Dylan Butler

Deal Memo #2 Legal Issues in the Music Industry

I represent the record company, Light-Year Records.
Exclusive Artists Recording Agreement
Dear Waka Flocka Chewbacca:
LIGHT-YEAR RECORDS is pleased to set forth below our proposal regarding the
exclusive recording services of, and certain other rights relating to, Waka Flocka
Chewbacca.
1. TERM
(a) Three (3) LP firm, plus two (2) LP options.1
(b) The artist will be notified before the expiration of the current contract period if
the company chooses to exercise the option. Each option period will begin
immediately after the expiration of the prior contract period.2
2. EXCLUSIVE SERVICES
(a) The artist will be engaged exclusively to the Record Label, Light-Year
Records, for the length of the initial period and subject to extension and renewals
outlined in TERM. The exclusive services include the making of Recordings
and Records.1
3. TERRITORY
(a) The territory will be based upon the distribution channels that Light-Year
Records employs, territories including, North America, the European Union and
Japan.3
4. RECORDING COMMITMENT AND DELIVERY
(a) The artist will deliver album(s) during each contract period. Light-Year
Records will decide the scheduling and coordination of Recording Sessions.4
(b) Artist is required to deliver commercially acceptable recordings on time after
the scheduled recording sessions and within the timeframe established by LightYear Records.5
5. RECORDING PROCEDURE
(a) The artist and the company will mutually agree on the selection of the
producer and the financial terms of the artists agreement with that producer, the
selection of material (including the number of Compositions to be recorded), and
the dates and locations and studios where recording and mixing will take place. If
the artist and the company cannot reach an agreement, the companys decision
will be final.6

1

The Musicians Business and Legal Guide, 2008, page 286

The Musicians Business and Legal Guide 2008, page 287
3
http://www.copylaw.com/new_articles/final.three.html
4
The Musicians Business and Legal Guide, 2008, page 288
5
The Musicians Business and Legal Guide, 2008, page 289
6
The Musicians Business and Legal Guide, 2008, page 289
2

(b) Light-Year Records must consider material created during the recording
sessions technically and commercially satisfactory or else the company has the
power to shut down recording session.7
(c) Nothing in this agreement shall obligate Light-Year Records to continue or
permit the continuation of any recording sessions if Company reasonably
anticipates that the Recording Costs shall exceed the Authorized Budget.8
(d) Light-Year Records will own all material created or recorded during the
TERM in any Recording Sessions. Including all Master Tracks and
Recordings.9
6. GRANT OF RIGHTS
(a) All of the recordings of sound, whether or not coupled with a visual image,
recorded by the artist during the term will be the property of the company in
perpetuity for the territory. Light-Year Records will own everything the artist
records for the duration of the contract and all renewal periods.10 The company
has the exclusive right to copyright all recordings in the companys name as
author and owner of them and can secure all renewals and extensions of
copyright. Each recording will be considered a work made for hire for the
company.11
(b) Light-Year Records and all people authorized by the company have the right
to use the artists name and image for commercial purposes such as advertising,
promotion, and marketing and exploitation of the recordings created during the
contract.12
(c) Light-Year Records has the exclusive right to establish and maintain an
official artist website using the artists professional name, and the URL for this
website can be included on the artists records owned by the company and in any
advertising and marketing materials. The company is the sole and exclusive
owner of the official artist website and the content will be controlled by the
company. The artist has approval rights regarding the inclusion of any material
that is not embodied on their commercially available records including outtakes,
live performances, interviews, and pictures. After the contract period has expired,
the artist website is subject to both the artists and the companys reasonable
approval. The user data collected from the website will be shared with the artist,
such as e-mail addresses.13
(d) Light-Year Records has the right to exploit the artists work on, including but
not limited to recordings and videos, all social medias, streaming services and
digital download sites and services.14
7. ADVANCES AND RECOUPMENT
(a) For the first album, the recording fund will be a fixed amount of $50,000. For
subsequent albums, the amount of the fund will be determined by 60% of the

7

The Musicians Business and Legal Guide, 2008, page 291

Same as above
9
Same as above
10
Same as above
11
The Musicians Business and Legal Guide, 2008, page 292-293
12
The Musicians Business and Legal Guide, 2008, page 292-293
13
The Musicians Business and Legal Guide, 2008, page 292-298
14
Same as above
8

gross amount of royalties earned by the artist from the sales of the prior album.
The gross amount of artist royalties will be measured from the period up until 12
months after the date the album subject to the recording fund is actually
delivered.15 The amount of the recording fund will be recouped solely from
royalties payable to the artist.16
(b) The artist Recording Fund will be represented as Advance in the table below.
The Minimum and Maximum will be determined by 60% of previous album sales
Album
Advance
Min.
Max.
LP 1-3
$50,000
Option LP 4
60% prior album
$60,000
No more than
sales
2(min)
Option LP 5
60% prior album
$75,000
No more than
sales
2(min)
Figures and final determination of advance will be calculated and delivered before
the Recording Sessions for the next album will begin.17
(c) Any monies not recouped before the recording of the following album will be
rolled into the next albums cycle and each following cycle until advance is
recouped in full. Light-Year Records also has the right to cross-collateralize all
other earnings in which the company has investment or has to pay to artist.18
8. ARTIST AND PRODUCER ROYALTY
(a) The artists royalty rate is based on escalation of album sales, broken down
into a table below. Payments begin after fully recouping the advance and are paid
to him prospectively. It is based on the net CD price after deductions. All percent
shown below represent the percent of retail album cost after deductions, which
will in affect, be the artist royalty rate.19
LP
Base
500,000+
1,000,000+
LP 1-3
12%
12.5%
13%
Option LP 4
13%
13.5%
14%
Option LP 5
14%
14.5%
15%
(b) The producers royalty rate is a flat 3% of album retail sale price. Payments
begin after fully recouping the advance and are paid to him retrospectively. This
amount is paid out of the artists royalty.20
(c) The artist and producer royalty rate will remain at the same rate for all
subsequent albums.
9. MERCHANDISING
(a) If the artist wants to enter a deal with a third party to grant that party
merchandising rights to manufacture and sell products that embody the artists
name and likeness, the company has the right to match the terms of the deal to be

15

The Musicians Business and Legal Guide, 2008, page 302-304

The Musicians Business and Legal Guide, 2008, page 302
17
http://www.americanbar.org/content/dam/aba/administrative/entertainment_sports/materials/deal-pointproposal.authcheckdam.pdf
18
The Musicians business and Legal Guide, 2008, page 302-304
19
http://www.americanbar.org/content/dam/aba/administrative/entertainment_sports/materials/deal-pointproposal.authcheckdam.pdf
20
The Musicians Business and Legal Guide, 2008, page 308
16

no more favorable to the artist than what was already proposed. If the company
does not want to enter into an agreement with the artist on the same terms, then
the artist can enter into the agreement with the third party.21

21

The Musics Business and Legal Guide, 2008, page 348