Monday, April 29, 2013

Can We Get Out of Record Deal?

Dear Rich: I am in a band and last year we signed a distribution and publishing agreement which has turned into an absolute mess. I used to sing in the band but subsequently have found myself less our singer and more our copyright lawyer. I am better at singing. Our agreement made us solely responsible for paying for and producing the master recordings - we did. The label's responsibility was in providing marketing, booking, and distribution - they didn't. As a result we told them they were in breach of contract and gave them a 60 day notice letter wherein they had 60 days to remedy their non-performance or be in breach and the contract would be terminated. The confusing part is that they then proceeded to put our recording up for sale through physical and digital means. We told them to stop selling based on the fact that no separate "Exclusive Co-Publishing Agreement" was ever reached. Below is an excerpt from our agreement outlining the publishing deal (names changed, Sub=band, Company=label): 
 You hereby agree to grant and assign to Company affiliated publishing company, Mr Publisher (ASCAP) a division of Mr Publisher Media Group LLC a 50% copyright and performing rights interest less collection fees and 100% administration rights in and to each musical composition written, owned or acquired by you during the term of this recording agreement ("Compositions"). In connection therewith, you agree to enter into a separate Exclusive Co-Publishing Agreement with Mr Publisher (ASCAP), the terms of which shall be negotiated in good faith, but which shall include the right of Mr Publisher (ASCAP) to administer the Compositions throughout the world and may elect to charge an administration fee of (ten 10%). Should Company and Sub decide to terminate this agreement all rights of copyright will revert back to Sub unless Company can prove substantial progress in its tenure of administering compositions. 
Since we are splitting the copyright does that mean they are able to continue selling our music without our permission? Are we able to register our masters with the copyright office on our own given they have a 50% stake? So confused... Whenever the Dear Rich Staff gets a long letter that includes excerpts from a contract, our first thought is usually, "Get thee to an attorney." We think that's the proper course of action in this case. Here's why:
The cure letter. If your basis for claiming breach of contract was a failure to market, book and distribute the band, then by providing the "cure" letter you gave the company 60 days to correct those omissions. If the label failed to market, book and distribute within 60 days of your letter, the agreement is terminated. Putting the music up for digital and physical sale isn't enough to cure. The label needs to demonstrate an effort to market and book the band, too (and correct any other omissions mentioned in your cure letter). If not cured, the label is in breach and your grant (assignment) of publishing rights would be terminated as well. In other words, terminating the record deal for breach would allow you to retain all of your publishing rights and there would be no reason to execute a written publishing agreement.
Get out of it! So, you should stay focused on ending the contract  which, by the way, seems a bit lopsided (welcome to the music business). As we understand it, you pay to produce the album and you give up half of your publishing. The label doesn't seem to be taking any risk. After all posting a recording is easy, and creating physical CDs can be done without much of a financial commitment. So, unless the label has an impressive track record with other artists, you'd do best to pool your money, hire a lawyer and make sure the agreement is fully terminated quickly. The annoyingly difficult part is getting the label to take down the music it has posted for sale. In conjunction with getting an attorney, you should also register your music at the Copyright Office and with a performing rights society. And of course, another reason to check with an attorney is that we could be completely wrong about all of this. A second opinion will help.
Hiring a lawyer. If paying for a lawyer is a challenge, find out if there's a volunteer lawyer for the arts service near you.

No comments: