Tech Tip:Mumbo Jumbo: Co-Publishing Agreements - Part 2
by Jeffrey & Todd Brabec
Part 1 | Part 2
Compositions Covered by the Agreement
The agreement will normally cover all future compositions created by the writer during the term of the co-publishing agreement as well as, in some cases, all past songs written which are not controlled by another publisher.
Transfer of Copyright and Other Rights
The writer's publishing company will usually transfer 50% of the copyright ownership of all compositions to the major publisher. In addition, the writer's company will also normally give the major publisher all administration rights, including the right to license the use of the musical compositions throughout the world and the right to collect any monies that may be earned by the compositions. As with some songwriter agreements, the co-publishing agreement may also contain certain restrictions (e.g., no advertising commercial uses without consent) and reversions.
Term of Agreement
The initial duration of the agreement can vary, but the usual arrangement is for an initial contract term of 1 or 2 years, with a number of successive options on the part of the major publisher to extend the agreement for additional 1-year periods. The first period of the term may be for 1 year with three successive 1-year options; 2 years with two 1-year option periods; 4 years with no option periods; or any other variation that may be negotiated. Other agreements may be tied to the release of a minimum product commitment (e.g., for 2 years or the release in the United States of 12 songs on a major record label, whichever is later) or the recoupment of all advances paid under the agreement.
Depending, of course, on the reputation of the writer, the existence of any recording artist commitments, the quantity and quality of the songs controlled by the agreement, and the inclusion of any pre-existing hit songs, the major publisher will pay certain monies to the writer or the writer's publishing company at the time the co-publishing agreement is signed. These monies are treated as advances recoupable from any future royalties that may become due to either the writer or the writer's publishing company.
To put it simply, all royalties that become payable to the writer or his or her publishing company under the agreement will be used to reimburse the financing publisher for the monies advanced at the time the contract is signed. For example, if $50,000 is given to the writer at the signing of the contract, then the first $50,000 in royalties due the writer or the writer's publishing company will be used to recoup the advance given. Until that happens, the writer and the writer's company will not receive any royalties.
Option Year Advances.
In addition to advances given upon signing, the major publisher will pay an additional advance whenever it exercises an option to extend the duration of the agreement. Such advances can be paid either in a single lump sum at the start of an option period or in several monthly payments during each option year of the contract. For example, there might be a payment of $60,000 upon commencement of each option period, or the same $60,000 could be paid out in twelve equal monthly installments of $5,000. This type of monthly payment method can also be used in the initial period of the Agreement. Many times, option year advances are based on a percentage of the prior year's earnings with minimums and maximums provided so advances won't go below or above certain set amounts.
Advances Based on the Release of Commercial Recordings.
If the writer is a recording artist or producer, the co-publishing agreement will usually guarantee a specified advance if an album containing songs written and recorded by the writer is released during each year of the agreement. The amount of this type of advance varies, dependent on the writer/artist's commercial success and appeal, the number of songs by the writer that are contained on the album, the reputation of the label releasing the CD, where the release occurs, how high it gets on the trade paper charts, sales activity and whether or not past advances have been either totally or substantially recouped.
© 2002 Jeff Brabec, Todd Brabec
This article is based on information contained in the new, revised paperback edition of the book "Music, Money, And Success: The Insider's Guide To Making Money In The Music Industry" written by Jeffrey Brabec and Todd Brabec (Published by Schirmer Trade Books/Music Sales/435 pages). musicandmoney.com
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