FROM THE DESK OF

FROM THE DESK OF... SHELLY HARRIS

UNRAVELING THE RED TAPE

by: Shelly Harris / Entertainment Attorney

QUESTION:

In the recent “Agreement Between Record Company and Recording Artist” my band received from an Independent label (see the May 2005 "Unraveling the Red Tape"), there was a separate “Co-Publisher Royalty Agreement” attached after the last page of the agreement.

The original “Agreement” doesn’t mention the Co-publishing Agreement at all. Is this a whole separate contract the label is wanting us to sign, and should we sign it?

The Co-Publishing wording says that the label will be the “first publisher” and that we will be the “second publisher.”

It says the first publisher will give the second publisher – that’s us – 50 percent of all net publishing receipts after taking out amounts for expenses like copyright registration fees, accounting, printing and other misc. things. I really don’t know what this is all about, and is the typical thing with record contracts with indy labels?

ANSWER:

Some labels, especially major ones, will try to “cut” into profits in the way you have mentioned – by getting you to sign a co-publishing deal with them that is intertwined with the record contract itself.

Essentially, they want more than just your performance on record (and royalties from those sales) – they also want to cut into your songwriting royalties, too.

Your “publishing” royalties are 1/2 of the royalties you would potentially receive for the public performance (radio, clubs, etc.) of songs that you have written or co-written. (As you may already know, if you are registered with one of the performance rights organizations, you are entitled to receive one half of any of any songwriter’s royalties for any songs you write when you are registered as songwriter(s) but you will only receive the other half as a publishing company – provided you have set up a publishing company for your own songs and registered it with the performance rights organization as well.)

In your particular case, however, it sounds like the original Recording Contract is flawed if the label actually intended to incorporate the co-publishing agreement into the original or primary recording contract.

The co-publishing agreement should be “incorporated by reference” into the original contract – in other words, intertwined – or it is actually a whole separate contract and agreement that you would not be obligated to sign, even if you did sign and agree to the underlying Recording Contract itself.

That said, it is really not advisable to sign a co-publishing agreement with an independent label, since they usually do not have the financial resources and other types of clout that will make it worth your while to give up so much for so little.

In addition, if the label isn’t completely solvent over a period of years, and/or ultimately winds up “folding” or in bankruptcy, then you would not only have songs and performances tied up in limbo-land on a sinking ship, but you would also have problems receiving your share of any related publishing royalties you might have coming your way over a period of years. In addition, you may also lose ultimate control of what is done with your songs with regard to synch or other licenses.

If you actually do decide to go with this label, try to avoid the co-publishing agreement at all cost. However, even if you get a better deal from a more established label that also insists on a co-publishing deal as part of the original recording contract, try to limit the songs that would be part of the deal to only ones that you have recorded for them, and also limit it to your recorded versions of the songs (as opposed to another artist’s) version of the song.

Finally, if you are willing to giving up half your publishing royalties as part of any recording contract, make sure you are at least getting something extra in return, such as a separate advance for the expected publishing royalties, and/or the label’s explicit agreement to promote the songs in some specific way.

Email your entertainment business questions and comments to Shelly at: shellyharrislaw@aol.com

[Note: Names are always changed in these Q & A’s; in addition, it is always in your best interest to consult an attorney of your choice directly regarding any particular legal issue or problem you might have.]

Back to Top

Web Design By:
Hungry Mind Design