The Golden Rule of Music Contracts
Every contract is negotiable. The language presented to you is not the law — it is an opening position. An experienced entertainment attorney can review a contract for $300–$800 and potentially save you hundreds of thousands of dollars over a career. This is the single best investment a new artist can make.
Always get contracts in writing. Verbal agreements about who owns what, who gets paid what, and for how long are almost impossible to enforce and lead to the most destructive disputes in music. A one-page email summary of agreed terms, signed by both parties, is better than nothing.
Never sign anything under time pressure. Legitimate offers don't expire overnight. "Sign by tomorrow or the deal is gone" is either a pressure tactic or a sign of a disreputable partner.
Record Deals: The Key Clauses
Term and options: how long the deal lasts and how many albums it covers. "One album with four options" means the label can keep you for up to five albums, but you can't leave after one. Options should require the label to commit (exercise the option) within a defined window — not sit on your career indefinitely.
Recoupment: the advance is not a gift — it is a recoupable loan. You do not receive royalties until you have paid back the advance from your own royalty account. During recoupment you still earn no royalties, even if the album sells well. The label earns on every sale; you earn on none until recoupment. Make sure you understand exactly what is "cross-collateralized" (charged against other albums' royalties) and what is not.
Royalty rate: your percentage of net receipts from the masters. Rates vary from 12–25% in traditional deals. Always check: is the royalty calculated on the wholesale price or the retail price? On gross or net? "Packaging deductions" (now largely obsolete in the streaming era, but still in some contracts) and "free goods" provisions can reduce your effective rate significantly.
Reversion: if the label does not release your album within a certain period, or if it goes out of print, the rights should revert to you. This clause protects you from a label shelving your album indefinitely. Push for it in every deal.
Creative control: the contract should specify who has final approval on singles, artwork, tour commitments, and sync placements. A label with full creative control can block or alter your music without your input.
key points
- If a label asks you to form a new LLC to sign the deal, understand why. Sometimes it's routine corporate structure; sometimes it's designed to limit your ability to see the label's accounting.
- "360 deal" language can appear as a brief paragraph granting the label participation in "ancillary income." Read all definitions sections carefully.
Management Deals
A manager earns 15–20% of gross income from all sources — live, recording, publishing, endorsements, and sync. A 360 management deal is standard but scope matters: some managers carve out income generated before the management relationship, or income from deals the manager didn't help secure.
Term: most management contracts run 2–3 years with an option. Post-term commission (the "sunset clause") should reduce over time — some deals give the manager full commission for 2 years after the term ends on deals signed during the term, declining by 5% per year.
Power of attorney: managers sometimes request limited power of attorney to sign contracts on your behalf. If you grant this, it should be narrowly defined (signing venue contracts under $X, approving session bookings) and not a blanket authority.
Expenses: who pays for what? Legitimate managers front expenses (postage, photocopying, calls) against your account and recoup at the end. Be wary of a manager who asks for large upfront expense payments.
Co-Writing and Split Agreements
A split sheet is a one-page document stating who wrote what percentage of a song's master recording and publishing. Sign one for every co-write, the day you write the song — not months later when a dispute is looming.
There are two copyrights in every song: the composition (melody + lyrics, owned by the songwriter) and the master recording (owned by whoever paid for and controls the recording). You can have different splits for each. A common setup: you write and produce a track with a co-producer, split the masters 50/50 but take 70% of the publishing because you wrote the lyrics.
Be careful with "work for hire" in co-writing contexts. If someone signs a work-for-hire for their contribution to a song, they're giving up all ownership of that contribution forever. This is appropriate for session musicians playing a part, not appropriate for someone who helped write the melody.
Registration: register all co-written songs with your PRO using accurate splits. Both writers must register their own shares. If only one person registers, the other's royalties may go uncollected.
Live Performance Contracts
A venue performance agreement should specify: guaranteed fee, door split structure, the exact set length and slot, load-in/soundcheck/set time, technical rider compliance, and who controls front-of-house sound.
The deposit: for shows above $1,000, a 50% deposit on signing is standard. This protects you if the venue cancels at the last minute. Protect yourself in the same direction — include a cancellation clause specifying what you owe if you cancel (usually nothing if it's a force majeure event).
Merch percentages: some venues take 15–25% of your merch revenue ("house fee"). This is increasingly common at mid-size venues. Know this before you book and factor it into your margin calculations. Negotiate where you can; some venues waive it for emerging artists.
Technical rider: your technical requirements in writing, attached to every contract. If the venue confirms the contract and then can't provide a monitor mix or a DI box, you have contractual grounds to renegotiate the fee or cancel.