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The Great Escape: some legal thoughts
By CMU Editorial | Published on Wednesday 19 May 2010
Time for our final panel report from last week’s Great Escape now, and some tips and observations from those mighty mighty music lawyers, who turned off their clocks for fifty minutes to share some thoughts and advice on Saturday afternoon. Three particularly interesting themes covered were royalty cuts, 360 degree deals, and how new bands can find legal help.
First, royalty cuts, and an opening nugget of advice from Trevor Gale of America’s third songwriter collecting society SESAC, who began the proceedings by telling any new bands in the room “make sure you have your splits sorted out”. He was talking about copyright splits, and who owns a share of the lyrical, musical and sound recording copyrights any band creates as soon as they record an original song.
“Make sure you know from the word go which band members own which copyrights in your music”, Gale observed. “Is the drummer getting a cut of the publishing [lyrics and melody], and if so how much? And before you have a label in place, think about who owns any sound recording copyrights, too”.
Asked for advice on how rights in an original song might be split between band members, a manager, producer and mixer, Dean Marsh added: “It depends, and it is up to you what percentage of a copyright each person gets. For the actual songwriters, what is a fair split is more a musicology question than a legal question, what percentage of a song did each person create? As for the other people. Producers and mixers don’t normally get a cut of the songwriting copyrights unless they are actively involved in the songwriting process. They might get a cut of the sound recording copyright. Whether a manager gets a share is really up to you and them”.
Assuming a band and their manager has everything sorted out between themselves regarding royalty shares, what about the next bit of legal wrangling, the record deal? Focus quickly fell on the very in vogue ‘360 degree’ record contract where a record company, as the initial cash investor in a new band, demands a cut of every revenue stream the band may create, and not just their record sales, as would have traditionally been the case. Perhaps unsurprisingly, the legal minds at the table weren’t so keen on the 360 thing.
Ben Challis cautioned that if a band puts all its eggs in one basket – so that recordings, live, publishing, merchandise etc are all tied up in one deal – things could go horribly wrong. “What if that label turns out to be incompetent or lazy? Your entire career is then dependent on one company who might just keep on holding you back. If you can, it seems sensible to keep your options open by working with multiple companies on different parts of your career”.
Marsh agreed he had some concerns about 360 degree deals where bands are asked to hand over the keys to all their future revenue, though did note that some multi-revenue stream arrangements that have emerged in recent years were more attractive than others. “Some labels are working with artists as investors, so they invest money into the artist’s company and take a stake in that company. These deals are basically 360 degree deals, but have a lot more potential”. Gale added a final piece of advice; if you are doing a 360 deal with a label, ask them for proof of similar deals they have already done, and see whether those deals have worked out for the artist.
Of course, all such negotiations are easier if a band has good legal guidance, but that doesn’t come cheap. If new bands have tricky business decisions and tedious legal arrangements to make, where can they turn for legal advice? “Lawyers aren’t generally cheap”, Saranne Reid admitted, “and I’ve known bands who say to me, ‘we don’t know what to do, we have £1000, do we hire a lawyer to sort out our contracts or buy a second hand van?’. I can’t really answer that question”.
Some lawyers, the panellists said, are willing to agree to very flexible payment terms when working with new bands, or to take on a business manager role on a commission basis. And if you’re lucky to find such a thing, said lawyer might be able to offer more than just legal advice. Music lawyers are generally very well connected, the panellists reckoned, and can put new bands they like in front of key decision makers at labels and other agencies. So, definitely worth looking for.
