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Congratulations! The long hours spent over perfecting your song, networking with producers in the industry, and pouring your heart and soul into your dream are all worth it now because you’ve just garnered interest from a record label. Success is so close you can almost taste it, but this is a big decision you shouldn’t make hastily. From TLC to Taylor Swift, there are countless stories of major artists who have been bound to unfair contracts with their record label, and you don’t want to make the same mistakes.
Before signing on the dotted line, here are five details you need to consider.
1. Negotiate your terms
Contracts are meant to be negotiated, and record labels expect revisions. A lot of new artists don’t realize this and will accept the original draft. Do the numbers match your expectations? This is your chance to negotiate any details you aren’t willing to commit to. Don’t let this opportunity go because you may regret it down the line. Come back with a counteroffer and go from there. After all, this is your music and your music career, and you don’t want to compromise the integrity of your work just so someone else can make money off it. A contract is a partnership, and it must be mutually beneficial for everyone involved for there to be any chance of it leading to a long-lasting, profitable relationship.
2. Don’t skip out on a lawyer
You should always obtain legal counsel before entering into a binding agreement. Signing to a label is a big deal, and it may determine the trajectory of the rest of your career— don’t take it lightly. Lawyers are there to protect you and your work and to be your advocate. Contracts typically have legalese and other jargon that are difficult to understand that may purposely trip up the reader. Entertainment attorneys wear many hats, from facilitating negotiations and protecting intellectual property to managing and litigating should anything go south.
3. Include an audit provision
When you get into a partnership with a record label, you are putting a great deal of trust in them, and they have the power when it comes to being paid. Unfortunately, you can’t always be certain it’s 100% transparent about sales volume and royalty payments. That’s why it’s a smart idea to have an audit provision in your contract. The typical audit provision gives the artist the ability to hire a third-party auditor to go through the record label's books and records and make sure they're paying the artist what they are entitled to under the contract. Unless there’s a clause that states the label must pay for the audit if a large discrepancy is found, you will typically have to pay for it.
4. Retain your creative control
Your work and creative freedom are one of your most important assets— it’s what got you to where you are. Though signing a record deal is an exciting and meaningful experience, one of the biggest negative connotations is that artists are often asked to give up some of their creative freedom. You may find that your input will be limited on decisions like publishing, recording budget, remixes, style, partnerships, and much more. To combat this, work to obtain a right of consultation to retain some creative control.
5. Is the label investing in you?
Try to get as much clarity as possible on this, in terms of budget commitments and whether they’re looking out for your best interests. They might hold back on actual figures but try to get a sense of whether they’re willing to invest in you. This is where you’ll need a skilled entertainment lawyer advocating on your behalf.
Contact Ford & Friedman for legal advice from our entertainment and media attorneys by calling (702) 904-9898.