COLUMN: Before you have your artist sign on the dotted line, what exactly is in that music contract? You could be launching their career into the stratosphere or making a mistake that will haunt both of you for the rest of your life. Many music professionals think they can just let a lawyer negotiate a contract for them and everything will work out fine. Perhaps it will; but then again, perhaps not.

At the National Association of Record Industry Professionals (www.narip.com), the thinking was that every music business professional should have the opportunity to know something about the contract negotiation process as well as the “deal points” inside the contracts themselves.

Thus was born a series called the “Art of the Music Deal.” The programs began during 2007 at NARIP chapters in Los Angeles, San Francisco, and New York and are now appearing in Phoenix, Houston and Philadelphia as new NARIP chapters have opened in those cities. The ongoing series, which features different speakers and executives in each location, follows a three-part format. The opening of each evening’s presentation covers the topic in general terms.

The middle section of each program features a mock negotiation of contract points, with professionals from the industry demonstrating how they hammer out deals that keep both sides of the negotiation happy. Or, as sometimes occurs during the spirited give-and-take of these interactions, the audience gets to see how some demands work to prevent a deal from moving forward.

Each event concludes with a question-and-answer session open to all in attendance. The questioners cover a broad range within the music industry. Expert royalty auditor Fred Wolinsky of Miller, Kaplan, Arase & Co. asked a couple of revealing questions at a recent event. Music industry consultant Thomas White usually attends the Los Angeles programs and often asks one of his patented in-depth multi-part questions. The Q-and-A draws everyone from artist managers to students, and from entertainment attorneys to signed artists.

Thus far, the Art of the Music Deal series has made multi-city presentations on such subjects as artist management agreements, producer deals, digital and independent distribution deals, marketing/licensing agreements, and record label signings.

360 Deals:

The “360 Deals” presentation at the SAE Institute in Los Angeles featured Dina LaPolt of LaPolt Law, Doug Mark of Mark Music & Media Law, and Lisa Van Zuidam, CFO and COO of Tenth Street Entertainment and the Eleven Seven Music Group.

What these people had to say about record company contracts, multiple rights deals (the actual name for “360 Deals”), and the negotiation process itself was consistently interesting. Many of us filled several pages with notes. Also of interest were the handouts, including:

* An actual record company agreement for a 360 deal (all 23 pages of it)
* Excerpt from “Meet the Millennial Generation: Fans, Brands and Cultural Communities” by Terry McBride and Brent Muhle
* “The Record Deal” by Dina LaPolt
* Royalty Calculation Charts for iTunes, Webcasting, and Public Performance
* Harry Fox Agency Rates and Licensing Procedures
* “Multiple Rights Deals in the US: 360 Degrees and Beyond” by Dina LaPolt and Bernard Resnick.

Just as a side note, Van Zuidam’s two firms represent an interesting shift in the marketplace since they are an artist management firm that has decided to function in a multi-level capacity. In addition to providing management, they are also involved with radio promotion, marketing, publicity, new media, tour production, merchandising, branding, and licensing. In other words, they act like a manager, promoter, and record label.

Producer Agreements:

The “Producer Deal” program, also at SAE, featured the quiet authority of Philip E. Daniels, Esq., head of his own L.A.-based law firm, and the expertise mixed with comedy stylings of Gary Fine of Kleinberg Lopez Cuddy & Klein. (Yes, that seems a bit flippant, but anyone who purchases the recording of this program will be able to verify that the quick wit and razor-sharp timing of Fine would have taken him quite far on the stand-up comedy circuit.) Daniels is also no slouch and their mock negotiation had the audience roaring with laughter whenever they weren’t holding their breath to take in every word of the twists and turns of the money trail.

Fine’s explanation of “legal realities vs. practical realities” was an eye-opener as he outlined a case in which someone was able to wrest a large percentage of an artist’s royalties without having done any work other than lying. Handouts at this presentation were provided by LaPolt Law and included “Negotiation of Producer Deals” and an 11-page sample Producer Agreement.

Licensing Music for Film & TV:

The “How to Market & License Music for Film & TV” presentation held at the Los Angeles Film School was so popular that people were lining up in the aisles for the Q-and-A session. This had as much to do with the quality and quantity of information that was presented as it did with the high-profile nature of the panelists.

John Houlihan is a music supervisor with 53 projects listed on the IMDB (Internet Movie Database), including such song-driven projects as “Fame,” “Mr. Holland’s Opus,” and the three “Austin Powers” films. Anita Rivas is partner in the law firm Walner & Rivas where she was associate producer of the Van’s Warped Tour 2007 DVD release and currently oversees music licensing for films, video games, home video and television. Tom Rowland is Sr. VP of Film & TV Music at Universal Music Enterprises. Once on the dark side (he worked for such questionable clients as Bob Dole, VP George Bush and the Philip Morris corporation), he now runs the film/TV division of UMG and appears to be a strong supporter of creative artists. He also works as music supervisor for Rob Zombie’s motion pictures and was producer of “The Stripped Mixes” album by Michael Jackson.

There were many excellent points made during their very lively presentation, including:

“It is important to always remember that music has intrinsic value.” – Rowland
“Music adds value to motion pictures.” – Houlihan
“Lower prices leading toward free music is a cancer eating away at my industry.” – Rowland
“Watch out for people attempting to grab onto your music publishing.” – Rivas.

Their free-wheeling back-and-forth negotiation on how a song goes from being an unknown track to appearing on the soundtrack of a motion picture was entertaining and instructive. And often quite funny.

For full disclosure, let me point out that I (Scott G) am on the Board of NARIP and am therefore naturally biased in favor of their events. But I think it can be said that there is a wealth of information available to music business professionals at the Art of the Music Deal series. Further, this site/e-magazine is a publication of Neotrope, which has sponsored NARIP events in the past.