Exclusive agreement question

[mladendomic]

Hi, everybody.

Almost three years after joining TAXI, after exactly 100 submissions and 11 forwards, I finally got a call from a library interested in adding one of my songs to their catalog.

So, they sent me their exclusive standard agreement, and I read it and I have few questions for you, experienced Taxi cats.

First, they are offering exclusive agreement in which I, as 'artist' give 100% of all publishing ... etc... rights with 'irrevocable grant' to company, meaning - forever. However, 'Artist shall retain ownership'.

Is this really usual? What if they don't manage to sell my song for months or even years? Shouldn't there be some 'period clause', for instance a period of year or two after which - if they don't make a sell - they return publishing rights to me? Is it advisable for me to ask them for modification in contract, so that I can reclaim my publishing rights after some period (if they fail to sell my song)?

Second, I don't understand about paying to people who contributed to my song. According to Agreement, if 'artist' is more than one person, the 'company' will pay only to the authorized representative of 'artist(s)', the one that is signing the Agreement (and then divide between such contributors internally).

In the next article the Agreement states that 'any third party contributor shall sign (certain attached form) in order to receive payment from 'company'. I just don't understand that. Is it a) or b) ? Any ideas? I will put the question to company,

I thank you all, I hope I didn't disturb some rule about confidentiality or something. This is my first agreement of the kind, and additionally, I live outside US and I would like to avoid stupid mistakes.

[PeterD]

Hey there mladendomic!

Is this really usual? What if they don't manage to sell my song for months or even years? Shouldn't there be some 'period clause', for instance a period of year or two after which - if they don't make a sell - they return publishing rights to me? Is it advisable for me to ask them for modification in contract, so that I can reclaim my publishing rights after some period (if they fail to sell my song)? Sometimes they won't use it and it'll be tied up forever. You just have to keep on writing and essentially forget about it, as painful as that sounds. Hopefully there's a clause in there which allows you the rights back after a few years of no activity.

Second, I don't understand about paying to people who contributed to my song. According to Agreement, if 'artist' is more than one person, the 'company' will pay only to the authorized representative of 'artist(s)', the one that is signing the Agreement (and then divide between such contributors internally). If you're the only one on the contract (besides the library), you're the only one splitting the money. If there were co-writers involved, their names and PRO ID's (ASCAP, BMI, SESAC, etc.) will have to be listed on that page in order for them to get paid (I think).

In the next article the Agreement states that 'any third party contributor shall sign (certain attached form) in order to receive payment from 'company'. I just don't understand that. Is it a) or b) ? Any ideas? Schedule A should have your name, the song title, and your PRO info. You can always ask them in an email too.

I thank you all, I hope I didn't disturb some rule about confidentiality or something. This is my first agreement of the kind, and additionally, I live outside US and I would like to avoid stupid mistakes.

Yeh, contracts are a pain sometimes. I hope this helps. I'm sure others will have more detailed info to share, but this is the jist of it.

Good luck!!

[mladendomic]

Thanks, Pete! It was helpful.

[eeoo]

Exclusive deals in perpetuity aren't unusual, I have many of my best tracks signed to deals like this. I just figure my next song will be even better and move on. If you have co-writers you'll need to list them with whatever info is required and if you had other people play on the track you'll need to have them sign work for hire contracts, unless they are co-writers.

Hope that helps...

eo

[shanegrla]

I believe the "pay all the money to you and then you split it with your cowriters" thing is just in regards to any upfront sync fees, should there be any. But all the back-end royalties you shouldn't have to worry about. Those will go directly to your cowriters through their PRO.

I just recently signed a deal myself with that same situation (I suspect it could be the same library). And yes, should I get any up-front sync fees, I'll have to pay my cowriter out of my share. That sucks I know, and it sounds like a paperwork pain. I'm definitely gonna have to talk to my accountant to see how to handle that, because otherwise, as far as the IRS is concerned, I'll have made (and be taxed on) the full amount. But I'm sure if you write on the check to your cowriter something on the order of "for 50% cowriter's share of sync fee for X song for X placement" etc. maybe that will make that payment a legitimate business expense or something. Like I said, I'll have to check with my accountant on that. I'm assuming nothing's gonna happen until I see her next anyway.

The good news (ha ha, not really) is that up-front sync fees are rapidly going the way of the dinosaur and really this probably won't be a problem anyway. But if it does happen, it will be one of those "good" problems to have.

[HowardBHC]

FWIW - IMO, You can always ask for an ammendment to the agreement to provide you with an out clause, a statement in the contract that reassigns publishing rights back to you in the case that nothing comes to fruition within a set period of time. (3-5 years should give the company a reasonable amount of time to work the track into opportunity)

Some will - Some won't, No guarantee you get the answer you want, but it doesn't hurt to ask.

[coachdebra]

should I get any up-front sync fees, I'll have to pay my cowriter out of my share. That sucks I know, and it sounds like a paperwork pain. I'm definitely gonna have to talk to my accountant to see how to handle that, because otherwise, as far as the IRS is concerned, I'll have made (and be taxed on) the full amount. But I'm sure if you write on the check to your cowriter something on the order of "for 50% cowriter's share of sync fee for X song for X placement" etc. maybe that will make that payment a legitimate business expense or something. Like I said, I'll have to check with my accountant on that. I'm assuming nothing's gonna happen until I see her next anyway.

Not an accountant - but I believe you would count that as an expense (you're paying your co-writer) and you'd account for it with a 1099 - for which you'll need your co-writer's SS# or EID # if they're incorporated. Unless it's less than $600 total, in which case, you just list it as an expense.

[shanegrla]

Not an accountant - but I believe you would count that as an expense (you're paying your co-writer) and you'd account for it with a 1099 - for which you'll need your co-writer's SS# or EID # if they're incorporated. Unless it's less than $600 total, in which case, you just list it as an expense.

Thanks Debra.
Yes, I was figuring it would be something like that. Of course, I should be so lucky to come across this issue to begin with -- and it hasn't come up yet.

But maybe this year!