TMN Ask A Lawyer: Signed to a label? Know your rights.
TMN Ask A Lawyeris a semi-regular column where our readers receive expert legal advice from a renowned entertainment lawyer.
Q: What can record labels force artists to do?
A: Record labels cannot force artists to do their willing by threat of violence (it is not the 70s anymore) but they can force an artist’s hand using the power of the pen. Record companies use their superior leverage to force artists to sign onerous recording contracts that favor the labels.
After all expenses are accounted for and everyone has been paid except for the band and the label, labels often make a significant amount whilst artists make virtually nothing.
If a band signs a deal memo prior to consulting a lawyer (which many do because this is just a ‘memo’ and they have the belief that others may get the gig if they do not sign) they can be in a lot of trouble. They are then often obliged to sign a deal with that label. If they do not, they may lose all their rights to perform and record.
These deal memos can also lead to artists signing away ownership of their work. It is not uncommon for a label to own the artists copyright and keep the songs out of print rather than allowing the artists to self-publish.
Often, artists will be advanced a certain amount, say $1,000,000. If they spend $500,000 on recording, this leaves $500,000. Of this amount, the artists lawyer, manager and business manager are paid $150,000. This leaves $350,000 for, let us say, four band members to split. After taxes, the profit for artists can be very low.
Line items such as tour support, advances and independent promotion costs are usually charged to the band. The royalties the band receives are often only enough to match recoupable expenses. Meanwhile, the record company usually gross millions and own the artists copyrights. In some circumstances, the artists can end up in debt to the labels!
If you think this situation has changed with the introduction of downloads and streaming, think again!
:: ASK A LAWYER – BAND MANAGEMENT
:: ASK A LAWYER – BREACH OF CONTRACT
:: ASK A LAWYER – LABEL SHOPPING
:: ASK A LAWYER – P2P FILE SHARING
:: ASK A LAWYER – WHAT'S IN A NAME?
:: ASK A LAWYER – GIG CONTRACTS
:: ASK A LAWYER – STREAMING EXPLAINED
:: ASK A LAWYER – MUSIC VIDEO COPYRIGHT
:: ASK A LAWYER – THE PARODY LAW
:: ASK A LAWYER – DEVELOPMENT DEALS
Goodsell Lawyers is the only Australian music and entertainment law firm with an alliance with a leading Hollywood entertainment attorney. Goodsell Lawyers has worked with prominent US booking agents, such as Paradigm in Beverly Hills. It hasalsoworked with artists such as Chingy and T-Pain. Goodsell Lawyers is one of the only music and entertainment law firms in Australia that can offer fixed fees.
To read more about Gene Goodsell and get in contact, visit the firm’s official website: http://www.goodselllaw.com.au.
Gene tweets at: @GoodsellLawyers
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