How To Negotiate a Contract #berklee #cdbaby #diymusician


Today I attended two presentations at the DIY Musician Conference. The first one, which I’ll get to in a later post (because it’s kinda techy and will take time to write up) was an open DJ session with Ableton Live. The second, which I’ll briefly summarise here, is a one-hour overview of contracts for independent musicians, presented by my estimable colleague Tonya Butler, Assistant Chair of the Music Business department at Berklee.

ABSTRACT: When it comes to getting signed as a musician, a bad deal can be much worse than no deal at all. In this session, Tonya Butler, a top negotiator, will be providing vital information on key music contract clauses while walking the group through the key negotiation points of each clause.

IMG_0618Tonya opens with a helpful summary of the seven most important points – ‘Material Terms’ – of any management, label or publishing contract, stating at the start that these are the negotiables that artists should consider before signing (putting aside the ‘boilerplate’ material that’s in every contract). They are:

  • Term
  • Territory
  • Services
  • Grant of Rights
  • Compensation
  • Name and Likeness
  • Creative Control

She then leads us through each area, and suggests that all artists, even at the start of their careers, should consider these things at least partly negotiable. The Term refers to the duration of the contract, and there is considerable discussion of the idea of a trial period, which each party can use to evaluate the effectiveness of the other. The likelihood of negotiating such a trial is dependent on the leverage that the respective parties have, which is why the majors, for example, generally don’t offer this because of the larger investment/risk they have in the artist.

Territories are generally related to the opportunity the manager/label/publisher will have to exploit the work in a given geographical area. For a manager negotiating local gigs, the territory would be smaller than, say, a label tasked with getting Spotify (etc) distribution for the artist, where the territory (begin digital) would be necessarily worldwide.

Services refers to what each party will do for the other. Tonya pointed out that a new artist might be so pleased to be signing that they may forget that contracts are a two way thing, and she reminded the group that for any contract to have meaning, each side has to give something, and get something. There follows a useful discussion of contractual breach scenarios; what does the artist do if the manager fails to deliver an agreed number of gigs, or an amount of income, for a given term… and what does the label do if the artist delivers a recording that, er, sucks?

[JB note: as well as being an excellent teacher with deep subject knowledge and great classroom rapport, Tonya also brings an unusual perspective to the subject, because her background is as a label attorney. That is to say, she doesn’t particularly or necessarily take a pro-artist stance in all things, but rather describes contracts for what they are – a documented negotiation between two parties, for mutual benefit. I’ve often thought that the tendency of some people to demonise ‘the labels’ (particularly the majors) is perhaps a little unfair. They have a tough time; in what other industry does more than 80% of the product fail to make a profit?!] 

We then dive deep into the idea of grant of rights – whether to assign copyright (and take a royalty split) or whether to try to negotiate to keep the copyright (but arguably disincentivise the other party). This is far from straightforward and, like other Material Terms, can depend on each party’s leverage. Various scenarios are discussed, with some good examples from the audience based on their own experience and circumstances.

So, to Compensation. Money. As Tonya says, in an ideal contract, there should always be money flowing to the artist. We explore a small number of examples where there is an in-kind benefit (a zero-payment song placement in an indie film, say, in exchange for using that film on the artist’s bio/website for promotional purposes). But in most cases, the benefit to the artist is a financial one – a royalty, or direct payment.

The group is very engaged, and we only scratch the surface of the last two points – use of likeness and Creative Control – but the vibe in the room is upbeat, and it’s clear from the discussions I overhear at lunch that Tonya’s session could easily have gone on for twice as long.

Comments

  1. It is very important for young musicians to fully understand the legal implications of contracts. My own career as a performer ended abruptly through signing a badly negotiated contract! Even though the record company went bankrupt we found ourselves still tied into the contract and ended up having to buy ourselves out, which ended the band! We had signed the contract after some very expensive advice from a specialist London law firm. I would recommend getting a second opinion before signing anything.

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