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A Common Music Business Contract Mistake – Not Thinking Long Term

2 Common Examples:

1. You’re offered 10% as an Artist
[Side Note: Make sure it says of the Retail Price! If it says “Wholesale”, make sure you get 20%!!!]

Why not ask for your rate to rise each album you release by 1/2%?

Why not ask that your rate goes up 1/2% for “Gold” and anothet 1/2% for “Platinum”?

Believe it or not, the Record Company will probably say “Yes” to both! Why? Because if you’re doing well, they won’t mind it, and if you’re Not selling, they can always rease you from the contract anytime they want!

2. Thinking you can stop paying a Manager [for example] when the contract is over.

Well, if you read the contract carefully you’ll notice that it says the Manager makes his/her percentage for all contracts signed during the term.

What this also means? Say you sign a Record Deal during the 3 years [example] you’re signed to the Manager. Well, although the Management Contract may be over in 3 years, the Record Contract may have a few years to run, and the Manager is entitled [through the contract] to keep getting his/her percentage of the Record Company monies for the length of THAT deal!.

How to solve that? How about a compromise: a “Reverse Sliding Scale”. An example: If Manager was getting 20% of the gross [average a Manager gets] during the 3 years, the Manager would get 10% the 1st year after the Agreement was over, 5% the 2nd year, 2.5% the 3rd year - and nothing thereafter.

Otherwise you’d be paying the Old Manager 20% and your New Manager 20%!!! Yikes!!!

© 2010 David J. Spangenberg

David J. Spangenberg is a Music Business Educator, Advisor, Consultant & Contract Specialist…, an Educational and Informational Music Business Website…”The Music Biz” - Complete Music Business Educational Book & Courses, Personalized Music Business Services…

Reader Comments (1)

One thing that I find interesting is some indie labels try to give out contracts cloned to read this way & that's always confusing to me. My contract with everyone on my label is 50-50 split of earnings after recoup of costs. If you're dealing with a label that is unlikely to move 10,000 units, I'd ask for something like that as the contract.

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