What are common types of music publishing contracts?
The seven (7) basic music publishing contracts are:
(1) Single Song Agreement: This type of music publishing contract is an agreement between the writer and the music publisher in which the writer grants certain rights to a publisher for one or more songs. In single song publishing contracts, the writer is paid a one-time recoupable advance.
(2) Exclusive Songwriter Agreement ("ESWA"): Under the ESWA or "staff writer" contract, the song writer generally grants all of the publisher’s share of the income to the music publisher. The writer’s services are exclusive to the music publishers for a specified period of time. Thus, any compositions written within that period belong to the music publisher. These publishing contracts are usually offered to writers with some degree of success.
With this type of music publishing contract, because writer has a track record of writing hits, the publisher feels confident that it will recoup its investment. In return for signing away exclusive rights to some or all the writer’s songs, the writer gets paid by the publisher a negotiated advance against future royalties. The advance amount naturally depends on the writer’s bargaining power and on the competition in marketplace, if any. Under a staff writer deal, the writer is paid on a weekly or quarterly basis. An ESWA can be either tied to a record contract or independent of a record contract.
(3) Co-publishing Agreement ("Co-pub"): The co-publishing ("co-pub") deal is perhaps the most common publishing contract. Under this deal, the songwriter and the music publisher are "co-owners" of the copyrights in the musical compositions. The writer becomes the "co-publisher" (i.e. co-owner) with the music publisher based on an agreed split of the royalties.
The songwriter assigns an agreed percentage to the publisher, usually (but not always), a 50/50 split. Thus, the writer conveys ½ of the publisher's share to the publisher, but retains all of writer’s share. In a typical "75/25 co-pub deal," the writer gets 100% of the song writer’s share, and 50% of the publisher’s share, or 75% of the entire copyrights, with the remaining 25% going to the publisher. Thus, when royalties are due and payable, the writer/co-publisher will receive 75% of the income, while the publisher will retain 25%.
(4) Administration Agreement ("Admin"): An administrative agreement takes place between a songwriter/publisher and an independent administrator, or between a writer/publisher and another music publisher. In an "admin deal," the songwriter self-publishes and merely licenses songs to the music publisher for a term of years and for an agreed royalty split.
Under this music publishing contract, the music publisher simply administers and exploits the copyrights for another publisher/copyright owner. Only the most popular song writers can even consider asking for an admin deal. Under this coveted arrangement, ownership of the copyright is usually not transferred to the administrator. Instead, the music publisher gets 10-20% of the gross royalties received from administering and exploiting the songs for a certain period of time and for a certain territory.
(5) Collection Agreement: A collection publishing agreement is like an administrative publishing contract where the writer retains the copyrights, except that the publisher does not perform exploitation functions; like an accountant or business manager, it merely collects and disburses available royalty income.
(6) Sub-publishing Agreement: These are basically music publishing contracts in foreign territories between a U.S. publisher and a publisher in a foreign territory. They are like admin or collection deals (with no ownership of the copyrights being transferred to the sub-publisher), but limited to one or more countries outside the U.S.
Under this music publishing contract, the publisher allows the sub-publisher to act on its behalf in certain foreign territories. Often, they are limited to a group of countries, such as European Union (EU), GAS (Germany, Austria, Switzerland), Latin America, etc.
(7) Purchase Agreement: Under this publishing contract one music publisher acquires in whole or in part the catalogue of another music publisher, sort of like a merger of companies. With this type of music publishing contract, a "due diligence" investigation is done to determine the value of the catalogue.
Reprinted with permission from Ruben Salazar, Esq. )