This Article Originally Published July 2001
by Jeffrey & Todd Brabec
Since the music and entertainment businesses are extremely complex, it is in many cases extremely wise for a writer to find a full-service major music publisher to handle the everyday administrative duties involved in protecting and promoting his or her songs as well as licensing, collecting, auditing, and processing the income those songs generate. One of the main differences between the co-publishing agreement and the administration agreement is that the songwriter (through a publishing company that he or she owns) retains full copyright ownership of all songs.
Fees Charged for Administrative Services
Depending on the bargaining power of the writer and the services being offered by the administrating publisher, the fees charged are between 10% and 25% of all income collected.
For example, if the writer is looking only for the proper registration of songs with performance and mechanical rights organizations, the ½ling of copyright applications, and the dissemination of necessary information to ensure the proper collection of royalties, he or she should negotiate for lower fees. And since the administrating publisher usually pays royalties on a semiannual basis, if the catalog is generating substantial earnings, the interest on the monies being held can certainly cover a large number of costs and ensure a profit. But if the services needed include not only the above but also promotion, the recording of new demo records and tapes, the drafting of songwriter agreements, the negotiation of licenses, the securing of new usages, issuance of separate royalty statements to songwriters, and counseling as to worldwide trends or developments in the music and entertainment industries, higher fees can certainly be justified.
As there is no transfer of copyright ownership in an administration agreement, the duration is always for a specified number of years, normally with all rights (other than collection of monies earned during the contract period) reverting to the writer’s company at the end of the term. In most cases, the duration of administration arrangements is between 3 and 7 years, but depending on the needs of the parties and whether advances have been recouped, the term can be shorter or longer.
There are many variations in the territory covered by an agreement, since this area, once again, is totally negotiable. For example, most agreements cover the United States or the United States and Canada, but an agreement can entail the world or selected countries throughout the world.
Cover Records and New Uses
If a major reason for entering an administration agreement is the use of the established publisher’s creative and promotion staff, many contracts provide incentives if a new recording or motion picture/television use is secured. For example, the writer may agree to increase the fee retained by the administrating publisher from 20% to between 25% and 40% if the major publisher’s staff is responsible for convincing a recording artist to release a new version of a song. If that new version reaches the charts as the “A” side of a single, the percentage may be further increased, and if it achieves the Top 10 or Top 5, yet a further increase might be provided.</p>
As with the co-publishing agreement, advances are many times given to songwriters and their publishing companies, all of which are recoupable from their share of the income generated during the term of the agreement.
Choosing the Right Administrator
Since an administration agreement, by its very nature, is usually not a commitment for an extended period of time, many writers do not undertake the necessary research to find out which publisher is best suited for their needs. After all, many feel that if they make a mistake, it can always be rectified by going to an experienced publisher when the current agreement ends. But a great deal of damage can be done in a very short period of time and a substantial amount of money lost by being with the wrong administrator–whether it be a publisher, lawyer, manager, or other representative.
A writer or his or her representative must be aware that 2 or 3 years can, in the wrong hands, create a lifetime of problems and that any decision should be made only after extensive research on the reputation, personnel, and capabilities of the company being chosen to act as administrator, regardless of the amount of up-front advance money that may be offered to secure the deal.
Copyright 2002 Jeff Brabec, Todd Brabec
This article is based on information contained in the new, revised paperback edition of the book “Music, Money, And Success: The Insider’s Guide To Making Money In The Music Industry” written by Jeffrey Brabec and Todd Brabec (Published by Schirmer Trade Books/Music Sales/435 pages). Click Here to buy this book.