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Eight Different Kinds of Publishing Deals:
A Thumbnail Sketch:
by Bart Day - Entertainment Attorney, November 2002
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People often speak of “publishing deals” in a generic way, which implies that there is only one kind of publishing
deal. In fact, there are a number of different kinds of publishing deals, as described below.
In the very early days of music publishing, songwriters simply sold their songs to music publishers for a flat
amount. Later, as songwriters became more business savvy and gained a little more negotiating leverage, a new kind
of contract evolved, consisting of three basic elements: (1) The songwriter would assign all copyright ownership
of the songwriter’s songs to the publisher; (2) The publisher would then commercially exploit the songs (e.g.,
by the sale of sheet music); and (3) The publisher would pay royalties to the songwriter.
Although that type of deal (which I refer to below as the “traditional publishing deal”) still widely exists today,
various newer kinds of “publishing deals” have evolved over the years.
Incidentally, when I use the term “publishing deal” here, I’m using the term rather broadly, to refer to any kind
of deal whereby some individual or company (other than the songwriter) obtains the right to receive a share of
the songwriter’s music publishing income (for example, mechanical royalties from the use of songs on records, public
performance income from BMI and ASCAP for radio airplay, and synchronization income from the use of songs in films,
television shows, computer games, etc.).
In short, the eight kinds of publishing deals today are as follows:
(1) The “traditional” Publishing Agreement;
(2) Single Song Agreements;
(3) Co-Publishing Agreements;
(4) “Step Deals”;
(5) Administration Agreements;
(6) Income Participation Agreements;
(7) Catalog Representation Agreements; and
(8) Self-Publishing Agreements.
These eight kinds of deals vary from one to the other in many respects, most importantly the following: (1) What
percentage of copyright ownership, if any, is given to the publisher; (2) What share of future publishing income
the publisher will get; (3) What functions the publisher will perform; and (4) How long the agreement will remain
in effect for.
For example, the first four kinds of deals mentioned above involve the transfer of at least part of the copyright
ownership of the songs. Not so, usually, with the last four kinds of deals mentioned above.
Of the eight kinds of deals mentioned above, there will almost always be one particular kind of deal that will
be the most appropriate type of agreement for a particular situation. By the same token, that same contract will
likely be totally inappropriate for many other types of situations. For example, an Administrative Publishing deal
might be the perfect kind of deal for one situation, and totally inappropriate for a different situation. Therefore,
I will outline below, for each type of deal, the kind of situations that each kind of deal is particularly appropriate
for.
And now, for a thumbnail sketch of each of the eight kinds of deals mentioned above.
The Traditional Publishing Deal
First, of all, the term “Traditional Publishing Deal” is not a term customarily used in the music industry. I am
only using that term here for purposes of distinguishing this type of deal from the other types of publishing deals
mentioned below.
1. Typical Scenario.
As mentioned above, this kind of deal dates back to the days of Tin Pan Alley. Today it’s used when a songwriter
and a publisher want to have a long-term relationship for all of the material that the songwriter will be writing
during the duration of the contract. This type of deal is usually not used when the songwriter is signed to a record
deal. (See “Co-Publishing Deals” below.)
2. Material Covered by the Deal.
This kind of deal will cover material written during the term of the contract, and sometimes may include certain
specified songs written before the contract was entered into. Usually the contract will require the songwriter
to deliver a certain number of new original songs to the publisher during each year of the contract.
3. Copyright Transferred.
Normally, the writer is assigning (to the publisher) 100% ownership of the copyright of the songs covered by the
contract.
4. Income Sharing.
The publisher receives all income from third parties, then pays the writer one-half of that income. The publisher
here is getting a larger share of the publishing income than in most of the other types of deals mentioned below.
That is because, in the case of this “traditional” kind of publishing deal, the publisher’s responsibility is to
proactively promote the songs involved and, theoretically at least, it is the publisher’s efforts that will cause
any future success of the songs. On the other hand, in the case of many of the other types of deals involved, the
publisher’s role is less promotional and proactive in nature, hence the publisher gets a small piece of the pie.
5. Term. Normally,
the agreement will be for an initial one-year period (with the writer obligated to deliver a certain number of
songs to the publisher in that one year), then the publisher will have several (in the range of three to six) consecutive
one-year options following that initial one year.
Incidentally – and this is very important -- the “term” means the period of time during which the songwriter is
writing songs for the publisher, and not how long the publisher will have rights in those songs. Normally even
though the term of the agreement may be only a few years, the publisher will be the owner of those songs for a
much, much longer period of time, i.e., until they go into public domain many years later. (There is one exception
here: If there is a reversion clause in the contract, then copyright ownership may revert to the songwriter at
some future specified time.)
6. Advances.
Established publishers usually pay a recoupable advance to the songwriter for the first year (payable in installments),
often in the range of $25,000 to $50,000), then an additional advance each following year the publisher exercises
its option to continue the contract for another year. Normally the contract will contain somewhat complicated provisions
for how the amounts of the advances for the follow-up years will be calculated.
The Single Song Agreement
1. Typical Scenario. This type of agreement basically is based on the same concept and structure as
the “traditional” type of deal mentioned above, but involves only one (or several) of the songwriter’s songs (i.e.,
songs already written). Sometimes, a relationship between a songwriter and publisher will start out this way, and
later they will enter into the “traditional” type of deal mentioned above.
2. Material Covered by the Deal.
Even though the title of this kind of deal would imply that it is only for one song, this kind of agreement is
sometimes used for several songs at the same time.
3. Copyright Transferred. Same
as with the Traditional Deal mentioned above.
4. Income Sharing.
Same as with the Traditional Deal mentioned above.
5. Term. Same
as the Traditional Deal mentioned above, but in the case of the Single Song Agreement, it is much more likely that
there will be a reversion clause. Typically the contract will (or, at least, should) provide that the copyright
ownership will revert to the songwriter if the publisher is not able to get the song recorded by a signed third
party artist or used in a film, television program, etc. within twelve or eighteen months.
6. Advances. Typically
there is only a very small advance paid, in the range of $200 - $500 per song, and sometimes no advance is paid.
Co-Publishing Deals (aka "Co-Pub
Deals")
1. Typical Scenario.
This type of agreement is typically used for writers who are in groups already signed to a record deal. This type
of agreement covers the original material on the group’s records. Normally all of the members of the group who
are songwriters will be signed to this type of agreement with the same publisher.
Just to be clear here, I’m talking about a publishing deal with a publishing company not affiliated with the record
company. Today, it is much less likely than it used to be that a record company will demand a publishing deal as
part of a record deal.
2. Material Covered by the Deal.
All of the original songs on the group’s first record, then the publisher will have the right to options on the
original songs on anywhere from two to four of the follow-up albums, hence for a total of 3 to 5 albums, with the
exact number depending on what the parties negotiate.
3. Copyright Transferred.
The songwriter normally transfers one-half of the copyright ownership to the publisher and retains the other one-half
ownership. In other words, the song is co-published (and the copyright is co-owned 50-50) by the third party publisher
and the writer’s own publishing company.
4. Income Sharing.
Normally, the third party publisher will collect all income and then pay to the songwriter and the songwriter’s
publishing company 75% of all publishing income.
5. Term. As
already mentioned, co-publishing agreements are usually for a certain specified number of albums.
6. Advances.
Advances are almost always paid to the songwriter in the case of co-publishing deals. For groups newly signed to
major label record deals, the initial advance from a major music publisher is typically in the $150,000 - $500,000
range and sometimes higher, with additional advances being paid if and when the publisher exercises its options
for the follow-up albums.
"Step Deals"
This type of deal is for situations where the songwriter is not yet signed to a record deal, but may later enter
into a record deal. The contract here will provide, in effect, that the deal will be the “Traditional” deal mentioned
above, but will automatically transform into a Co-Publishing deal if and when the songwriter is signed to a record
deal.
Administration Deals (aka "Admin Deals")
1. Typical Scenario.
This type of deal is used when the songwriter just wants a publisher
to collect royalties and handle the various paperwork (for example, the BMI/ASCAP song title registrations, copyright
applications, the issuance of licenses, etc.), and where the songwriter does not want or need a publisher to proactively
promote his or her catalog of song. A good example of a company that does a lot of Administration Deals is Bug
Music in Los Angeles.
2. Material Covered by the Deal. Most
often this kind of deal covers all material written by the songwriter, or at least any material that the songwriter
has not already committed to other publishers.
3. Copyright Transferred.
No transfer of copyright.
4. Income Sharing. Typically,
the publisher will take 10% to 20% of the income, and the pay the rest to the songwriter and the songwriter’s publishing
company.
5. Term. Administration
deals are normally in the range of three to five years.
6. Advances. For
catalogs generating a modest amount of income, usually no advance is paid. For more profitable catalogs, usually
an advance will be paid, with the amount to be determined on the basis of the income that has been generated in
recent years by the catalog.
Income Participation Deals
1. Typical Scenario. This
type of deal is a “publishing deal” only in the sense that it involves a share of future publishing income. Usually
this type of deal is used to cut someone in on a share of the publishing income – for example, to serve in effect
as a “finder’s fee” for having found a record deal for a songwriter. Very often the “income participant” is not
even a publisher.
2. Material Covered by the Deal. Highly
negotiable and varies widely. May only cover, for example, the material on the songwriter’s first album.
3. Copyright Transferred. No
share of copyright is transferred. Instead the “income participant” is only entitled to receive a share of income.
4. Income Sharing. Varies
widely, but often is in the range of 10% to 15%.
5. Term. Again,
highly negotiable and varies widely.
6. Advances.
No advance is involved.
Catalog Representation Deals
1. Typical Scenario.
This type of deal is used when a songwriter or publisher is primarily interested in getting their material used
in films, television programs, etc. and want to enter into a deal with a company that specializes in doing so and
has all the necessary connections. Ocean Park Music and Media Creature Music are good examples of Catalog Representation
companies.
Usually those types of companies also represent record labels that want to get their masters used in films, etc.
2. Material Covered by the Deal. Typically,
as the title “Catalog Representation” would imply, the songwriter or publisher’s entire catalog. But sometimes
the Catalog Representation company will “cherry-pick” only certain songs for representation.
3. Copyright Transferred.
No copyright is transferred.
4. Income Sharing. Typically
in the range of 25% - 50% of the income from any deals secured by the Catalog Representation company.
5. Term. Often
in the range of two to three years, but sometimes longer, sometimes shorter.
6. Advances.
Usually no advance is paid, but there are occasional exceptions.
Self-Publishing Deals
1. Typical Scenario. This
type of deal is between a U.S. publisher (including songwriters who act as their own publisher), on the one hand,
and a foreign publisher, on the other hand. For a cut of the income in the applicable foreign territories, the
foreign publisher will collect the income in those territories.
U.S publishers enter into this kind of deal in order to receive their money faster from foreign territories and
also to collect more of the income that has been earned in those foreign territories. (Often, for various reasons,
only part of the income earned in foreign territories is actually collected. The money not collected is customarily
referred to as “black box money.”)
2. Material Covered by the Deal. Usually
the entire catalog.
3. Copyright Transferred.
No copyright is transferred.
4. Income Sharing. The
foreign sub-publisher will normally take in the range of 25% of the income off the top, then pay the balance to
the U.S. publisher. The percentage taken by the sub-publisher will be significantly less for large, profitable
catalogs.
5. Term. Usually
in the range of three to five years.
6. Advances.
Same situation as with Administration Deals.
-----
Bart Day is a Portland-based entertainment attorney in private practice and is also music counsel for Vivendi Universal
Games, the computer game division of Universal Studios.
Bart is also the co-author of a chapter (entitled “Contracts and Relationships between Major Labels and Independent
Labels”) in The Musician’s Business and Legal Guide, a book compiled by the Beverly Hills Bar Association and published by Prentice-Hall
Publishing (New York).
The reader is cautioned to seek the advice of the reader's own attorney concerning the applicability of the general
principles discussed in this column to the reader's own activities.
Contact information for Bart Day:
1435 NW 19th Avenue
Portland, Oregon 97209
E-mail: bart@dayandkoch.com
Telephone: 503-224-4900
NOTICE TO MUSIC ACADEMY WEBSITE VISITORS: The above information is offered
for general informational purposes only, and not for the purpose of providing legal advice. You are cautioned to
seek the advice of your own attorney concerning the applicability of the general principles discussed above to
your own particular activities. |
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