When you hear the word “deal” in today’s industry more than likely it’s a 360 deal. Commonly called “360” you’ll also hear these agreement referred to as multiple rights agreements, all rights deal or bundle agreements. Remarkably, 360 deals are nothing new, especially for record labels as they’ve been in existence for decades. Labels have always wanted artist to sign a recording contract, be in bed with a management firm affiliated with the label and sign merch deals with parent companies. Anyway you spin it these situations have 360 characteristics. What’s unique about the 360 deal today is the fact everyone feels as if they can implement multiple right contracts so somewhere these things tiptoed into the mainstream. While writing this article I’ve got a music publishing contract sitting on my desk demanding multiple rights. Publishing companies demanding 360’s entitling them to merch sales? Not to be outdone, last month I dealt with a booking agency demanding 360 rights with entitlement to record sales. In the music industry bizarre, anybody and everybody insist their expertise rises to the level of 360 status. Absurd? Maybe. Farfetched? Not really. Since much of a musician’s income comes from sources other than recorded music, why should labels be the only ones to implement multiple rights agreements? Be it old school 360 or new age 360 deals, two things have remained consistent: (1) people assume they’re non-negotiable and (2) they involve a substantial commitment by an artist.
360 deals are simply a strong-armed request. Best stated by a fellow attorney “the large print giveth and the small print taketh away.” The offering party is attempting to hedge a bet and trap artists. Multiple right deals require substantial investment so often the “non-negotiable” contract is nothing more than a label swinging for the fences in hopes the bands believe them so they can collect a higher percentage. Sorry to say most of the time this works. Further, don’t be so quick to toss labels under the bus. Most of the time out of the offering parties (i.e. – managers, labels, production companies, agents, etc.) labels bring more to the table (and naturally request more in return). Industry companies have business experience and prey on artist who don’t. If multiple rights deals were non-negotiable, I’m assuming everyone thinks Shakira and Madonna’s attorneys didn’t negotiate with Live Nation? Robbie Williams was faced with a take it or leave it type deal with EMI? I guess the tooth fairy drop these contracts on their doorstep? Let’s come back to reality – non-negotiable 360 deals are negotiated at every conceivable level. The non-negotiable approach is typically a means to get artists signing on the spot as if a label can take away all the sorrows with the quick stroke of a pen. Regardless of who’s offering, and despite the varieties 360’s have 4 consistent (yet broad) concepts that will always serve as a negotiating start point:
1. Call Out The Conflict
Enjoy incestuous relationships? Have fun with a 360 deal! Sure they sound attractive when someone tells you that all the agreements can be bundled into one. This quickly allows everyone to focus on the music/career because “hey man, we’re a one stop shop for everything you need.” Bad starting point. Essentially you’ve just been blinded with “let’s get creative and ignore business” communication. With everyone intertwined (i.e. -management, label, publisher, agent, publicist, etc.) who is keeping the checks and balance system? For example, if the label stiffs the artist, the manager (who is also employed by the label) will be unlikely to call the label on the sour situation at risk of losing his own job. In many U.S. states and foreign countries artist managers (and agents in some cases) have to fulfill a fiduciary duty to their clients. Welcome to the legal world. Once this basic standard of care becomes violated, managers (or any other respected party) have essentially violated their fiduciary duty. Bring up fiduciary concerns on the front end and I can assure you negotiations begin immediately on that so-called “non negotiable” contract.
2. Know Your Strengths
Some artists do a tremendous job selling and promoting music. Others do not. Know your strengths. Should you already have a substantial following, high record sales, sync deals, merch sales, etc. why sign a full 360 deal? Peel off the irrelevant sections in order to bifurcate a 360 into a 220, 180, 100, and so on. Build the model that works for you. This is not only realistic but it’s also good business.
3. Know Your Rights
*Unquestionably the most important aspect of 360 negotiations.
The most valuable rights an artist can possess: (a) copyrights and (b) trademarks dictate the strength of multiple right negotiations. Copyrights control so much more than artists realize. When you legally own a copyright to your work, you actually own a bundle of rights (6 to be specific). As these rights vary country by country, essentially the bundle allows the owner to the following:
• The right to dictate reproduction of the work
• The right to control derivative works
• Distribution rights
• Performance of the copyrighted work
• Display of the work publicly via film/images/etc.
• Performance by means of digital audio transmission
Take the bundle as a whole or isolate any particular portion and the owner can dictate the scope of use, time, geographical location, or purpose. Putting these concepts in motion, let’s assume BAND X receives a 360 offer from Live Nation located in The United States. In regards to the copyrighted material, BAND X can grant Live Nation distribution rights (in the U.S. only), rights to derivative works (in Finland only and then to another company for rights in The United States), performance rights of the copyrighted work (for no longer than 12 months in the U.S. – not globally), etc. Artists own the bundle of rights and they should never blindly give away the entire bundle. Negotiate by being specific about geographical locations, duration of time, and/or purpose of the work. We’ve only touched the tip of the iceberg here, as a new world of negotiation can be opened up when discussing other rights (i.e. – trademarks) publishing, bookings, or merch rights.
4. One Word Speaks Volumes – “NO”
Presented with a non-negotiable 360 deal – just say “No.” If you’re as good as you think you are, if you’re in as high demand as your friends tell you, or if venues are drooling for you to perform – reject a 360 deal. If the offering party is serious about signing you they’ll present you a second offer. If they don’t it was probably one-sided to begin with. Nothing speaks volumes more so than a rejection.
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