Two years ago my friend Gary from my local rock station had a little idea to call me and chat on-air about what was happening in my world. Very casual. We had a load of fun so he called me the next week and we did the same thing. Then listeners started sending in questions and requests and next thing we knew, we had a weekly segment known as “KD and Me”. We’d talk music, law, family, whatever. Anyway, long story short – it’s become a bit of a thing and we just celebrated our 100th episode!! Here’s to little ideas that become something big
Three years ago, I relaunched a program with the help of SaskMusic to provide free legal advice to musicians in the province. It’s the only program of its kind in Canada and in those three years, we’ve provided over 180 hours of free legal advice to Sask musicians!! It’s an absolute honour to do it and maybe someday we’ll take it right across Canada
So, you’ve found the perfect producer for your upcoming recording project. Great news. Now the producer sends over a 10-page contract full of legalese regarding record royalties, songwriting splits, SoundExchange revenues, producer advances and more. Before you enter the studio, here are some key points to look for and understand:
1) Who Owns the Masters?
First and foremost, you should own the master recordings once the producer fee is paid. In rare circumstances, the producer might own the masters or have some co-ownership interest, but that is definitely not the norm. Almost always, you should own the masters.
2) How Many Points for Your Producer?
It is industry standard for your music producer to receive “points” on the songs they produce. A point is simply a percentage of record sales. For example, 4 points equals 4% of net record revenues from the masters produced by your producer. My advice: make sure that there is language inserted that allows you to recoup all expenses related to the production and exploitation of the masters before these points kick in. In other words, until you recoup all of your costs in relation to the masters, the producer doesn’t start getting revenue. Industry standard is 2-5% for points, either on the suggested retail price (SRLP) or published price to dealer (PPD). See my article here for more on SRLP vs. PPD.
3) Should Your Producer Get SoundExchange and Other Revenues?
I find that more and more producers are demanding a percentage of SoundExchange revenues on songs they produce. The same goes for other so-called “direct monies” or “flat fee” uses of the masters (film/tv placements, etc.). This is mostly a reflection of the modern realities of the music biz, as “points” aren’t worth what they used to be. Not all producer agreements include SoundExchange/Flat Fee revenues, but if yours does, make sure the language is clear and the percentage is fair. Typically, a fraction is used: whatever producer points you agree on (let’s say 4 as per above) divided by the artist’s record royalty flowing from the record label (let’s say 20%). So in this example, 4 divided by 20 gives a 20% SoundExchange/Flat Fee percentage to the producer. My advice: if you don’t know what the label royalty is or don’t have a label involved, the standard practice is to use a “deemed royalty,” which is simply a royalty that you and the producer agree on that’s based on industry standards (somewhere between 15 and 20%). I would cap the producer’s SoundExchange/Flat Fee entitlement at a specified amount, nothing over 25%. Obviously, lower is better for you as artist.
4) Is Your Producer a Co-Writer of the Compositions?
This is perhaps the most important point to consider: is your producer a co-writer? See my article here for guidance on such a determination. I recommend that you have this discussion as to whether you intend to co-write with the producer before recording commences. I realize that sometimes co-writing just happens in studio, whether you plan for it or not, but it’s wise to discuss this ahead of time to ensure mutual expectations going in. My advice: If the producer is indeed a co-writer, you need to ensure that they assign administrative rights in the compositions to you. This will allow you to use and exploit the compositions without having to obtain the producer’s signature in each instance.
Insider tip: this exact issue was taken to the Supreme Court of British Columbia in the late 90s, when Sarah McLachlan was sued by her former producer Darryl Neudorf, who claimed he was a joint author of four of McLachlan’s early compositions. The takeaway from the court’s decision: if an artist and producer intend to co-write together, that must be agreed to before the recording process commences. Otherwise, the court will assume that your producer is not a co-writer.
5) How Much Will Your Producer Be Paid?
The Music Producer Agreement should clearly define how much you are paying the producer, either per song or via an hourly rate. My advice: go with per song, otherwise you might be surprised by the bill at the end of the project. Typically, half of the producer’s fee is considered a recoupable advance against royalties payable to your producer. In other words, half the producer fee is considered a recoupable cost, and half is not. A typical timeline in terms of payment of the producer fee is half before recording starts and half upon completion.
Insider tip: the producer fee and producer points/SoundExchange entitlement are definitely intertwined. In other words, if you want to keep more of your royalties and SoundExchange (and can afford it), you can offer a higher per-song producer fee. The same goes the other way, if you are short on funds, you might be able to offer more on the other end. My advice: think big picture and long term, and don’t undervalue your catalog in the long term in exchange for a short-term break in producer fees.
There are many other important clauses in a music producer agreement, but this is a great start. As always, don’t hesitate to reach out with questions. My door is always open.
The most important member of our team is your manager, and the most important agreement you as a musician will sign is an Artist Management Agreement. Managers have never played a more important role in the music industry than they do today, and your manager will likely have a greater impact on your career than any other person on your team (besides Kurt Dahl).
Why? Because they are involved in every single aspect of your career, from touring to releasing records to publishing. Your manager is the person who coordinates things between your record label, publicist, booking agent, publisher, and promoters. They are the quarterback of your music career, and if you are ready to take the next step in your music career, you probably need one.
Here are 5 things to look for in an Artist Management Agreement:
1) How Long is the Term?
The shorter, the better for you as an artist. Almost all Artist Management Agreements come with an initial term, followed by one or more option periods. The shorter the term, the better for you as artist. If things are going great, you can always sign another agreement to extend things. But if your manager isn’t living up to your expectations, you’ll be able to cut ties sooner and find a better fit. The late, great David Bowie spent years in litigation (and millions in legal fees) because he fired his first two managers before the term was expired.
2) If You’re Not Making Money, Neither Should They
The Artist Management Agreement should allow your Manager to only make a commission on revenues actually earned by you. If you don’t earn any revenues in a given period, neither should they. If your potential manager is asking for a weekly/monthly/yearly fee, that is a definite red flag, for me.
3) How Much is Being Commissioned?
Managers commissions are typically between 15 to 20% of an artist’s gross income. Whether it’s 15% or 20% really depends on the level of the band and the bargaining power of each party. I’ve seen some net deals, but they are extremely rare. That being said, I always push for a net commission on merchandise. In other words, you get to deduct the costs of manufacturing, shipping and artwork before the manager takes a commission on merch revenues.
4) What is Being Commissioned?
As important as how much is being commissioned, is what is being commissioned. Certain funds you receive should be excluded from your manager’s commission, such as money received from your label to make music videos or record an album, money received as tour support, etc. If you get FACTOR or Starmaker funding, does the manager get a cut? What about gifts or money from investors? The Artist Management Agreement should be clear on what can and cannot be commissioned.
5) Is there a Sunset Clause?
Related to the length of the term is the length of the post-term, known as the “sunset period”. This is a crucial aspect of any Artist Management Agreement. This is the period following the term where commissions are still payable to the manager, from contracts that he/she negotiated during the term. As with the term, the shorter the better, and the sunset commissions should be declining over time, hence the term “sunset”. I’ve seen deals where the sunset period never ends, and that’s a serious red flag. The sun should always set.
A bonus point: don’t take legal advice from the manager’s lawyer. Ever. This might seem obvious but it happens more often than you’d think, and would be totally unacceptable anywhere else besides the music industry. If your manager doesn’t want you to obtain legal advice on the contract, that is a major red flag. This could be the most important contract you sign in your career; get proper legal advice.
Final thought: the most important thing to consider before working with a manager is, what does your gut instinct say about the person? That’s as significant as any legal clause, and is where you should begin. All the negotiating in the world won’t leave you with someone you enjoy working with on a daily basis. Once that box has been checked, take the contract to an experienced entertainment lawyer, and create a deal that opens rather than closes doors for you.
It’s not every day you get a letter from a legend. No, not Taylor Hawkins (that would be cool), but Fred Gretsch, whose name was on the front of my drums for over a decade. Mr. Gretsch had been reading articles on my website (!) and then up & called me the other day (!!). I gave him some impromptu legal advice, and he wrote me this letter. Now I’ve got an open invitation to come stay with his family down in Georgia. Time for a road trip!!