Universaluv said:

That's right, but he still can sign artists to NPG records in a "free" way, let them record their songs at paisley, then promote their albums through the NPGMC and when they hit... let the majors visit and make a distribution deal (no artists contract).

ELBOOGY said:

Prince shouldn't have taken the 100M. But because he did and only later started to ask for his masters it's not unreasonable from WB to refuse that. They were not legally obligated to do that because he gave them ownership. Morally it seems pretty wrong to ask your masters (source of income for the record company) back when you just signed a contract worth 100M.

BlaqueKnight said:

Yeah, but because so many young dreamers think it's that easy we get many crap artists who sell out to produce so much crap music.

Revolution said:

Very lucky, because that is only possible by law in the US. "Soon enough" it won't be tho'. It's still 9 years before he can start procedures to get the rights to For You back. 15 years before Purple Rain and that may very well become a problem...



When young (non-established) artists come to me with a record contract offer, the offer usually states at least 2, 3 or 4 albums plus the option - for the record company only - to continue the contract (on the same terms) after that.

Of course, the contract offer states that the masters belong to the record company fully and exclusively and - of course - the artists gets very little royalties, which are - of course - fully recoupable. ("of course"because it's a standard pimp-hoe deal)

All in all: not a good contract to begin with.

The problem is: the artist WANTS to get signed and feels strongly that THIS is his/her chance. But on the other hand, s/he doesn't want to get screwed either.

Usually, I then tell them to ask for a 1 album deal, with an option for a second album (which needs to be excercised by the record company within a year after the release of the first album). This ensures that the artists will not be under contract longer than 3 years. This also ensures that, when the contract is terminated, the artist has a better bargaining position, if record companies are still interested. He could then go to another company, or he could go indy. In any case he is free to go and record where he wants. He will not be, when he signs the usual offered deal, without any changes.

I further - usually - don't advise young artists to ask for ownership of their masters when it's their first deal. I do explain to them that this can be very important, but also that - in this stage- it will only cause laughter, or raised eyebrows at the record company and too much pressure on the negotiation process. It can easily endanger the deal you want. When it's an artist, or band who are - more or less - established already it can be more opportune to ask for it.

As for the royalties, I always advise them to ask for at least 15% of the PPD (price published to dealer), if less was offered (which it often is). If you don't ask for more they will laugh at you as well (but then behind your back) because of how you could be so stupid to agree with a super low royalty rate while your royalties are also fully recoupable.

As for recoupment clauses. Most of those are full of all the costs advanced/made by the record company in the recording, distribution and promotion process (sometimes even more and sometimes it has nothing to do with the artists recording an album). If the album sells well, the artists have to pay all of it back from their royalties. This is often the reason why artists ultimately don't make a dime, or very little, from a succesful album. Therefore these clauses are only reasonable as long as not all costs are recoupable and as long as the record company truly invests in the album. Not just with money, but also with time and energy in the promotion of the album. These clauses then usually need to be drafted more limited.



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[This message was edited Sat Aug 21 6:05:17 2004 by Abrazo]

kdj997 said:

Ooops sorry, you were talking about RE-recording...

RE-recording his albums would let him own the copyrights in those RE-recordings.


but you know 1999 the new master, right?


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[This message was edited Sat Aug 21 6:11:30 2004 by Abrazo]

Abrazo said:

Every aspiring artist on this board should read this. Abrazo just gve you a very nice amount worth of free legal consultation.

ELBOOGY said:

yea other artists have their masters...but they aint the ones trynna drop some "knowledge" in every interview....and i totally agree that u should own ur masters..BUT what good does it do u if u still livin in a one room jungle monkey cage? its like yea i own my masters but thats all what do i have to show for it? i'm bout to get evicted! its not like i can pay rent wit my masters.



exactly! cuz aint that how he did it wit chaka and larry? no contracts he just let them record and he promoted them and stuff.?



sure did...and i think its a helluva alot more helpful than all this "knowledge dropping" prince is doing.
[This message was edited Sat Aug 21 20:44:22 2004 by Moonwalkbjrain]

Abrazo said:

They did'nt give P 100million dollars. If that had happened i would agree with u. Pdid'nt see any of that money, and was trying 2 get out of the contract which i personally felt that given his status they should have done it or like i said b4 at least negotiated about doing it. They treated him like a commodity that had'nt proven himself! He was an Icon then and should have been treated with more respect!

Moonwalkbjrain said:[quote]

ELBOOGY said:

And where is all of this $$ coming from? and U expect the same Industry that's been blackballing him 2 play his new artist's music and they are not playing the hottest artist that's in the RRHOF,with the hottest tour right know. P tried that already with G. Clinton, Mavis Staples(other icons) and could'nt get no love. P would have 2 make a billion dollars b4 thinking about doin that again which i doubt that he'll ever go back 2. And i never said that a new artist should'nt sign deals.P has'nt told them not 2. He's simply stated that the most important thing 2 own is your Master copies. He has never said don't sign he's been saying don't make the same mistakes that i made. Now Abrazo's consultation was right on point. But at some point in that artist career he should b trying 2 retain ownership of his Masters. And as far as P buying his Tapes back from WB....WB did'nt even want 2 do that which really pissed P off even more!

Prince got screwed a little by WB, but they also treated him MUCH BETTER than most labels treat their artists. He got full creative control from jumpstreet - without even proving himself by selling independantly first. What other artists have had it the way Prince has? And PLEASE don't post a response on what other artists were as talented, because you would be suprised how many super-talented artists go by an A&R's desk on a weekly basis. Prince had it good with WB. He was spoiled.
[This message was edited Sun Aug 22 20:57:56 2004 by BlaqueKnight]

BlaqueKnight said:

The Diamonds&Pearls album did sell and thats y the contract&deal was offered with the 0(+> album being the 1st under the new agreement. I think that the 0(+> album did meet the retail sale requirement of 5million copies sold(Spin Mag..not 100%sure) of the new agreement
but b4 the album was released P was already trying 2 renegotiate and get out of the contract.
Yeah i agree that it was bizness done with a touch of disrespect in my opinion. We'll just agree 2 disagree on that point. But P does have 2 take the blame 4 signing on the dotted line but my feeling is that P was not just any artist on WB's. He was 1 of their top 2 Flagship Icons.

BlaqueKnight said:

I agree with u but that was under MO'Ostin's & Lenny Waronker reign. They were known as the artist friendly label. Bootsy & Zapp will vouch 4 that but in the 90's things changed 4 the worst.
I think if MO'Ostin would have stayed around longer that P might not had went in2 such a radical mode. But hey shit happens and like u said.....P is all 2 the good now!

Yeah he was spoiled, but that's what happens when u r a superstar at any profession. Peyton Manning is spoiled, John Elway, Micheal Jordan,Madonna,MJ. Life ain't never been fair when it came 2 the most talented or most loved/liked! They would'nt have spoiled him if he was'nt the truth! Look at Lebron James,Kobe,Garnett!

This was posted by a music biz attorney at soulful detroit. It will give a little more insight to an artist owning their masters.
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Fred (fred)
3-Pundit
Username: fred
Post Number: 44
Registered: 4-2004
Posted From: 152.163.252.200
Posted on Friday, August 20, 2004 - 11:22 am:

Chi, Ralph and David,

Thank you all.

I've just completed contract negotiations for a young artist. He was an absolute blank slate when it came to the record business, so the royalty breakdown I posted here was a slightly edited version of one of the tutorials I gave him so he would understand what he was getting into. (I also want him to look back in 20 years and say "Damn, that was a great first contract," because it is a great first contract, if I say so myself.) Since the question of where the money goes is one of the fundamentals, and I had my explanation at hand, I thought it made sense to post what I had already written for him, as it seemed to be the answer to the question here.

I ended up doing about 100 pages of this plain English explaining for my client (he lives about 300 miles from me and has neither a fax or a computer, so I had to put this all down on paper and mail it to him) and shared some of it with a couple lawyers and a writer or two to make sure I was not oversimplifying things or leaving critical things out. They have all encouraged me to expand on what I have done and turn it into a nuts-and-bolts contract guide for new artists. If I can find the time, I may get around to it.

The process of working with an absolute novice client was a refreshing one for me, because it made me go back and think hard about some subjects that I had come to consider “common knowledge.” Back when I started working in the entertainment world, I would often have dinner with my father, who was an engineer by training and a very practical and logical man by nature. I would explain to him what I was doing, and I knew exactly when I had crossed the looking glass into the Wonderland of entertainment law because he would simply give me a quizzical look when what I was saying no longer made sense in the real world. That always forced me to re-evaluate what I said and try to make logical sense of it. I was not always successful. Working with the new client took me back to those dinners.

Those of us on the board who deal with music and making records on a business basis have all learned the hard way that the fundamental issue is always one of control, specifically, control of the things that create income. In our Wonderland, those things are the master recordings and the music publishing. When you boil a recording contract (or any contract for services) down to its bare essence, it becomes nothing more than a contest over control.

The artist comes to the table with two things of value; potentially marketable talent, and the ability to create potentially marketable music. On the other side, the label has all the assets necessary to turn those potentials into money; the capacity to produce, manufacture, distribute and market that music. What the artist has to decide at the beginning of the negotiation is how much control over his or her music (both the recordings and the compositions themselves) in order to gain access to what the label has. The ultimate goal is to give up as little control as possible, which is never as easy as it sounds.

It has never been an even negotiation. There has always been a surplus of people who want to become recording artists, and there has always been a limited number of entities capable of fulfilling that desire. Things have changed rapidly in the last ten years, however, and the labels no longer have a monopoly on production when every garage can be a world class studio, every computer a CD manufacturing plant, and every website a potential combination record store and publicity mill. They still do some of these things better, sometimes far better, than an artist can do on their own, and they still have an advantage, but a label no longer wields absolute power in contract negotiations. The artist can always DIY and maintain complete control, even if it means limiting his or her access to potential record buyers. Some artists are happy with that limit, some want more access, and are willing to give up some of that control.

This finally brings us to Chi’s question about production deals and leased masters.

Because the artist maintains ownership of the masters and only leases them to the label for a set period of time, obviously this works to the artist’s benefit in terms of ultimate control of one of the things that makes money. The catch is, of course, because the label is getting less in the way of control than they would under a straight royalty recording contract, they are usually willing to give less money in return, and, in turn, with less of an investment, there may not be the same commitment to distribute and market the leased masters, especially in a situation where the leased masters have to compete with wholly owned masters for limited marketing funds at the label. It is only natural that they would spend money first promoting something they own over something you own. If you can actually negotiate a promotion budget in the lease, you can avoid a lot of this, but that usually doesn’t happen.

There is also one very critical problem with the usual lease agreement. In such a deal, it is not unusual for the label to provide an advance to the artist, but collateralize that advance by a lien on the masters themselves. In a straight royalty contract, advances are only against future royalties, and if a record doesn’t recoup, the label (and the artist) are just stuck with red ink. In a collateralized lease arrangement, if the leased records don’t recoup the advance, the label can foreclose on the lien and take ownership of the masters. In a nutshell, this is how MCA got the entire Chess catalog, and if it can be done at that level, it certainly can be done on an individual artist level.

Still, I like production deals and leased masters in the right situation, which usually involves a young band with a good fan base, who tour hard and long, and who can live and work on the cheap. If they get the promotional assistance from the label that allows them to reach a broader audience, both sides can win. The trick, as always, is to keep a close eye on the label’s books.

Abrazo said:

Yeah. It must suck to be required to be good at what you do to make a living out of it. Especially if it's the dream profession of seven billion youngsters around the world.

... and not care much for fame? Well, goddang. Why get into playing an instrument in the first place then?

Good post though

Moonwalkbjrain said:

I don't think he had "no" contracts with Chaka and Larry. But it does seem they both only had a deal for one album and then were free to go again.

As for ownership of their masters: the copyright notice on the CD's says they belong to NPG, so ... it probably wasn't "free" in that sense either (altho'the copyright notice is only an indication of who the copyright belongs to...)

Abrazo said:

well the way HE explained it it was all no contracts.

ELBOOGY said:

No, of course they didn't give him a cheque worth 100M when he signed the contract. But the contract did have a potential worth of 100M if Prince would sell enough copies of each album.

He didn't, so the the contract got worth less and less and therefore became less attractive for Prince to fulfill.

That is not to say - like you say - that "Prince didn't see any of that money", because he did. The contract was for 6 albums. For each album he had a right to get millions of dollars in advances. He delivered all albums.

Both WB and Prince didn't treat eachother with respect, as far as I can tell...

Moonwalkbjrain said:

You know, maybe he meant: no contracts in writing. Cuz, you can also orally agree with someone to produce and distribute an album.

In any case, I doubt it very much and think Prince only said that, because he would look like a hypocrite if he didn't.

ELBOOGY said:

I agree with that when that is what the artist really wants and really can...



Maybe P didn't offer them enough money?

Nobody knows I guess...

cranshaw62 said:[quote]This was posted by a music biz attorney at soulful detroit. It will give a little more insight to an artist owning their masters.
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Fred (fred)
3-Pundit
Username: fred
Post Number: 44
Registered: 4-2004
Posted From: 152.163.252.200
Posted on Friday, August 20, 2004 - 11:22 am:



Spot on. Tho' for clarity reasons I would add that it becomes nothing more than a contest over control (copyrights), because with control (copyrights) you can make the most money.



Indeed, never easy and often impossible as far as the record company is concerned.

As for publishing rights; Artists should always keep their publishing rights, no matter whether it is their first or fourth contract. Don't ever sell your publishing rights.

Masters are a different story, because the record company needs/wants those to keep the cash flowing (and gain their advances back) and won't like to give you a (new) contract if you don't let them.



Therefore: only artists with a strong bargaining position have the best chances to get 1) a contract, 2) make good money AND 3) keep their masters.



Spot on again and therefore reason nr. 2 that - only artist who sell well anyway - have the best chances to profit from - what Fred here calls - a "master's lease" (which I don't agree should be the term used here, instead I would call it "a masters copyright license", but that aside... )



The lesson that can be learned from this: if you own your masters don't sign any clauses that can, or will, obligate you to transfer the copyrights in your masters to the company.



To do that, the artist needs a clause that allows him to check upon the books of the record company. This is "normal" - in record company land at least - but it is not something the label likes ...



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[This message was edited Wed Aug 25 5:21:10 2004 by Abrazo]

Novabreaker said:

The funny thing is that the record companies no longer seem to require that from artists. Instead they seem to require more and more that you must be a dumbass one day fly, who loves to be pimped for a while and then trashed in the garbage can.


Not care too much about fame is what I said... there is a difference...



thanks.

Great thread.It's an individual journey.Prince has worked about 30 years to get the stature he presently enjoys, and a lot of people couldn't have done it 'His Way'.This is not a situation that happens over night.Very few Artist's own the rights to there masters.Strong personalities such as Frank Zappa started the ball rolling a long time ago and didn't succeed(God Bless Frank). David Bowie owns His. But because of the many reasons stated above; like being a musician with no money to promote yourself,or tooling up for production of Cd's, means you've got to go to 'the man'. Heard of the "Beatles"...MJ's got their right's ..yeh?! Prince is a unique entrepeneur, only a hand full of muso's have worked their way up the pyramid to the grace of ultimate control.

Abrazo said:

That's what i'm saying Abrazo. I spoke with Londell McMillan at the Xenaphobia Celly and he said that they(WB) did'nt even want 2 negotiate about P possibly buying his Masters back which is y isay that's some disrespectful shit 2 an artist of P's stature. I see y P is just fed up with they ass's! And like i said b4 i really think that MO'OSTIN would have at least done that 4 P. But these new heartless sob's are'nt shit over at WB.

I must say that the comments all of you have made about the nature of the biz is valid. This forum discussion was very informative and all talanted artists should get it a look.