Illustration: Jordan Moss
You probably don’t want to think about the administrative side of making music, but doing so will save you frustration in the long run.
Collaboration is at the core of making great music. You may be the songwriter, producer, performer, mixing / mastering engineer, or session musician for a project. But no matter how smoothly the creation process goes, the financial aspects of releasing music with other people can get bumpy. Using songwriting agreements to get terms down in writing early on helps relieve the tension.
In this article, we spoke with three industry professionals — a manager, an entertainment attorney, and a publishing exec turned music supervisor — to better understand how songwriting agreements and split sheets work in various situations.
What are songwriting agreements, and when do you need one?
A songwriting agreement is a legal contract. It’s a simple way to get all creative collaborators on the same page to avoid future conflicts. The most basic songwriting agreements include:
- A list of the people involved in a project (song, album, score, etc.)
- How the royalties of that project are split among collaborators
- Who owns the master rights and publishing rights to that piece of music (which is sometimes different people)
- Any limitations or guidelines around who can promote what, where
- Delivery timelines and deadlines
Nick Hanover, an artist manager who has worn many other hats within the industry, shared that his artists are often skeptical of any binding legal agreements. “They think it will ruin the magic if you assign percentages to the work at the beginning,” he reflected. He helps them see that these agreements are a tool to protect them and their work.
He also stressed that they can be changed at any time. If your collaboration evolves or more people join the project, these documents can be edited and re-signed. What’s crucial is that you have something in writing at the very beginning of an endeavor, so expectations are set and there is a record of what everyone agreed to. Nick said, “An agreement should be in place and signed before stepping into the first writing or recording session.”
Alyce Zawacki, who has an entertainment law practice in Austin, TX, knows that signing an agreement before working together isn’t always realistic. She shared, “I know it’s not always the most fun to discuss these matters upfront. People want to go in and have their collaboration flow naturally without having to think about the legal side of things. If you’re not discussing it at the start, then immediately after the session has taken place is ideal. Beyond that, those discussions need to happen before anything is released.”
Alyce has seen clients walk into a session, sign what looks like a general agreement, and later discover they’ve signed 50% of the copyright and the master away. Artists and producers should have their desired terms in mind when walking into any creative collaboration or partnership.
Delivery times are the most commonly missed elements in these agreements, in Alyce’s experience. If you need a producer to deliver your master recording by a certain date, specify that in the agreement. If they don’t deliver on time, make sure they know they’re in breach of contract, which typically (though not always) means payment can be withheld.
There are also situations that call for a work-for-hire agreement, which is a more straightforward contract. Common use cases for work-for-hire agreements are working with session musicians, mixing engineers, or mastering engineers. These players are typically paid flat fees and don’t own any of the rights to the piece of music or receive royalties. However, some artists recognize how hard it is to sustain as a session musician and will work out royalties with those who contribute to their music.
In addition to avoiding conflict with collaborators, songwriting agreements also demonstrate your professionalism to potential sync agents, music supervisors, publishers, etc. Roanna Gillespie worked in publishing with Universal and Polygram and is now a music supervisor for films like The Tree of Life and Arlo and Julie. She also teaches music business at Austin Community College.
She said, “Licensing companies will want to know that you’ve handled your business around splits and royalties. If they use a song that isn’t licensable because those details aren’t worked out, their reputation is on the line. If a licensing company sent me a song with 10% of the rights uncleared, I’ll think they’re unreliable. There are so many options out there – there are so many licensing companies, music libraries, and publishers to go to.”
What about split sheets?
A split sheet is a straightforward table that outlines who earns what royalties. A split sheet always covers the composition rights, and sometimes the master rights.
Alyce says, “Typically, the ownership percentage is the same as the royalty percentage on the composition side, but it doesn’t have to be. On the master side, it’s common for the independent artist or label (if the artist is represented) to own 100% of the master copyright and give a producer 3 – 7% of royalties. In that example, the producer is earning income based on sales but doesn’t have ownership.”
If all involved parties agree on and sign a split sheet, it will most likely hold up in court but due to it not being as detailed as a formal agreement, it won’t cover you for important potential issues such as credits and exploitation rights.
For artists who are already working with a publisher, Roanna said, “If you don’t turn in your splits to the publisher, then they can’t register the song with the PROs. They also can’t really work [pitch] the song because supervisors work on tight deadlines and need songs that can be cleared almost immediately.”
How to split your rights and royalties
Unless you have a legally-binding contract determining other terms, The U.S. Copyright Act of 1976 applies to everyone in the industry. Alyce shared, “The U.S. Copyright Act says that when two or more people collaborate on a song, they automatically have equal ownership regardless of who contributed what – if there is no other agreement in place. It’s important to get something in writing upfront because if a producer only added a small beat, the artist probably doesn’t want to share 50% with them.”
She continued, “Also, under that law, co-owners can equally exploit that copyright for non-exclusive purposes. Meaning that one party could not go get an exclusive label deal for that work, but they could license it for a non-exclusive sync placement without approval from the other party.”
Your collaboration will look different from others, which is why we suggest seeking legal council from a professional. However, we did our best to share some common split scenarios for different types of collaborations below.
In the case of a band working together, our experts unanimously suggested splitting all royalties equally. Nick pointed to R.E.M. as an example, as they’ve been publicly vocal about why they split everything evenly. He said, “Even if you’re the primary composer in the group, you might want to consider splitting everything equally with your partners if you intend on working with them for a long time. Things can get very complicated and messy.”
Roanna shared that when she was in publishing, she advised bands. “If you don’t want problems in your band, you also don’t want inequities in your band,” she tells us. “Imagine if you and that guy over there are buying a house and your bass player and drummer are living with three other people eating Top Ramen. That doesn’t build a family; it doesn’t make them feel part of it.”
Splits get more complicated in non-band collaborations. Nick pointed to one of his artists, Kady Rain, who has purchased instrumentals from SoundBetter in the past. He said those relationships tend to be more transactional, as beat makers are more interested in selling their beats than developing a song together.
With fictional numbers, he illustrated a situation where an artist might pay $1,000 for an instrumental and split the publishing royalties 50/50 with the creator of that beat. Or, they could pay $2,000 and the artist making the purchase retains all rights and control of the instrumental. In those situations, there’s room for negotiation but the base terms are clearly laid out. There’s less emotion involved in coming to an agreement.
Songwriter and performer agreements
In most cases, songwriters will find that there’s more money in publishing (writing for other artists) and writing for syncs than there is selling albums, according to Roanna. She suggests that like with a band, if the collaboration feels equal — everyone is in the room contributing — the split should be equal. You never know when two words will lead to a hook. She added, “There are situations where the most powerful person in the room — perhaps the beat maker who made the foundation of the song — can say, ‘I get 50% and y’all split the rest.’”
Producer collaboration agreements have become increasingly important as their role has become more integral in popular music.
Alyce reflected, “Previously, the producer would come in to give their opinion on the overall sound mixing and mastering process. They were there to provide some guidance to the artists. Now, a lot of the time producers are providing beats or stems or are adding lyrics and are much more involved in the creative process. When you have a producer acting in that role, they’ll usually want some ownership in the copyright of the master or composition, or want some larger royalties on the backend, which are called producer points, in order to give up part of the ownership pie.”
Nick shared, “I’m always trying to get my artists and producers to retain publishing because that’s where the real money in music is. Imagine if Beyoncé approached you with a choice of a $10,000 fee and no publishing royalties or a $100 fee with publishing. In that case, you’re way better off taking the low fee with publishing. But if it’s an emerging artist without much of a reach and you need the money, taking the bigger fee could make more sense.”
Roanna added, “The producer who makes the beat that the song is built on should establish their terms from the start. Today, a song will get passed around to tons of people and the splits can get very messy. Maybe they contributed 80% of the song but will only see 2.2% or something ridiculous. When I say that I’ve cleared songs that have had 10 – 12 writers on them where writers have 1% or 2% of a song, I’m not kidding.”
Registering with a PRO
Nick suggests all artists — but especially independent producers and instrumentalists — register with Publishing Rights Organizations (PROs) like BMI, ASCAP, or SESAC in the U.S. He said, “It gets tricky when shopping your work around because you want people to hear what you can do, but you don’t want them to steal it. A PRO will track that for you.”
He continued, “A lot of artists think it’s expensive to register your work, but it’s not in the grand scheme of things. It’s about $150 if you’re self-publishing and $250 if you’re an LLC. Copyright is a little more expensive, but they’ll help you navigate that too. We’re lucky because we have a BMI office in Austin. Pre-pandemic, I’d send my artists there and a rep walked them through the process.”
He said that with streaming, registering your work is more important than ever. Kady Rain had an occurrence where a song blew up in Malaysia because it was added to a program played in malls. Once they tracked down where all these new fans heard her music, they discovered she had all this money waiting in an account she needed to claim.
He shared, “I’ve read there’s something like $2.5 billion in unclaimed royalties [referred to as ‘black box royalties’] that are just lying around. If you register with them, you’ll learn about that money your music could be earning.” However, PROs only collect income from performance royalties. To collect your mechanical royalties, you’d need a partner like the Harry Fox Agency.
Roanna said, “The only way you can earn performance income is by being signed up with a PRO. Or, if you’re an independent artist releasing your music with Tunecore or CD Baby and you’re not signed up with a PRO, they will still collect your performance income for you in certain mediums. But, I always tell songwriters the first thing you should do is meet with a writer rep at a PRO.”
We know this side of the industry can be… frustrating. Hopefully, we’ll see new solutions in the near future.
Entertainment lawyers (generally) want to help the indies
You can hire an entertainment attorney to draw up generic songwriting agreements for an affordable rate. They’ll charge you a flat fee or by the hour for a more complex collaboration. If you’re a big artist with tons of collaborations and sync deals, you’d probably have an attorney on retainer. But if you’re just getting started, you can find someone local who’ll want to help set you up for success without bleeding you dry.
Ask other local artists who they use. There will always be people who’ll take advantage of others, but word of mouth is a great place to start in finding someone you can trust.
International songwriting agreements
Working with copyrights in different countries adds another layer of complexity. In those cases, it’s best to turn to the experts. If you don’t have a label, publisher, or manager working with you, find an attorney who can negotiate with your collaborator’s representatives in their market. International law is one of those things you don’t want to risk navigating alone.
There’s a lot to learn about publishing, royalties, and copyright as an artist. People often suggest the book All You Need to Know About the Music Business by Donald S. Passman as a starting point. Aside from that, consider a free consultant with a local entertainment attorney or ask your fellow creators about their experiences.
Do you have a favorite music business resource? Share it in the comments below!
January 14, 2021