by Jeffrey and Todd Brabec
Because it can take anywhere from a number of weeks to a number of months from the time you start to negotiate a long term exclusive songwriter/co-publishing agreement to the time that the agreement is actually signed, many publishing companies use what is known as a "deal memo" or "heads of agreement" to set forth the major points of the overall agreement.

These deal memos are usually from 5 to 10 pages long with a few extra pages of exhibits (e.g., copyright assignment, letters of direction to record companies and to ASCAP or BMI, a list of existing compositions coming into the deal, etc.) and are used frequently to commit the parties quickly and enable the songwriter to receive a portion of the advance that would otherwise only be payable after the signing of the fully negotiated long-form agreement.

The obvious value of signing a deal memo is that the publisher and writer can commence their relationship immediately and money will be freed up for the writer to get his or her financial affairs in order and take some of the pressure off while the lawyers negotiate and draft all the terms of the contractual relationship.

The negative to signing such a deal memo is that you might run into a number of substantive problem areas or issues of disagreement (such as does the songwriter have the right to approve certain types of uses) during the negotiation of the long form, so that the short-form deal memo (with its inherent lack of specificity other than the major terms) might be the only document that is ever signed. This latter scenario is not common but it does occur.

Obviously, the more specific the deal memo can be on all the major points, the better. It cannot, however, be so specific and cover so many eventualities that it becomes a long-form agreement with the attendant time delays that you are trying to avoid by using the short form.

Regardless of its possible shortcomings, it can be a very valuable tool to get the relationship going quickly.

© 2006 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).

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