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Home / Clients / Blog / Record Deals and how to successfully negotiate with labels
Peter Pegasiou
Peter Pegasiou • 8 Sep 2022
Solicitor

Record Deals and how to successfully negotiate with labels

  • Legal Advice
  • Musicians

How to navigate a record deal: A few tips

The record deal has become an incredibly sought after milestone in the career of a modern musician, and for good reason too.

A record deal (also known as a recording contract) is a legally binding agreement between an artist or group, and a record label (“Label”). The desirability comes from the fact that the Label will often fund the creation, distribution, and promotion of a number of songs, agreeing to pay to the artist a royalty rate for the term of the agreement. For upcoming artists, this lifts a huge burden from their backs, as they are given the opportunity to be create a record, that they might not have otherwise been able to afford.

The many variations of these deals play a huge role in the music industry. But when the time finally arrives, and an artist or group is presented a record deal, it is essential that its contents are understood before signing.

It is always advised that a solicitor is instructed to review the contract before signing, advise the artist and negotiate any necessary alterations. However, it is beneficial for the artist to understand the following parts of the contract prior to instructing a solicitor.

Term Length

This relates to the duration of the contract. The record Label will usually want a longer period, with the artist preferring a shorter term. This is because the Label needs ample time to recoup its costs in relation to the records that it has funded, and the artist will want the ability to get out if things aren’t quite going to plan.

Territory

This is where the music will be released. This could be the UK, another country, or be the entire world. However, it is essential that the record Label upholds their part of the agreement, and that if the territory is the entire world, then the music is released across the entire world. And if not, there should be wording to ensure that any copyright reverts back to the artist.

Ownership of the Recordings

This will depend on whether the recordings have been funded by the record Label, or by the artist. If they have been funded by the Label, then the Label will own the copyright in the recordings. If funded by the artist, then the artist will own the copyright in the recordings. Generally, it is preferable for the artist to only licence them to the Label, rather than assigning the copyright, which would transfer its ownership to the Label.

Royalty Rates

This is the percentage of money that the artist will receive when the copyright within the recordings is exploited. As expected, the artist will want as high a royalty rate as possible, but it is expected that the Label will take a higher percentage than the artist in order to recoup their costs, except in rare circumstances where the artist is extremely popular.

It should be noted that every term in a record deal is important, and that this article does not constitute an ‘all you need to know’ guide to this type of agreement; legal counsel is highly recommended before signing a record deal. If you need advice or assistance in relation to any type of music-related contract, please do not hesitate to reach out.

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