Fair cut of royalties for friends' recordings?

[twangbuck]

Hi all, first time poster to this forum. Not sure if it's the right place, but it seemed to be the closest fit. Quick question. I'm entering into an agreement with a friend to produce/arrange/record and perform on demos of his songs. He's agreeing to sing on some of mine. We're trying to come up with an agreement that we can both live with to share royalties if either of us successfully pitches a song. We realize that will likely never happen, but we're trying to be responsible in our old age and plan for these things now just in case a miracle does happen.
We've agreed there will be no up front charges for either service, and instead we will do all we can to share contacts, attend conferences together and help each other out.
However, instead of up front payments, I do want to establish a fair cut of all revenue generated by these songs, if we ever actually see any revenue.
I've done some research on line and discovered that some real producers get as much as 20-25% of the artists' cut of royalties once songs are released.
I"m obviously not a big time producer, so I was thinking more along the lines of 10. So that would mean if he sucessfully pitches a song, I would either get 10 percent of his royalties or 10% of any one-time payment he accepts for his song(s).
I would pay him the same rate for his vocal services and networkig help (which I know is a lot).
Does my proposal for a production royalty sound fair, given our circumstances?
Keep in mind, this guy has some pretty catchy ideas for songs, but he's very raw in his musical ability, has no way of recording demos himself and doesn't want to pay for local studio time or for the services of a locally established producer.
Any thoughts are appreciated. Thanks!

 

[Steenamaroo]

Twangbuck..If I didn't know better I'd swear I wrote that post.
You describe perfectly my situation.

I work with a chap who writes his own music, but like your fella it would stop there without my involvement.
(Those aren't my words btw; They're his.)

Anyway, there are a few things to take into account.
When you say royalties, what do you mean.

The specifics depend where you are in the world but I guess the broad rules are the same.

Over here there's writer's credit which comes into play with performance royalty.
If his music and lyrics are performed (live cover or public playing/broadcast of recording), then the writers get money. (PRS in UK).
You can agree to be cut in as *% writer to get radio royalties.
You have no entitlement to this, but some people are happy to share it out on the basis that you're taking their music to the next level.

Then there is performer/contributor credit.
If the specific recording on which you were a contributing musician (or technical staff) is played, you get money. (PPL in UK)
With PPL, at least, you enter an itemised list of every instrument or technical role and take credit for whatever you/he did.


(I'm actually doing that right now for an album. In my situation I typically have about ten instruments credited to me, whereas the artist has voice and usually guitar)

PPL also ask for % ownership of specific recordings of a song - Not the lyrics/music.
By default the guy who pays for the recording then owns it (to my surprise).
Once again, you could agree a percentage here.

If you both register with the appropriate collection agencies, and both submit the same info, I don't expect there's any need for a contract.
Don't hold me to that, though.


There's also publishing credit.
Now I haven't dealt with it first hand, and as I understand it it's not an 'awarded' royalty like radio use would be.
Usually someone wants to use your music in an advert or whatever and agrees a contract with the publisher to do so.
If an artist is working as a solo operation, he can declare himself or whoever to be the publisher. (MCPS/PRS UK).
Again, you can make an agreement with the chap for a percentage of this pie.
(MCPS advise not registering until you're aware that your music has been synced or until you have been approached.)


_____________________________________
I'm outlining the different entitlements because if you're allocated, say, ownership of the recording, you wouldn't get anything from PRS for radio play, for example.

Because my contribution is so large in my projects, and because money started appearing, I asked for 100% ownership of the recording, 40/60 writing credit, and 40/60 publishing.

My first annual PPL payment comes in next week. If there's reasonable money in it, I may offer up 60% of recording ownership to make it 40/60 across the board.

I do charge for the recording sessions too but, on the flipside, I do more than my fair share of promoting this guy's music.



I stress again, I have never had any publishing dealings and I don't know the ins and outs, but I'm seeing regular PRS cheques now.

It all boils down to how valuable your guy thinks you are.
Legally speaking you're entitled to nothing except credit for your specific contributions to any given specific recording.
Hope that's useful to you.

PS: I think you're wise to get on the ball early. People can laugh but I made my agreement after the first four figures had slipped through my hands.