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Need soundtrack deal advice

Discussion in 'Band Management [BG]' started by gsys, Jan 4, 2006.

  1. There’s a guy who wants to use 3 tracks off my band's CD on the soundtrack to a horror movie he’s shot. He seems to think that it will make a good chunk of change and wants to cut us in for a half a percent of the gross or something. I’m skeptical, but I think it would be good exposure for the band. However, I’m not sure what is considered normal for soundtracks and such, and the rest of my band doesn’t have much experience in this area either. We’re wondering if maybe we should only let him use two songs, and ask for more money if he wants to use three, or have some kind of flat monetary guarantee with the deal.

    Also, we haven’t set ourselves up as a business or done anything in that regard. How will this affect our ability to sign a contract? Would there be some benefit to formalizing the band as some kind of legal entity or whatever as far as something like this is concerned?

    Finally, I see this as a situation where it would be more or less impossible to get screwed over in a really bad way, but are is there anything I should watch out for? Maybe like signing away too broadly rights to use the material?

    Thanks in advance for any advice you guys might have.
  2. sirnoahthepure


    Oct 2, 2005
    I only know that for tax purposes and for splitting up the money

    You should apply and get a business license

    Also sign a contract stating that he is just using the music for the film and that you still keep ownership of the music.
  3. JimmyM


    Apr 11, 2005
    Apopka, FL
    Endorsing: Ampeg Amps, EMG Pickups
    This situation is more or less impossible for you to get screwed unless he hits the bigtime with it, which to be totally honest is highly unlikely. I would go ahead and let him use the songs, take what he offers, and don't worry about it.
  4. Music Attorney

    Music Attorney

    Feb 22, 2004
    gsys: have you signed anything yet? I have a number of comments, but will probably make them at a later date if the situation isn't urgent.

  5. Haven't signed anything yet. The paperwork they he threw at us initially was pretty shoddy, seemed to cover his ass more than ours, and didn’t look much like the combined synchronization and master use licenses I found online. I’m talking to him sometime tonight to let him know that the language and structure is going to need some major revision.
  6. BassChuck


    Nov 15, 2005
    Whatever deal you end up making with him, get it in writing and pay to have a contract lawyer look it over.

    Contrary to popular thought, friends DO get things in writing and make it legal. (it helps protect the friendship too)

    Or... you could call Sir Paul and see if he has any thoughts on this.
  7. Music Attorney

    Music Attorney

    Feb 22, 2004
    gsys: If you feel like posting the license, I'll take a quick look at it. Hopefully, it's in a Word doc and you can just cut and paste the text. I certainly understand if you don't want to post it, but I don't want to review it off line because I think the analysis might be helpful to others.

    That said, my short response is this:

    1. If it's really a percentage of gross (as opposed to some form of royalty after recoupment) and there's some chance they'll actually account to you, then that's not a bad start.

    2. Generally, exposure = good with obvious caveats.

    3. Hard for me to comment on what type of compensation you should ask for because I have no sense of the economics of the deal (e.g., costs vs anticipated sales, margins, etc.), the leverage and/or motivation of the parties, etc.

    4. My gut tells me it's unlikely a business entity would be useful for you at this point unless some CPA can show you the tax benefits of doing so or you think you need to incorporate to protect personal/band assets from lawsuits (e.g., think "Great White").

    5. Your concern about a broad grant of rights (which is sometimes not so obvious) is exactly why you need someone to review the license.

  8. Thanks for the excellent and expert advice everybody. These are the two things that’ve been sent:

    I’ve got the impression that the person I’m dealing with hasn’t had a lot of experience in this area, although I don’t think he’s too concerned about my band’s interests either. I basically told him that this wouldn’t do and that I was going to put together something different and see if it was okay with him.

    Something along the lines of: (gratuitous linkage to pdf format ahead)

    sample, but for TV:
    sample, but for synchronization only:

    And then run it by an entertainment attorney or some such. We’re not so much concerned about the money as we are about giving away rights galore.

    Financially speaking, I think we’re talking medium/small potatoes. The budget is around 60k or so, and it’s probably going straight to DVD.
  9. Music Attorney

    Music Attorney

    Feb 22, 2004
    Ugh… IMO, the paperwork is close to useless.

    The Equity Agreement, in particular, is a joke. To my mind, the “net profit” language is woefully inadequate. Even with qualified professionals involved, net profit definitions can be squirrelly little critters. You may recall that after the movie Forrest Gump had $660,000,000 in world-wide ticket sales, Paramount Pictures was still claiming a loss of $62,000,000 on the film. I realize this is a different situation, but you get the idea. And, in some sense, you could argue the ambiguity cuts in your favor, but I’m not a big fan of that approach.

    All of the licenses you linked to are vastly superior to the paperwork being presented to you. However, they all need work. In particular, you are going to need to get clarity on exactly what the formula is that the film producers have in mind regarding compensation. The Equity Agreement says “.5% (one half of one percent) of net profit (after expenses).” I have no idea what that means. Is it .5% of the “net profit (after expenses)” from sales of the movie and/or licensing fees and/or sales of a sound track album and/or…? What costs need to be recouped before you get paid? I assume when you say they want to use 3 songs on the soundtrack you mean an album soundtrack, correct? If so, is revenue from sales of the soundtrack album used to recoup costs of the film.

    Also, you were justified in your concern regarding the grant of rights. Find out exactly what they need/want to do with the music (e.g., in the film, on albums, on DVDs and videos, ringtones, etc.), and, if acceptable to you, limit the grant of rights to those specific uses.

    I had hoped I could be more helpful, but there just isn’t enough information here for me to go on. Try to get some clarity.

  10. So if anybody cares, here's the draft I've written out that I'll probably go with (or something like it) It's not great, but I think it'll probably suffice as far as not signing my life away:


    This “Agreement” entered into as of this _____ day of _______ 20 , between Joe’s Mama’s Productions (“Licensee”) located at:_________ and Joe’s Mama’s Band (“Licensor”), located at: ___________

    The parties hereby agree as follows:

    Compositions: The “Compositions” are entitled “Joe’s Mama”, “Joe’s Mama plays basketball”, and “Joe’s Mama like pepperoni pizza”, all written and published by Joe’s Mama’s Band.

    Recordings: The “Recordings” are the Recordings of the Compositions embodying the performances of Joe’s Mama’s Band.

    Film: The “Film” is the motion picture being produced by the Licensee entitled “Joe’s Mama, The Movie” as of the date of this Agreement.

    Grant of Rights: Subject to the provisions of this Agreement, Licensor hereby irrevocably licenses and grants to Licensee the non-exclusive right to perform publicly, either for profit or non-profit, and to authorize others so to perform the Compositions and Recordings only in synchronization or timed relationship to the Film and trailers thereof, throughout the universe in perpetuity in any media now known or hereinafter devised.

    Limitations on Rights: The rights herein expressly do not include the right to record, arrange, reproduce, perform, distribute, or otherwise use or exploit either the Compositions or the Recordings in any manner separately or independently of the production or marketing of the Picture. All rights not explicitly granted to the Licensee in this license are reserved exclusively by the Licensor. Any use of either the Composition or the Master in a soundtrack album derived from the Picture shall be subject to a separate written agreement to be negotiated in good faith between the parties. All rights of every kind and nature in the Composition(s)/Recording(s) not specifically granted to Licensee in this Agreement are reserved by Licensor.

    Compensation/Consideration: Licensor shall be compensated a flat fee in the amount of $1.50 (one dollar and fifty cents), $0.02 (two cents) to be paid upon execution of the Agreement. In addition to the aforementioned flat fee, Licensor shall receive from Licensee .5% (one half of one percent) of all net profits earned during a period of no less than ten years from licensing and sales of the Film after recoupment of production and promotion expenses.

    Licensor shall receive credit as Licensor substantially as follows: “Songs by Joe’s Mama’s Band” or “Nifty super-cool music contributed by Joe’s Mama’s Band” in the opening and closing credits. Size, type, style, placement and duration shall be determined by Licensee.
    Licensor shall be given the above credits only in the event that the Film is produced and in the event of any inadvertent error with either credit, Licensor is not entitled to any injunctive relief. Licensee maintains all Licensor control over the Film throughout the entire course of the production.

    Representations and Warranties: Licensor represents and warrants that it has the full right, power and authority to enter into this Agreement, and that it is not currently and will not be subject to any obligation or disability which will or might prevent or interfere with Licensor fully keeping and performing all of the agreements, covenants, and conditions to be kept or performed hereunder. Licensor agrees to indemnify and hold Licensee, its parents', subsidiary's, and affiliated companies, harmless from and against all loss, liability, damage, cost, and expense, including reasonable attorneys' fees, of every kind or character suffered or incurred by reason of any breach of any representation, warranty, or agreement made by Licensee in this Agreement. Licensee will notify Licensor of each claim to which the foregoing indemnity applies promptly after Licensee has been formally advised thereof. If said warranty shall be breached in whole or in part, Licensor shall either repay to Licensee the consideration theretofore paid to Licensor by Licensee hereunder, or shall hold Licensee harmless to the extent of such consideration.

    Assignment: This license is binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto, provided that Licensee shall remain secondarily liable for the performance of its obligations hereunder in the event Licensee assigns this license or any of its rights.
    Miscellaneous: This Agreement constitutes the entire agreement between the parties hereto and cannot be modified except by a written instrument signed by both parties hereto. No waiver by either party or any failure by the other party to keep or perform any covenant or condition of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other covenant or condition. Nothing contained in this Agreement shall be construed to evidence or create a joint venture or partnership between the parties or constitute either party as the agent of the other. Should any provision of this Agreement be held to be void, invalid or inoperative, such invalidity shall not affect any other provision hereof, but the remainder of this Agreement shall be effective as though such void, invalid or inoperative provision had not been contained herein.

    In Witness whereof, the parties have executed this Agreement as of the day and year first above written.

    Signed:___________________ Date:___________________

    Signed:___________________ Date:___________________
  11. Munjibunga

    Munjibunga Total Hyper-Elite Member Gold Supporting Member

    May 6, 2000
    San Diego (when not at Groom Lake)
    Independent Contractor to Bass San Diego
    I'd go for a tenth of a percent of gross before I'd go for any percentage of net. Trust me, there will be no net profit in this venture.
  12. HA! I doubt there's be any gross in this venture for that matter!
  13. toad


    Jun 26, 2002
    I don't know this director, but having made films and worked in the industry, if he is an unknown, the chances of a $60K film seeing any net profits is zero to nil, unless he already has a distribution deal. Yes, it's possible your band may get some exposure in film festivals, local TV stations, and if it's really marketable, DVD.

    If I were you, I would forget the percentage points. He's never going to sign away gross profits (unless he's a nut) and net profits will never be realized. That net profit language is in essence a way for him to ask you for songs for free. Can you really imagine him working out the accounting and sending you a check? Better yet, do you think if some distribution company bought his film (which is the only shot at seeing money), they would actually send you a check? More likely, they will look at the paperwork he has with you and replace the music.

    If you really want to see some money, I would work out a flat fee you can both live with and non-exclusively license the recordings out for use only with the exhibition of the film. This will put some money in your pockets and allow him to sell the film with the music. If it becomes a block buster, yes, you're potentially out money, but I can almost guarantee you it won't happen, and honestly, you probably wouldn't see the money anyway if it got to that point.

    Just make sure the language is clear that you are not signing away the rights to a soundtrack album.

    BTW--That indemnity clause in your proposed contract isn't doing you any favors the way I'm reading it. But I guess he may not be able to sell the film+music without it.