has no experience creating a record that will compete sonically on the radio. If the band makes this point a do or die point of negotiation the label will act as if they are giving in and just demand more flexibility to remix. Then under the cover of darkness they will “remix” the record by tearing it to pieces and producing the product they wanted all along. [Rolliing Stones “Sympathy for the Devil”]

3. The budgets for recording of each optional record. The language that covers the recording budgets will name maximums that the label is willing to put up for recording. They will often include language that allows the label to exceed these numbers but only with the written permission of the label.

4. The budget for the total amount of money to be advanced to the band. This will be a large sum which will include many smaller sums like recording budget, tour support, personal advances to band members, allowances for gear purchases etc. [Santana “Black Magic Woman”]

5 Budgets and maximum allowances of money to pay producers. Once again these sums will be controlled solely by the label. In general the producer will be paid an advance payment which will be part of the money that he will earn when the record sells. THIS MONEY AND THE ROYALTY POINTS COMES OUT OF THE BAND’S SHARE!

6. Allowances and advances set aside for the band’s manager. This amount is usually negotiated by the manager as he works out the deal. This is a blatant conflict of interest on the part of the manager and is, as a result, standard practice in the music business.

There are other items that are often included in the first section of a recording contract. I’m certain I am forgetting a few but it doesn’t really matter. What is extremely important to understand is that the number of options, the guarantee of options, the total contract length will all determine how long you may be locked into a label.

When a label is courting a band they will be the most charming, supportive, understanding, coolest people who you have ever met. This view will change once you begin to work with the label to create your first album. I promise that any label will be much less attractive once the deal is over. Always keep this in mind.

 Without exception the area of the contract that covers options and budgets is the part that gets a band licking their greasy chops. It is very easy for these numbers to add up to over a million of the first option.  This is what lures the band in and gets them to sign.

Now here is the fact that puts all of this in the proper perspective. Everything that is done to create, manufacture and promote the record, everything that is done to pay off the business, all of the advertising, all of the advances , all of the tour support, all of the gear allowances, all of the catered food and press events, all of the plane tickets given to writers, all of the cash put up to print up t shirts, everything in every possible way that is paid for by the label ultimately comes out of the band’s cut of money. Go back and read that again. What does this mean? EVERYTHING DONE TO MAKE THE RECORD AND PROMOTE IT IS PAID FOR BY THE BAND OUT OF THEIR ROYALTIES!!!

Think about this fact. It the fundamental truth about record deals. The band pays for everything out of the royalties that the band MIGHT receive.  As a result of this the way a recording contract is structured the average musician in a successful band will not only make no money from making records they will spend years OWING THE LABEL MONEY!!!

[Gran Funk “I’m your captain”]

I will explain how this works in the next installment when I cover royalty payments.  Let me close by saying that it often works out like this :

Producer $50,000

Recording Studio $200,000

Engineers $75,000

Manager  $140,000

Each crew member $12,000

remix engineer $40,000

Mastering studio $20,000

Band member $7500 and a new guitar, amp and a few pedals

Ask yourself do you want to give the best you’ve got to give, perhaps the best you will ever give since you are in your prime, in return for $7500, a new guitar and amp and a year’s worth of crappy catered food as you make an album?

[Gang of Four “Anthrax]

©Brad Morrison/Billiken Media 2010

22 thoughts on “The Ultimate Prize, a Record Deal!

  1. Hello

    This is a great blog Brad, glad I came across it. There are a couple of questions I hope you may be able to help me with regarding contracts

    I’m from the UK so I guess the law may differ, but contract principles may be similar.
    Im also a new artist/producer and an indie label owner currently in the process making sense of recording agreements.

    There are a couple of questions I hope you can answer below.

    Is it industry standard for a label to keep an artists sound recording rights of a song/single permanently?, also does this mean the artist cannot re-record the single (that they recorded for said label ) for another label?

    Are record labels supposed to continue paying record sales royalties (and mechanical royalties) to an artist if they have recorded a single for them, even when the term of the contract is over or is this just for the term of the contract while artist is signed to label?

    How do these rules apply to licensing agreements?

    I would be most grateful if you could offer some advice on this.

    Cheers

    Bobby

    • Hi Bobby,
      I have some experience with UK music contracts. I managed two UK acts, one of them for ten years. There are many similarities in the laws of the UK and the USA since US law historically comes from the English system. French law on the other hand……I digress.
      On your first question, yes it is traditional for labels to hold on to the band’s material forever. In essence that is what a recording contract is all about. Otherwise you would be Licensing the material for a set period of time. With a license the band usually has the material ready and the label just works out a contract for 5years, 10 years etc. The usual arrangement for a recording contract is for the label to pay for the recordings and as a result own the material “in perpetuity” that is to say forever. This doesn’t mean that you must do it that way. Certainly there is much room for generousity in the world of music. Always remember that the musician must trust you to sign a deal with you. This can be a difficult thing to achieve with a talented person. There is a long history of talented people getting screwed.

      The second half of the question, does the band have the right to rerecord the single. The answer is NO! absolutely not. If they had that right you wouldn’t have anything of value when you paid for them to record it the first time.

      The next question “does the label continue to pay?” Yes, of course the label continues to pay. If you own it forever you pay forever. This is only fair. Any contract that includes ownership of a recording might be thrown out by a court if you retained ownership and did not continue to pay a reasonable royalty. The most common outcome of a recording contract is that you make a recording and release it. It sells some but then stops selling. Eventually the band members move on and do other things. In this case you don’t worry about paying them since the record no longer sells. Most contracts have a clause that says if the band is owed less than $25 in any given royalty period no payment is made until they are owed at least this amount. If, on the other hand, the record is a hit and sells then everyone involved will be interested in continuing to keep the music available as new formats appear and payments will go on and on.

      I released an EP for the band Miracle LEgion in 1983. I just made arrangements for it to appear on Itunes. It will be selling again and I will pay the musicians their royalties, as I have always done……that’s the way it works………………….

  2. Hi Brad

    Many Thanks for your advice, its made some things a lot clearer now. You don’t mind if I pick your brain a little more do you? – apologies if these questions are kind of moronic,just got to be sure about things!

    This is an example of a restriction clause in an indie record contract I came acfross (although seems like a licensing contract clause) , is this 5 years a reference to how long after contract term that artist cannot re-record song elsewhere?

    Restriction

    5.1 The Artiste undertakes and agrees with the Company that the Artiste will not:-

    5.1.2 ‘For a period of five (5) years immediately following the expiry of the Term (that date five years from the expiry of the Term being referred to as the ‘Restriction Date’) perform any musical composition recorded by the Artiste’

    And lastly re: licensing contracts – Everytime an artists single gets licensed is a label meant give them a cut of the upfront fee you get? (even when contract term is over and artist may be signed to another label)

    As earlier discussed I presume artist is always entitled to a % of future record sales and mechanical royalties?

    Thanks in advance

    Bobby

    • Hi Bobby,
      No, these aren’t stupid questions… far from it. It takes a long time to get a handle on the details of running a label. I learned it the hard way. I paid lawyers large sums to explain it to me.

      The clause you quote seems to ban the artiste from performing the song. That would mean live performance. This may actually not be the case since the definitions may redefine the word as something else, like recording the song. It is impossible to give you a real answer without seeing the whole document.

      As for relicensing an artist’s single I have seen contracts written both ways. In general any advances that a label receives the artist gets a cut. Finally you mention mechanical royalties. Mechanicals are part of publishing. They are seperate from artist royalties. I suggest that you read my blog about publishing deals.

      In general, and you should keep this in mind, the artist gets paid forever for the material he records. It doesn’t matter if he is signed to another label, if his music sells he gets paid………………..

      • Thanks for finding the time to offer your advice Brad, its been real useful. I’ll check out that publishing blog and look forward to future blogs from you.

        • Thanks for the kind words. I haven’t written any major posts this summer since I have been working on another writing project that has taken up all my time. I expect to be back writing full length posts in a few weeks. In the interim there is over a hundred thousand words of advise already posted. You’ll have to make do with that…………….

  3. Hey Brad. I have a question about Independent labels. Our old highschool teacher knows a label named “Team Love” based in New York. We gave him our press kit so he could get it into the source. Recently, our teacher told us that the label was being hesitant in working with us because were somewhat young. (all 18) So even if we got the whole parental consent thing and we DO work with them, they don’t have a contract. Our teacher’s band is already on their label and he has YET to sign a contract. Do you think this is a bad thing? I know this means the label won’t be 100% reliable, but does it mean we can still get some promotion through them? I would like to see what you have to say about this. Or how you think these kinds of labels work.
    -Luis

    • Luis,
      That is a very interesting question. I’m hoping that you’ll be surprised by my answer. With the info you have given me I would suggest that you do it. Go ahead, make a record for them and let them put it out. If you don’t have a contract with them, make the record and THEN COPYRIGHT IT YOURSELF. You can do this by going to the National Copyright office website, downloading the forms, filling them out (copyright the whole album as a “body of work” that saves you money) and mailing them in with a money order for $35. (I think) I’m sure that there are a few lawyers out there that are spitting mad reading this but I don’t care.

      Tell the label “great put it out! we love you! we wanna tour!” etc. also make sure you say “remember we own this record!” and “remember we OWN THE COPYRIGHT TO THE MASTERS!” If the record takes off and starts to sell then you have a good problem. How to get paid. You should discuss this up front with the label. Work something out that everyone agrees to verbally. If the record does start to sell then you are going to hire a lawyer and he is going to eat them for lunch. He will force them to sign a contract that favors you and gives them no power. This label may think they are very clever. They aren’t. The reason big labels start out forcing you to sign a contract is to take advantage of the band when the band is at their weakest. Once a band’s record starts to sell the label losses all its leverage.

      Look at it this way –what have you got to lose? You’re 18, no one knows about you, and you have no records out. Put out the record and you have moved forward. It’s that simple. I am not sure why the label acts this way. I have seen small garage rock labels operate this way. They often don’t care about trying to be a big label. They just want to put out music, make a little scratch and be the coolest people in their town. Either way if they put out your record, copyright the master tape and let them do it. I doubt you will ever regret it. (Oh yeah, sign up for BMI and register the songs publishing. I have a blog that covers most of that………….)

      • Awesome! Sounds like it would be our benefit in the end. Hey I also came across this (http://getoutofthegarage.sonicbids.com/). It’s a one song competition to win a bunch of things, but I noticed in the official rules that the sponsor takes over the song’s publishing rights. Does this mean they will own the song for the range of time they specify? Is it a good Idea? Is it worth it? Once again thank you so much for all your advice, it makes me see the ‘common’ sense of things and I really need that since I’m still a fish in a small pond.

        • Yes it sounds like the contest is a scam. The publishing rights is where all the money piles up. Yet another scammer trying to make money off of musicians. I spent my whole career dealing with people like that. Always remember that you have to manage your own interests. No one else will do that for you…………….

  4. Hi, Brad. My name is Freddy, I am the lead of my band.
    I have been reading you blog for some time, but I have been saving the questions for when my band hit it’s next step. I will give you a quick rundown.

    We have been playing for a little over a year, everyone in our town knows who we are, and we recently won a battle of the bands along with recording time. We have had an unmixed, unmastered, and flat demo out for about a year now, and it is also online. we did not copyright our songs, and we have not trademarked our name.

    Our current situation is that the establishment in which we won our recording time from also runs a label. it is not a “major” label, but he has connections, and he has experience. he seems very nice, and fair, however that is his job…he has listened to our demo and threw around some things like “I really dig this”, “we may want to sign you”, “if we sign you”, etc…

    based on your previous Q & A I would assume that you think we should copyright our music before we negotiate anything, but my question is this:
    Do you think that by having our music online for a year would suffice as a safe way for us to own copyrights, and if not then how does “body of work” actually work?
    If we copyright a bundle of songs as a “body of work” will it be void if we decided to release the album with more or less songs? or do we own copyrights of each individual song regardless of packaging. also will a demo version of our album be enough to own copyrights?

    lastly, should we trademark our name? I have heard that this particular label has owned their previous bands to the point where they have fired members of the band. The owner of the label actually explained that it was because people were not “working hard enough”, but I’ll be damned if someone fires me from my own band.

    Sorry for the length, but these are questions that I have been sitting on for some time.

    Freddy

    • Hello Freddy,
      Don’t apologize for asking lengthy questions. If you want to be a rock star get in the habit of not apologizing except quietly in private. So to address your question. Let me cut it down to chunks.
      First if you copyright your material as a body of work then it is protected. IF anyone rips part of it or the whole damn thing it is still copyright infringement. Look at it this way – do you think you could get away with stealing a chorus from a Beatles song? Why not? It’s only a small part of it? Get the point?
      Registering your stuff with the US copyright office is only part of the process. Remember that in the USA when you create something, that act, that process is what creates the copyright. Registering it is one form of evidence that you were the creator. Using the material commerically is another. Having lyrics in your spiral notebook is further evidence. Mentioning it to your girlfriend is another. If it ends up in COURT all of these things add to your argument that you created it. Registering the song doesn’t automatically give you the rights to the song. Look at it from another angle. Let’s say you write a song “I wanna hold your foot”. You teach it to your band. Sometime after this the bass player quits and a new guy joins the band. He’s in the band for a month and then you have a fight with him and he leaves. He’s pissed so he sends in the copyright forms to the US goverment on “I wanna hold your foot”. Does he own the song? NO! You sue his ass and the court looks at the evidence and decides that he is scum. (like many temporary bass players)

      Should you trademark your band name. Yes, it’s a good idea but a real trademark filing is difficult to do without a lawyer and as a result is expensive.
      The more interesting question that your comment brings up is what to do with the new label? It sounds as if they are going to sign you. This will involve a contract. That document can put all kinds of problems in your life. On the other hand the label may be one of the steps to the top.

      A good rule of thumb to use when managing your career and decide about labels and such is to stick with the “there is no reason to wait” rule. Don’t wait. Take the opportunities that present themselves and when none are to be found set about creating opportunity. This label wants to sign you, great. Sign the deal. Try to grow bigger. Push hard. Make friends and contacts. Keep pushing. Play shows. Play tours. Record. Release it. Rerelease it. License it. Write more songs. Keep cranking it out.

      I have watched more careers rot as people wait for the perfect deal to come along. It never does. Most bands get together, practice and NEVER EVEN GIG!!! Imagine that. My doctor, medical doctor that is, is a drummer. He has been playing since he was 8. He is currently part of a Rush cover band. He’s about 50. HE HAS NEVER PLAYED A GIG! He is still waiting.

      Winning the battle of the bands thing is great. Make the recording. Whenever you sign ANYTHING find a lawyer to give you some advice. Every deal that you sign will bind you in some way and screw you in some ways. Get used to it. Argue over the terms. Fight for what is right but sign it. Protect your publishing rights like a pit bull but don’t drive away the deal. If this label is signing you find out who there biggest competitor is and get in contact with them. (quietly) Use one deal to create two competing deals.

      Good luck. Ask more questions…………………..

  5. Thank you, great advice using two deals to compete.
    I have a question that has spawned from your response. In some of your old posts you mentioned that some labels will sign you with a one year, or one album deal. In some cases you have stated that it could be different…in this case, if this label decides that they want to offer us more than one year or one album, would you urge us to talk them down to a shorter term?
    Also on the subject of trademarking our name. Is this opposite of copyrighting in the sense that they could trademark our name regardless of whether or not we have our logo slapped in the middle of our faces on a bunch of music sites?
    I appreciate your time, and I will hold out until we make some progress before I lay more questions on you.

    Freddy

    • Freddy,
      When I mentioned that labels will usually sign you for one term or one record that does not necessarily mean one calendar year. Usually they sign you for one record WITH THE OPTION FOR MANY MORE. Reread the post. Traditionally bands want the label to commit to more than one record since this means the band is guaranteed more than one release. In your case wait to see what they offer. Then write in for concrete advice when you have the deal details to look at.

      On the second question Trademarks are different than copyrights. A trademark is literally that, a mark or symbol that you use to conduct trade. This is the band name like “The Slugs”. You use this trade name to do business. A copyright is a type of protection that you place on the work that you turn out……. Good Luck…………..

      • Hello again, Brad!
        I am back with details in hand! Today we had a meeting with said indy label and we were offered a deal with them. Luckily it is only 4 pages long, So at least we don’t have to try and dig to find something bad. The terms seem to be fair to me, but his explanations of the terms, and what was on paper seemed to be a little different.

        One of his terms is outlined in the “Cost” section.
        He explained to us that he would be opening his doors to us, allowing us to be in the studio up to 16 hours a month to record, mix, master, practice, etc…now the part that seems to be off to the people around me is that in the contract it says the cost of the production of the album would be 50% company 50% artist, but I told him that we really aren’t in the position to actually cover 50% of the production. The contract states that he will complete the project within 6 months with a 300 hour maximum on the album. so after I mentioned this he stated that he didn’t expect us to pay 50% of the cost, but what he would like us to do is pay a “maintenance fee” which would consist of a monthly fee of about $200 just to have something come back to him, and also to give us incentive to actually put in effort.

        is this a good or a bad thing? I can see his point of view, but I am curious to see what you think.

        Freddy

        • Freddy,
          Good thing you actually read it before you signed it huh? That is rare with bands. In short you caught him with his pants down. It’s ok though. This kind of small time skullduggery is pretty standard with small labels. The guy if trying to figure out a way to make the studio pay while developing bands. He has run into the most fundamental problem with musicians, they are all broke. Ok let me continue, 300 hours is 200 more than you need. Also 6 times 16 hours a month makes no sense. Get this stuff straight. If he tells you that he doesn’t expect you to pay the 50% then he should be happy to take it out of the contract. It is one thing to have the studio time recouped from the sales, that’s standard but if the band pays then the band owns the tapes. The story on the $200 is total bullshit, not very clever bullshit, just standard bullshit. Let me put it this way, you can send ME $200 every month, then record a record and I will own it. Sounds cool for me and I don’t even want to hear it.
          Let me be clear here. Don’t scare this guy off just negotiate with him. This what you are after – either you pay for the sessions and then you own it and license it to him for a set time with a clause allowing you to get out if the label does nothing. (almost all labels do nothing) OR he pays for it and owns it. Turn it around on him. Tell him that you want to add things into the contract to give HIM and incentive to sell records. Also does the contract say anything about mech royalties (see my blog on that subject)? Who pays them , him? God? Your mom?

          I signed PHISH on a 50/50 deal. They brought the masters, I gave them national distribution, promotions, and some cash. They took the same attitude with Electra and were one of the only bands in history to own their own masters. On the other side of the coin, Hendrix signed every deal offered to him. He didn’t care what it said, only if there was cash available immediately. As a result when he died about 11 people thought they owned his catalog.
          Keep talking to him and ask more questions. Good luck. Remember you are a rock star…………………….

          • Well I’m not sure if we caught him with his pants down, or if he just thinks we’re willing to sign a contract that says something different than what he’s saying. Basically we went through the contract line by line and talked about the terms. actually now that I think of it, we video recorded the whole meeting (with his consent), so I can just look back and see exactly what was said, and what is on paper.

            But on the previous subject, instead of paying him a monthly “maintenance fee”, you think that we should tell him that if we are paying, then we should own all of the rights after our term is up?

            Right now the way he wants to work out the copyright is, he wants to own the mechanical royalty, and we own the Artistic royalty and we would also own 100% of performance royalties. so he’s saying it’s 50/50 for the sales.
            as for the merch, on the cost end it still states “company’s production, promotion, manufacturing and all other bonafide expenses relating to artist are deemed recoupable from revenue from units sold.”

            I scanned the contract and I would be more than happy to send it to you, now I’m wondering what else needs to be negotiated.

            The fact is that we don’t have any lawyers in the entertainment field anywhere near us, so it’s going to be tough for us to find someone who can really hit the nail on the head.

            We plan to meet with him again within a week.

            Freddy

            • Freddy,
              No lawyers near you? I’m amazed! Do you live on the moon? It is easy enough to have a NY or LA lawyer look at the deal. It just takes money. If you like I could send you a name or two. It would cost you between $500 and $1500 to get a real professional opinion. It would cost about 20,000 to have good lawyer do the negotiation for you. I don’t think you need that but a good solid read would be a big help. As for sending me the deal, last time I checked I wasn’t representing you. That being said I will send you a private email on that topic.

              As you add more details the deal is starting to look a little more evil. When you say he wants the mechanical royalty I assume that you mean the mechanical publishing royalty. If that is true that is a big no no. His label should be PAYING the mechanical to you, the writer. This should be normal. As a matter of fact it is the law. He can write a contract that contravenes this little incovienance but the law says that anyone that uses a song, in this case as part of a copyrighted recording, must pay a royalty to the writer (s). When you say that you own the artistic royalty I am unsure what, exactly, that means. It sounds like the contract is an attempt to capture the bands publishing. This is classic scam that many bands have fallen for over the years.

              So far you haven’t mentioned the term, or future recordings. Could you please clarify that so I can get a better perspective? All of this back and forth may be a bit tedious but I suspect that some of my readers will gain some insight as we hash it out. Evey deal is different and small label deals are often the most dangerous to a band that goes on to fame and fortune. Remember that whatever you sign will likely be unheld in court if challenged. Of course, there are even exceptions to that truism. Keep asking and watch your back………..
              Brad

  6. Talking back and forth isn’t a bother at all, it gives me a much needed, and much different perspective on this whole thing. I think I came off as even LESS knowledgeable than I thought I did in my last post. We DO have lawyers in our town, I was just under the impression that we needed a lawyer who specializes in entertainment. Either way, we’ve established that you know a couple of names who would be able to help for a price.

    To give you more insight I will answer the questions that you had.
    originally he offered to sign us on for 18 months, he thought that 12 months wasn’t enough time, and what if he got us to a certain point and we left him before he could regain his investments. At the most recent meeting he went on to say that he would like to finish up the current album, and then finish a second album with us. He also stated that he felt that the 18 months wouldn’t be enough in this case, and that 24 months would be a better time frame to work with the 2 albums.
    Now that I am explaining this to you, it makes me feel more like he’s trying to get the rights to as much music as he can, while he can.

    So my question to you is this…If we were to pay a lawyer somewhere between $500-$1500 to get a good opinion, do you think it would even be worth it? Does this guy sound like someone who would negotiate a contract that is in our favor?

    I want to at least weigh the pro’s and see if those are worth spending the money.
    1 or 2 finished albums. promotion, advertisement, merch, gigs, 50% of royalties, his computers for video/picture editing software, and practice space.

    Now all of those things sound great, but not if he’s screwing us in the process.
    You have more than likely dealt with someone exactly like this guy before, and if you have, was there something to get out of him? or is he just in it for himself?

    P.S.
    I’ve talked this over with one of my bandmates, and he has the idea to contact the last band who was signed on this label. needless to say, the last band on his label is not with him anymore, but we’ve only heard the producers side of the story.

    Freddy

    • Freddy,
      Yes, if you get a lawyer you will want someone that does entertainment law. As for the ever growing term of the contract this is typical shysterism. Let me make this as clear as I can. This guy is in it for himself. That is normal. There is nothing wrong with him being in it for himself. That is the way all business is conducted. The trick is to limit your contract so that it covers YOUR MUTUAL INTEREST. Yes there are some positives with signing with the guy. The question is how much do you give up. If you give up the publishing rights to the songs on your first record that could be a major commitment. Nirvana signed with Subpop and they still own their early EPs. The sales of those EP’s built the label into a large enterprise and launch many other bands. In return Subpop, which was a cool label with tons of contacts (including me) were the key to launching the Seattle Sound which later came to be called grunge. The Seattle sound wasn’t that new. I managed one of the first Punk rockers from Seattle and that was way back in 1980. You could argue he added as much to the sound as Kurt Cobain did. You could also argue that Nirvana was a complete rip off of the Pixies. But the point here is that Subpop took the band, the sound and the songs and brought it coolness and underground cred. They then brought them to the majors and the rest is history. (by the way Courtney is as nasty as everyone says….nasty is as nasty does) No matter what this label and this guy does it won’t work without great songs and an absolute commitment to doing what it takes to get noticed.
      Finally the bandmate that wants to contact the other band has common sense. Listen to him and do the research……….
      Brad

  7. I’m 15 and I’ve always had a dream about being in a band and touring and making tons of money. But recently now that I’ve been reading about getting signed, everything I read pretty much says if you sign that contract, then your SOL. What would a contract have to include for it to be favorable to the band and let them profit instead of going bankrupt.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s