Buy-Out Clause - Should I Agree?

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JuneB
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Buy-Out Clause - Should I Agree?

Post by JuneB » Tue Jul 20, 2021 6:31 pm

Looking for advice. I have an opportunity to sign a couple of vintage hard rock songs (circa 1989) to a library with a standard 50/50 split, but in perpetuity AND a buy out clause that transfers the song to the publisher upon meeting the threshold - which is fairly high. I had not really planned to do anything with these songs unless an opportunity for vintage music came up for sync. Thoughts? Go for it or politely decline?

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cosmicdolphin
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Re: Buy-Out Clause - Should I Agree?

Post by cosmicdolphin » Wed Jul 21, 2021 5:51 am

Only you can decide. A few questions...

So the current deal is Exclusive, you keep all the writers, they keep all the publishing and you split any sync fees 50-50 right ?...pretty standard

When they say " Buyout clause " what do they mean exactly ? Are you retaining any of your rights ? Do they mean a Sync Buyout where you still get your backend but no Sync Split...or do they mean a total buyout where you effectively get a lump sum and walk ?

When they say " Meets a certain threshold " what do they mean ? A monetary target ? measured how ? over how long ?..Is this a mandatory thing that will kick in at whatever the threshold is ?

At the end of the day if it's a lock-stock deal you gotta ask yourself if someone gave me X amount right now for my song and that's all I would ever earn from it..would I be happy to hand it over for whatever X amount is.

Personally..If I was offered the deal for one of my 30 yr old tracks I'd take it - Rather than have them sit on the HDD for another 10-20-30 yrs earning zero. And I would spend the money on something I wanted...I can always write more songs. Other people are more attached so it's a personal decision, you can't really predict whether the songs will land any place or not.

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Casey H
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Re: Buy-Out Clause - Should I Agree?

Post by Casey H » Wed Jul 21, 2021 10:38 am

+1 to Cosmicdolphin's answer. Please let us know more info, per his questions.

In general, without knowing all the details, making money off a song that would otherwise just sit and collect dust for eternity is a good thing.

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Re: Buy-Out Clause - Should I Agree?

Post by JuneB » Wed Jul 21, 2021 12:25 pm

So yes -50/50 standard deals, exclusive but after it reaches $XXXX then publisher takes all rights and I get writer's back end. So on one hand it kinda' is no bueno but the ability to make any money on something that was just sitting there is a good thing.

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Re: Buy-Out Clause - Should I Agree?

Post by Kolstad » Thu Jul 22, 2021 2:02 am

I would decline, but I do that with almost all library deals at the moment, so don’t think it’s great advice.
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Re: Buy-Out Clause - Should I Agree?

Post by edmondredd » Thu Jul 22, 2021 3:04 pm

JuneB wrote:
Wed Jul 21, 2021 12:25 pm
So yes -50/50 standard deals, exclusive but after it reaches $XXXX then publisher takes all rights and I get writer's back end. So on one hand it kinda' is no bueno but the ability to make any money on something that was just sitting there is a good thing.
That's quite tricky. Are you in a position to negotiate? If yes, you could maybe negotiate that you have a reversion clause until it reaches the threshold of $XXXX (in profit fees or backend). Once that's met, the duration would change into perpetuity. In general, it's not advised to give up your writer's share at any moment. But that's me, and my point of view. HTH
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Re: Buy-Out Clause - Should I Agree?

Post by Casey H » Thu Jul 22, 2021 5:13 pm

edmondredd wrote:
Thu Jul 22, 2021 3:04 pm
JuneB wrote:
Wed Jul 21, 2021 12:25 pm
So yes -50/50 standard deals, exclusive but after it reaches $XXXX then publisher takes all rights and I get writer's back end. So on one hand it kinda' is no bueno but the ability to make any money on something that was just sitting there is a good thing.
That's quite tricky. Are you in a position to negotiate? If yes, you could maybe negotiate that you have a reversion clause until it reaches the threshold of $XXXX (in profit fees or backend). Once that's met, the duration would change into perpetuity. In general, it's not advised to give up your writer's share at any moment. But that's me, and my point of view. HTH
If I read this right, NOT giving up writer's share (PRO back end). Might be giving up future share of sync fees but that's what a buyout generally is. Keep in mind that we get tons of placements every day through non-buyout libraries that pay no sync, only back end. With a buyout, you get some guaranteed cash up front. I don't know how much is being offered per track but also remember that we put tracks in libraries every day that never earn a penny. A buyout is a bird in hand. And the library offering the buyout deal has a vested interest in getting your track placed as they have shelled out money.

:D Casey

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