First published in Drum Media, 1999.
When a record company offers you a deal it can feel like you've finally made it. You may want to sign whatever they put in front of you. But don?t be pressured. All contracts should be negotiated and understood before you sign. Remember, there is no such thing as a "standard" contract.
Is the company a record label? Or are they merely doing a "P&D" (pressing and distribution) deal where you record your own master? In a recording deal you provide your exclusive services to the company. In return the company records, produces, promotes and distributes your product.
Is this a management deal? Some people promise you the world...major label deals, tv, films etc. Usually this means taking your demos to other companies. This is really a management deal. In NSW, managers must be licensed and follow a code of ethics. Ring the Department of Industrial Relations Licensing Unit on (02) 9243 8884. In other states or territories ring the department of industrial relations to check if similar regulations have been introduced.
What is the record company's reputation? This is really important. Ask around. Who else do they represent and what they have done for those other artists?
Who pays? Be wary of any deal where you pay a large up front fee. What are their obligations in return? Are they too vague? If you pay half of the recording costs, are you going to own copyright in the recording?
How long will you be tied up? You may tolerate a bad deal for one album. But what about two more? What about five more years? Scrutinise the term and any options to extend with the worst case scenario in mind. On the other hand, be aware that the record company needs time to develop your product and recoup its investment in you.
Creative control: Look at this carefully. For example, can they bring in a new "arranger" on your songs? Can they remix them without your approval?
Royalties: Understand how the royalties are calculated and what you will actually receive, particularly as companies generally "recoup" their recording costs before you see any money. Ensure that you have the right to inspect their accounts.
Remember, be patient and get legal advice before you sign anything. The music industry has a long history of deals gone bad. If you jump at the first bite, you could be cheating yourself out of the opportunity to meet the right record company.
See also Arts Law's guide to recording agreements.
