SONGWRITER DEALS: Part I, By Donald S. Passman 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 October 4, 2004

Standard Contracts
For some reason, all songwriter contracts seem to be labeled “Standard Songwriter Agreement.” However, I’ve never seen any two Standard Songwriter Contracts that looked like they were even distant cousins, much less twins. So don’t take any comfort in the words at the top of the page. Here’s really what to look for:

“Catch All.” Some contracts say the songwriter gets 50% of the publisher’s receipts from “mechanical, synchronization, and transcription income,” or words to similar effect. The problem is that the language is sometimes a limited list of monies from which the songwriter is paid. This means that the publisher could be collecting monies that it doesn’t share with the writer, and this is definitely something to avoid (if you’re a songwriter).

This problem isn’t cured by adding everything you can think of to the list. For example, even the most complete list of income sources anyone could put together in the 1950s would have omitted income from home video, since it didn’t exist. The same would be true of arcade games that play music, computer software that reproduces copyrighted songs, Internet transmissions, and so forth, which not only didn’t exist but weren’t even contemplated. What you really need, at the end of the list of items, is a catch all. This is a phrase that says the writer gets 50% of “all other monies not referred to in this agreement.” Often, you’ll find the contract states just the opposite: the writer is only entitled to a share of monies specifically set forth in the contract. So cross this out, and add your catch all. (Tell them I said you have to have it.)

Share of Advances. Most contracts also say you don’t share in any advances the publisher may get. Most of the time, this is fine if the publisher gets an advance for its entire catalog of songs (of which you’re only a part), you really have no right to share in that advance until your song has earnings that are used toward recoupment. There’s no way to know whose songs will earn back the advance, and so there’s no reasonable way to allocate the advance to a particular song until royalties are earned.

The exception is an advance paid specifically for your composition. One example is when a publisher issues a license at less than the statutory rate and gets an advance (or guaranteed payment for a certain number of units), for one particular song. (We touched on this on page 207.) Since this advance or guarantee is recoupable only from your song’s earnings (and doesn’t have to be repaid if there are no earnings), you should get your share when the advance/guarantee is paid to the publisher. So add language saying you do share in advances and guarantees which are specifically for your composition.

No Playing Footsie. If the publishing company is affiliated with your record company, you want to make sure they don’t issue “sweetheart” licenses (i.e., licenses at less than customary rates) to their own record company. In other words, you don’t want them playing footsie with their sister companies at your expense. For example, they might license your songs to their company at half of the statutory rate. Sure, their publishing company makes less (it only gets its share of a smaller amount), but the record company more than makes up the loss, and you don’t. This would also apply if they own a film company or any other potential user. So add a provision saying that licenses to their affiliated companies must be on an arm’s length, customary basis.

“At Source.” It’s also important (and cheap insurance) to make sure your publisher’s deals with its subpublishers are all “at source” (see page 231), so that the publisher’s income (in which you share) is the largest possible amount. Also, you should limit what the subpublishers can charge, to say 15% or 25%, particularly when the publisher owns a number of publishing companies around the world.

It’s possible (although extremely difficult, and takes a lot of clout) to have your writer’s share computed “at source.” In these deals as well, you should limit what the subpublisher can charge.

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