By Bruce E. Colfin and Jeffrey E. Jacobson.
The Executive Producer of a recording project is either the financier, or the party responsible to oversee the production. He or she may be the responsible A&R representative from the label, the artist performing on the recording, or the head of the production company. The executive producer usually has a particular “sound” or style in mind for the finished recording. He or she generally coordinates all the various elements of the recording process, choosing the creative elements, including the artists, session players, non-featured sidemen, and will generally select the actual producer of each recorded composition.
The actual producer of a master recording is in a position somewhat analogous to the director of a motion picture. The producer directs the recording process and artists, assisted by technicians and engineers. As a director is hired to put his personal imprint on a film, a producer is often hired to put his personal “sound” on a recording. They are both “authors” (or “coauthors”) of the creative work.
It is essential that the producer be under contract. In order to release a sound recording to the public the production company must receive certain rights in the master recording from the producer. In addition, the producer will be obligated to perform other services customarily rendered in the record industry. These include submitting musician’s contracts, union reports for recording sessions, label copy, liner notes and credits to the recording label, as well as obtaining consent or clearance for any material which is not “controlled” (i.e., owned) by the artist or producer, such as the use of unauthorized samples. The producer is usually responsible delivery of the master in a particular technical recording format, of commercially and technically acceptable material. The executive producer should reserve the right to demand that the producer re-record the material until it is satisfactory. Satisfactory is generally defined in terms of “commercially satisfactory” to the high standards of the recording industry.
The producer will generally receive an advance and a royalty for granting over to the production company (or label) his rights to the master recording. Quite often, if the producer has creative input, he or she may also be the songwriter, composer, or co-writer of the song featured on the master recording. In these instances certain other rights such as mechanical licenses and synchronization licenses must be obtained (see our past articles). The producer may be responsible for the recording of one tune, or for a number of compositions. Unless all the compositions on a release have been produced by the producer, he or she will usually receive a pro-rata amount of the base royalty. This pro-rata amount is computed based upon the number of cuts produced for the entire album divided by the total number of cuts appearing on the release. If the producer has some clout, he or she may seek “A” side protection. In the event that a song appears on the “A” side of a single, the producer will usually receive the full royalty rate.
Depending upon who the Producer has contracted with, they may seek a “right of first refusal” to produce additional material by the featured artist, or for the production company. This may not be possible if the intent of the production company or artist is to obtain a major label recording and distribution agreement. The producer may be subject to the approval and ongoing supervision of a label’s A&R department, which may reserve the right to replace the producer, or the label may have their own choice of producer in mind.
As the budget for recording can vary greatly, so will the producer’s control. In some instances, a producer may be paid an “all in” advance, in which case he would be in control of, and responsible for the entire recording budget. The label or executive producer may choose to dole out the budget to the producer in three or four installments, pay in one lump sum, either upon completion of or delivery of the master, or may pay the direct production expenses (through “purchase order”).
If the production budget is “all in,” the producer will usually be responsible for all the costs. These may include studio time, musicians’ fees, union payments, tape editing, mixing and remixing. Since the record label typically seeks to have any advances paid to a party to be recoupable from that party’s royalties, in such an event the producer should earmark some of the “all in” advance money as production costs, and some as a producer’s fee. If the budget is all in, the producer should insist that the production costs, other than his fee for services rendered, be recoupable from the artist’s royalties and not the producer’s. If this is not possible, the producer has an added incentive to control costs and stay within the budget.
A producer’s royalty will typically fall between two and six percent (2-6%) of retail price, as adjusted by contract. The average seems to be three (3%) percent. Royalties payable to a producer will not generally become due until all recording costs are recouped. It can be years before a producer will receive royalties, even on a highly successful project. Most production companies pay royalties to artists only for sales of product after recoupment. They seek similar language in producer’s contracts. Quite often the production company, and label, will agree to pay the producer his royalties, retroactively to record one, after recoupment of all production costs.
An essential clause to obtain in a production contract with a label or an artist is one which gives the producer the right to audit accountings and the right to receive royalty statements regularly, and payment if any. In some instances a producer may have the right to audit the label’s accountings as well, but this does not occur often.
If a producer has an ongoing relationship with a production company, or an exclusive agreement, it is essential that one advance is not cross-collateralized with other accounts which he or she has with the same company, thus prohibiting a label from paying for their failures from other successes.
Finally, and not to be overlooked, it is important that a producer receive appropriate “producer” credit on all recordings which embody the master recording, liner notes, as well as all promotional and publicity materials. In circumstances where a producer’s name and “sound” are highly valued, the use of the producer’s name in advertisements may become a negotiating point. The producer should specify the exact credit desired in the contract. The production company and/or manufacturing label will want to limit their liability with regard to credit. The agreement will usually contain language stating that the inadvertent failure to include the appropriate credit would not be a material breach. In other words, a label may stipulate that they will use their “best efforts” to ensure the manufacturer prints the proper producer credit. This clause is generally coupled with another one states that an inadvertent credit omission will not constitute a material reach of the production agreement.
Remember, although the basic framework for production contracts are generally similar, such contracts can vary greatly depending on the bargaining power of the parties, the party hiring the producer, and the extent of the producer’s involvement in a given project.
© 2008 Jacobson & Colfin, P.C.,