Music and the law …

Latin Beat Magazine, Oct, 2005 by Fernando Ramírez

Fernando Ramírez is an attorney in private practice. His work includes transactional entertainment law for individual talent and business clients.

Ramírez drafts, reviews, and/or negotiates industry agreements, and advises clients on copyright, trademark, contracts, privacy, and business formation matters. His clients include film makers, media personalities, screenwriters, music producers, composers, singer/songwriters, personal managers, and independent labels. He has been a guest lecturer or panelist on legal matters concerning filmmakers and individuals in the film and television industries at colleges, universities, film festivals and conferences.

Ramírez graduated from Fordham University and earned his law degree from Brooklyn Law School. He resides in New York City with his wife and son. Tel. (212) 254-4010/Fax (212) 254-0104

E-mail framirezlaw@msn.com

This column will appear in every issue of Latin Beat Magazine as a service to those in the business of music.

"Keep your publishing!!!" That's what every artist hears he or she should do when signing a record deal. Most artists don't know why, except that they know music publishing has something to do with the potential to earn more money from use of a song. It has become a bit of an urban myth, but a few years ago, it was rumored that a then chart-breaking rapper had signed away his publishing rights to a then up-and-coming record executive, in exchange for a few thousand dollars in the form of a recording contract advance. Those publishing rights have since generated millions for the record executive, and nothing for the artist.

For the record, ASCAP and BMI are not publishing companies. There's more to music publishing than just registering with ASCAP and BMI. EMI, Warner/Chappell, and Cherry Lane are examples of music publishers. Music publishing is a multibillion-dollar worldwide industry. Publishing rights to your songs can be licensed, sold or used as collateral on a loan. For example, the song Happy Birthday To You generates an estimated $2 million per year in licensing fees; Michael Jackson acquired the Beatles song catalog in 1985 for $47.5 million; and Isaac Hayes used his publishing royalties, for various songs he wrote between 1968 and 1974, as collateral on a $1.5 million bank loan.

A good music publisher works with or on behalf of composers and lyricists (songwriters) to get other individuals or companies in the entertainment, recreational, and service industries to use their songs in exchange for a lee. Once the songs are used, music publishers are then responsible for collecting "royalties" or licensing fees, and disbursing the money earned from use or exploitation of the songs. The money collected by the publisher is "split" with the songwriter. In basic terms, every time you hear a song on the radio, on film or television soundtracks, in video games, on commercials, at the airport, online (internet), or in ring tones on mobile phones, the individual or company who "owns" the publishing rights to the musical composition (even if the song is an instrumental with no lyrics), should be collecting royalties or fees.

The following is a brief review of the major sources of money for music publishing. The terms may be a little "stiff," but having a basic understanding will help when we review publishing agreements with further detail in upcoming Latin Beat issues.

Mechanical Income: Paid for using the composition on records, tapes, and CDs (i.e., paid by a record label).

Performance Income: Paid by television stations, radio stations, restaurants, concert halls, etc, for use of the composition as part of a public performance. This is usually where ASCAP, BMI or SESAC (referred to as performing rights societies and not publishing companies), generally come in to collect fees on behalf of the songwriters and/or music publishers.

Synchronization Income: Income earned from use of the composition in motion pictures. The money is earned by way of a synchronization license (a "synch" license), which allows the person or company licensing the composition to use it in a film, television program, or music video.

Print Income: Income earned by printing copies of compositions such as in sheet music, lyrics in books or magazine articles, and on web sites.

Foreign Income: Income earned from sources outside the U.S. and Canada, by way of a Subpublishing Agreement (which we'll touch on shortly).

New Media Income: Income earned from downloads and phone ring tones.

There are several types of publishing agreements. Here's an abridged overview:

Songwriter Agreements: The agreements come in two forms, the Single Song Agreement and the Exclusive Songwriter Agreement. The Single Song Agreement allows the publisher to acquire one or more individual compositions from a songwriter, whereas the Exclusive Songwriter Agreement allows the publisher to acquire all the songs written by the songwriter for a specified number of years. The publisher acquires 100% of the copyright ownership, administers (i.e., issues licenses and collects income) for 100% of the copyright, and then accounts and pays the songwriter, per specified royalties.