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SONGWRITER DEALS: Part IV, By Donald S. Passman

Songwriter101.com is pleased to be able to offer excerpts from Donald S. Passman’s “All You Need To Know About The Music Business,” widely acknowledged as a “must read” for anyone thinking about starting a career in the music business.

Posted in Songwriter 101 on February 7, 2005

COLLABORATION (TWO OR MORE SONGWRITERS)
One provision that needs special care and feeding is the one that concerns your writing with other people (people you write with are called collaborators).

Most of the older term songwriter agreements, and a good number of the ones currently used, take the strong position that the publisher gets 100% of the copyright and publishing (meaning both your share and the collaborator’s share) of compositions you write with other writers. This is virtually impossible for you to do. It requires you to deliver rights from somebody you have no control over, and who may not want to be delivered. Even worse, it may be someone you can’t deliver because they already gave these rights to another publisher. In fact, if your collaborator has this same requirement in their term deal, they are obligated to deliver 100% of the composition (including your share) to their publisher.

Obviously two people can’t each own 100% of the same horse. So as a practical matter, this gets worked out between the two publishers, usually by splitting the copyright and administration between them (see page 262). Sometimes, if there are going to be a number of songs written by the same two people, the publishers alternate administration rights. In other words, one publisher gets administration of the first song, the other publisher gets to administer the second, and so forth. But since neither one wants to draw a turkey when the other gets a hit, the more common solution is to split ‘em all.

Many of the new forms take a compromise position, requiring you to deliver no less than 25% of the song to your publisher. That works fine if you’ve written 25% or more of the composition, but it’s not so hot if you’ve written less than 25%. In that situation, your publisher takes part of your writer’s royalties to make up the difference in income between the publishing they actually get and 25%. For example, if you wrote 12.5% of a song and delivered 12.5% of the publishing to your publisher, your publisher would take all of your songwriter royalties. This is because 12.5% of the publishing, plus your entire 12.5% of the songwriting royalties, equals the same dollars the publisher would get if it had 25% of publishing at the outset.

This is easier to see using money: For every dollar received, 50 belongs to songwriters (the songwriter’s share) and the remaining 50 belongs to the publishers (the publisher’s share). Since your publisher has only 12.5% of the 50 publisher’s share, it only gets 6’/. Your 12.5% of the writer’s 50 is of course also 6%. However, the contract says your publisher must get at least 25% of the publishing (which equals 25% of the entire 50 publisher’s share, or 12’/). Since it only has 6Y44$ (12.5% of the publisher’s 50 share), the publisher takes all of your writer’s share (which is also 6Y), to equal the 12’M (25% of the publisher’s 50 share) that you promised. This means you will make little (or nothing, in this example) for your collaborative efforts. Such a situation does not make for a healthy career, and it certainly turns you off collaborating.

Because of all this, the most you should do is agree to deliver that percentage of publishing that equals your percentage of the writer’s share. In other words, if you write 10% of a song, you should only agree to deliver 10% of the publishing; if you write one fifth, 20% of the publishing, etc.

How Are Songs Divided?
Historically, 50% of a song went to the writer of the music, and 50% to the lyricist. No muss, no fuss. So if one person wrote all of the melody, and one person wrote all the lyrics, they each got 50% of the song. If two people equally wrote the lyrics, and one person wrote the melody, then the lyricists each got 25% of the song, and the melody writer got 50%. You get the idea.

Over the last few years, this has gotten fuzzed up considerably. The reason is that rap, hip hop, and similar music are as dependent on the track as they are on the melody and lyrics. The track is the background rhythm and instrumentation, on which the melody and lyrics are laid. So people creating the tracks are also getting pieces of songs.

Unfortunately, there are no hard and fast rules about how a track gets treated. It’s usually negotiated by the parties at the time, depending on their sense of who contributed what to the song. I’ve seen deals where the track gets one third, with the melody and lyrics each getting one third, and I’ve also seen deals where the track merely becomes part of the music/melody side of the equation. And if the track contribution is minimal, sometimes it gets little or nothing.

There’s an added twist when tracks contain samples (we’ll discuss sampling in detail later, but basically it means the track incorporates somebody else’s song along with your material). In this case, the sample owner gets a piece of the publishing, and that has to come out of someone’s share. It’s not a given that it all comes out of the track’s share the person creating the track argues that it should come out of everybody’s earnings, on the theory that everyone benefits from the use of the sample. (The same issue comes up if the melody or lyric writer “borrows” from someone else.) Results vary in direct proportion to bargaining power.

So sit down, slug it out, and have the survivor call me.

Writing Teams
If you write with a partner on a continual basis, and your publisher is signing both of you, there are some special points of concern. (If you $7,500 deficit but also Louise’s $7,500 deficit. Thus, out of the $20,000 your song earned, you’d only get $5,000 ($20,000 less your $7,500 deficit and less your partner’s $7,500 deficit). Since you didn’t get the other $7,500 (your collaborator did), you will not be a happy camper. So separate your accounts.

Separate Obligations. Another problem with signing one agreement is that you have to be sure your obligations are separate, and that you’re not responsible for a breach by the other guy. For example, if your partner wrongfully terminates his or her agreement and walks out, you don’t want to find your royalties being used to pay for the publisher’s damages and/or legal fees in a fight with your co writer.

Separate Contracts. On the other side of the fence, suppose the publisher hands you two separate contracts. The odds are they won’t be cross collateralized (although you should always make certain they aren’t). But does that solve everything? Not really. The problem with two contracts is that, at option time, the publisher may decide to drop one of you and keep the other, effectively breaking up your team. So be careful to provide that the publisher can’t do this. If the publisher continues with one agreement, it must continue with both.

These problems are easy to fix if you ask up front, but can be an enormous pain if you forget. So don’t.

CREATIVE CONTROL

Moral Rights
In a number of countries outside the United States, there is a legal concept known as moral rights, or by the snooty term droit moral (which in French means “moral rights,” and in Czech means “no parking”). The concept is that an author can stop any mutilation of his or her work, even though they may have parted with it long ago. For example, the creator of a painting (even though it has been sold four or five times) could stop someone from cutting it into smaller paintings, drawing mustaches on it, etc. Similarly, the author of a musical work can stop substantial changes in the music or lyrics.

Contractual Approvals
The United States has never recognized a moral rights concept for music (although there is a limited one for paintings and fine art). Accordingly, to the extent you want any protection, you must put it in your songwriter/publisher contract. You do this by saying the publisher needs your approval before it can do certain things, like:

1. Make changes in the music.
The publisher will normally say that’s fine as long as they don’t have to ask about simple changes merely to conform to the mood or style of a particular artist.

2. Make changes in the English lyrics.
Again, this approval right usually excludes minor changes for mood or style.

3. Add foreign lyrics.
If you have enough clout, you may be able to approve translations. This is much harder to come by, but it’s worth fighting for because it’s also a financial issue remember, translations reduce your royalties (see page 232).

4. Make changes in the title (in English). Usually no sweat just ask for this and you’ll get it.

5. Grant synch licenses.
If you have some bargaining power, you may be able to get consent to all motion picture synchronization licenses. (These are defined on page 225). If you have a lot of bargaining power, you might also control television synch licensing, but this is much harder to get. The reason is that publishers often have to give a yes or no answer to TV studios within twenty four hours, and don’t want to lose the opportunity because you’re off sipping lemonade on your yacht. If you can’t get approval rights, a compromise is to say the song can’t be licensed for NC 17 or X rated films, or for a scene in a film involving illicit drugs, sex, violence, or anything else that rings your particular bell.

6. Use the song in commercials and print ads.
At best, you should have the right to approve any usage of your song in commercials and print ads (newspapers, magazines, etc.). (If you have approval of synch licenses, you automatically control TV commercials. But this doesn’t cover radio commercials because radio recordings aren’t made under synch licenses, as we discussed on page 225, and it doesn’t cover using your lyrics in print ads.) If you haven’t got enough clout to control commercials entirely, you can compromise by requiring your consent to certain categories, such as alcohol, tobacco, firearms, political candidates, and my personal favorite, sexual hygiene products.

REVERSION OF COPYRIGHT
Smile whenever you hear the words reversion of copyright, because this will always be good for you (unless you’re a publisher, in which case you can scowl). This is different from the termination of copyrights under the Copyright Law, which we’ll discuss later, on page 281, because reversion is a contractual provision, negotiated specifically. It means the publisher must give your song (copyright and all) back to you at some point in the future.

Conditions of Reversion
What should trigger reassignment? The best (short of the automatic reversions discussed below) is that the song reverts to you if it’s not recorded and commercially released. If you really have bargaining power, you can say you get the song back unless the recording is by a major artist (or at least on a major label) and/or achieves a certain chart position (say Top 50). Another compromise is to say you get the song back if it doesn’t achieve a certain earnings level. The higher that level, of course, the better for you, since you have a better chance of recapturing the song. However, you may have to settle for something pretty modest, such as $2,500 or so.

In these clauses, be sure to require that the recording/release must happen within some time frame. Otherwise, the publisher can keep each song for the life of copyright, telling you every week that a recording is just around the corner. If it’s a single song agreement (rather than a term deal), the publisher customarily has from six months to two years after signing within which to get the song recorded and released. Try to break this into two parts it must be recorded within six months (or twelve months) after signing the deal, and released within six months (or twelve months) after that. This is better for you, because it comes back sooner if nothing happens. For term deals, this period usually begins at the close of the deal, although songs delivered in the later years sometimes have longer time periods (because the pulbisher hasn’t had time to work them). A typical provision is two or so years after the end of the deal, but no less than two or three years from delivery of a song.

The smaller your bargaining power, the less likely you’ll be able to pull off a reversion. However, even at the most modest levels, you should be able to get a publisher to give your song back at some point I (say four or five years after the term) if it hasn’t been exploited. The theory is that the song is of no value to him or her on the shelf, but potentially could be to you in a new situation. This gets more difficult if the publisher has paid you an advance, particularly one that hasn’t been recouped (which is probable if the song is unexploited). However, you may be able to negotiate an option to get the song back by repaying the advance (be sure to say you don’t have to pay back an advance that has been recouped). The publisher will want to put a time limit on this right to repay (say a year or two after the first date the song can revert), but even with this limit, the option is a plus.

Be certain it’s your option to pay the money back. You don’t want to be obligated to buy back your losers, because all that does is guarantee the publisher against a loss.

Reversion of copyright for non exploitation is something you should always ask for. You may not always get it, but you should always ask for it. Is it clear I mean always? Did I say always?

Automatic Reversion
When you move into the super leagues, or if you are in a bidding war, you can ask for a reassignment of all compositions, whether or not they’re recorded. Time frames on these usually run something like five to fifteen years after the close of the exclusive term, with the majority in the seven to twelve year range. Also, this is sometimes tied to recoupment for example, ten years after the term, the publisher will reassign only if you’re recouped. In this case, (1) take the right to pay the unrecouped balance (remember to keep it at your option), in which case you get the songs back sooner; and (2) be sure you get the songs back if and when you do eventually recoup, even if it’s five or ten years later. Don’t assume the contract will say either of these if you don’t ask, because it usually won’t.

If they give you the right to repay and get back songs, publishers now ask for more than 100% of the unrecouped advance. For example, they want 125% of the balance; if you were $10,000 unrecouped, you’d have to pay the $12,500. Their reasoning is that, if they kept the song, they’d get the money needed to recoup your account plus their own share of those monies. So if they let you go early, they want their piece. Sometimes you can get his percentage down, to say 110% or so, = but it’s getting increasingly harder to get a straight 100%.

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