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Music Industry Contracts (Part 2): How to Negotiate Like a Pro 

  • 18 May 2024
  • Studio Legal

Written by Sebastian Marcu, Alyce Evans and Principal, Jennifer Tutty

A music industry contract is a binding agreement between you and another business in the music industry (such as a record label or publishing company), which grants the business the rights to commercialise your music career.

Music industry contracts include management agreements, recording agreements, master licence agreements, collaboration agreements, publishing agreements, booking agent agreements, 360 agreements, producer agreements, band partnerships and more! 

If you haven’t already realised in Part 1 of our two-part series on Music Industry Contracts (‘Music Industry Contracts: 8 Key Clauses to Watch Out For‘), music contracts can be a minefield! There are so many things to consider and watch out for. Once you understand the key clauses and legal lingo, it’s time to think about negotiating. 

Before signing any music industry contract, we recommend you follow our top tips for negotiating these contracts below.

1. Read, understand and consider the contract

Please don’t just sign a contact and think everything will be fine. Anything could be in the contract, which means this is a potential recipe for disaster. 

We recommend reading our blog: ‘Music Industry Contracts: 8 Key Clauses to Watch Out For‘, as a starting point.

Then, take a deep breath, read the contract through and let it soak in.

Once you are comfortable that you understand the contents of the contract, you will be in a better position to ask questions and negotiate. Additionally, highlight or write down any parts you don’t understand, so that you can then seek clarity on these from the other party or a lawyer.

2. Ask for expert advice

Signing a contract is a big step, which will have a significant impact on your career and your life.

Ensuring that you understand what you are signing and that you are comfortable with the terms will help you avoid future disappointment. However, contracts are often filled with legal lingo and complex clauses, making them not so easy to understand.

A music industry lawyer can help you to understand the contract, flag any risky clauses, and provide their opinion on whether it meets industry standards and aligns with your goals. This will help to inform what points you should consider negotiating.

3. Think about the future and your goals

Think long term about your music career and your goals.

Will the contract terms help you to achieve those goals, or potentially restrict them? If there are clauses that could restrict your career ambitions, consider how you may negotiate these.

4. Don’t be afraid to negotiate

Don’t be scared to ask for changes. 

If the other side want to work you, they won’t pull the deal just because you ask to negotiate and/or make some changes to the contract. 

5. Watch out for people who refuse negotiations

Following on from the above, be wary of people that refuse to negotiate or make you feel bad for getting legal advice.

Understanding your contract and negotiating where necessary is in your best interest. If the other party isn’t on board with this, you may encounter problems down the road.  

6. Take a test drive

Consider asking for the contract to be subject to a trial period, during which you can choose to end it at any point. This can help you to decide whether the arrangement works for you, before committing to a long term contract. 

After the trial period is up, the usual termination clauses will apply, such as termination for breach.  

7. Think carefully about restrictive clauses

Think about what restrictions are in the contract, and whether these are suitable. 

Consider any exclusivity clauses, assignments of rights and whether the contract term (duration) is too lengthy. There’s nothing worse than signing a contract and it negatively impacting other parts of your career (and life!).

8. Do your research on the other side’s reputation

It’s amazing how much information is available these days. With a few simple Internet searches, you can find out all sorts of things.

Before signing any contract, do your due diligence and research the other party. What is their reputation? Who do they represent? Try to talk to others that work with them before you commit. This will help you to make smart choices about whether or not to sign the contract and which terms to negotiate. 

For example, a little bit of research may uncover that they have very little experience internationally. While this is not necessarily a deal breaker, it is definitely relevant to any territory clauses in the contract. If they have limited international experience but have listed the territory as ‘the World’, it’s time to ask some questions. Enquire about their plans for you in the international market and, if necessary, negotiate to restrict the territory. 

Information is power in a negotiation. Do your research. 

9. Just like life, a contract is all about balance

Consider what the other party is bringing to the table. You are signing over certain rights in exchange for their services. What are the other side’s obligations under the contract? Are they doing enough to earn their part of the deal? 

Additionally, think about what rights you are giving them and, by extension, what you are giving up. Does this balance with the benefits you will receive? 

Once you understand each side’s position, you can make some decisions.

This can be tricky when first entering the industry, or negotiating with powerful, reputable parties. A good starting point is to consider your goals, both personally and professionally, and your values. In any negotiation, be clear about what you want and what you are willing to compromise on. 

In conclusion

Entering into new contractual arrangements is an exciting career step for anyone in the music industry. Make the most out of each opportunity by reading your contract carefully, understanding what it means and asking to negotiate where necessary.

Further Information

If you have any legal questions relating to the music industry or would like legal advice on a music industry contract, please contact us through our online form or at hello@studiolegal.com.au.

For more information on how to understand music industry contracts, check out our blog, ‘Music Industry Contracts: 8 Key Clauses to Watch Out For‘.

Published 1 December 2022

Written by Sebastian Marcu, Alyce Evans and Principal, Jennifer Tutty

Photo by Annie Spratt on Unsplash

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.