Episode 19
Contracts are Cool with Dave Ratner - Part 1
We all have been warned about the importance of contracts in our careers as musicians and I’m going to guess most of us have suffered the consequences of not heeding those warnings more than once. And yet, I’m also going to guess, somehow, many of us STILL don’t get a contract for many gigs we play. Even a simple one, as todays guest states, could protect you from not getting paid or help you get your gear replaced when the drunk guy spills his beer and falls on it.
0:00:01.5 S1: Welcome to the show that explores the methods and strategies on loan the financial side of your music business with over 40 years combined experience. Here are your host, Chris Webb and Dave take. Welcome to musicians, tape talk about musicians and money. We want you to be clear when sending, you're signing a contract for your business, what the fine print means for your fanny. I'm your host, Chris web, joined by my co-host, the man who never plays a show without his Fanny covered, Dave Damon. Take a load off Fanny first web. Take a load off. Any, I got a quote from Sam Lugano was a successful film director in Hollywood, he's Polish, Gotch. Chris, that means I love you co. Pataki means caper. Does it really... Yes. Well, why would you say catbirds? Those are the only things I had learned in published... Great-grandmother would only speak Polish, and I guess cat bird and I love you were the three things that I remember. And that's the wall. What was that Russian? I don't know. Does have no Etchers think so. If you said you could say, I love you, I could eat cat bird, which full on two things you would never say to things you number...
0:01:28.2 S1: Anyway, Samuels quote is, a verbal contract isn't worth the paper it's written on. Get it. Well, we've all been worn about the importance of contracts in our careers as musicians, and I'm going to guess most of us have suffered the consequences of not heating those warnings more than one time, and yet I'm also going to guess somehow many of us still don't get a contract for many gigs we play, even a simple one, as today's guest states could protect you from not getting paid or help you get your gear replaced when that drunk guy spills his beer and falls on it. Today, I guess, Dave Ratner covers the basics of understanding the value and terms and basic performance and royalty contracts, so that you are protected and your family is protected when the red flags are flying... I'm sorry, what contract are you saying if you're the drunk guy kills the beer and falls on it... I don't know, some sort of clause, it says, you're not responsible of when you're a drunk performer... Because you have racks there. Yeah, 10 years ago when we played in line, which I signed that contract against myself, all that and more, right after this, in 2005, but Hendricks and began working on an amplifier to fill what he saw as a void in the marketplace for a guitar amplifier designed to meet the needs of jazz guitar players who wanted a extremely high quality sound and a portable package pennant amplifiers designs and manufactures high quality analog musical instrument amplifiers in Arvada, Colorado with the 100% customer SAT is backing grantee.
0:03:15.8 S1: You really won't believe the tone coming from either your electric or acoustic guitar, any string instrument with a pick-up for that matter, not to mention the volume these beautifully made compact lightweight amps are capable of cleanly producing... I have one, I love it, it's the best amp that I have played in the last 20 years for what I need with the versatility to cover almost any kind of big... This is a must have piece of gear for the working musician. Learn more at henie dot com and enter Mt. J-10 for 10% off your purchase. Welcome back, everybody. Today's non-profit for musicians is music unites. Music Unites is the leading non-profit charity organization supporting music education around the world. He partners with music stars, celebrity ambassadors and music sponsors on music projects and even at local schools with the goal of educating kids through music, along with their music partners, this organization regularly releases news events, videos and press, some ambassadors of music units have done workshops, which include swizz beats John 4, sting Gary Clark Jr, and much, much more. Learn more at music unites dot org. Make sure you also rate and subscribe to this podcast, leave us a comment and make sure you set up for weekly newsletter that is pulling out wonderful links in extra content about the weekly topics that we'll cover.
0:04:44.8 S1: The other thing I'd like to mention is going to our website and taking a look at all the new stuff that Dave has been added on there, we have so many new resources for your consumption. Well, the nice part is that talking to these companies, they've provided us with some pretty cool deals that we could give to our listeners. Yeah, and it's easy to search for them right now as a search or search option on their years. Wow, you type in musicians tip jarno, Google. And you can't find us. Please send us an email and I'll forward that right to Chris once again. You're right. But I did find it, I just found everyone else's articles about us, I just couldn't find her. That's good, at least. Yeah. Everyone else is showing up. Well, we got a lot to talk about with today's guest, Dave Rader, but we're gonna go dive in right into the interview and then we'll put our two cents in there afterwards. So without further ado, here is our interview with entertainment lawyer, Dave red. It isn't often that you run into a band manager turned lawyer, but that's our guest today, Dave Ratner, during his career in the music and entertainment business as a tour manager, publicist band manager and founder of his own management agency, Dave learned firsthand the important legal considerations and challenges, creative professionals face, Dave channeled his passion for music and all creative arts into creative Law Network, a law firm built specifically for creative professionals, and he built a team that creative Law Network that is passionate about Arts, ensuring creative work is protected and helping creatives leverage the law to maximize the value of their work.
0:06:30.7 S1: With a BA from Cornell University and JD from the University of Denver, term College of Law. He is now, and now I'm gonna go through a few things here. An adjunct professor at the University of Denver College of Law, Executive Committee, entertainment and sports section of the Colorado Bar Association, an advisory committee chair at the Colorado attorneys of art, tab lawyer for entertainment and sports law at 52-80 magazine. Best in her team, a Lawyer Law week, Colorado, just to name of few. Welcome to the show and podcast. Dave Ratner, thank you. See, a little winded after that that... It's funny, I see, I cut some stuff out. That could...
0:07:14.5 S2: I do have a shorter version, we could really... Well.
0:07:18.7 S1: Dave, thank you so much for taking the time to be with us today. I know we met a few years back and Fort Collins on a panel talking about musicians and money back then, and each of us had a role and we've come across each other's path a show times since then, and recently I was reading contracts that you help Stonington put together. So it's nice that for me, it's nice that I get to keep running into you and have the opportunity to speak with you again.
0:07:48.8 S2: Sam here. It's a pleasure.
0:07:50.0 S1: This podcast is mostly about how musicians have to protect themselves financially, and when we first started playing gigs, these three-hour bar gigs and moving on up to more ticketed shows, we were generally excited enough about those shows that a handshake agreement was enough for us, we're like, You promised this. We promise this. Thank you so much. I didn't take very long to realize having things in writing protected all parties and probably something we should have started doing from the beginning, so if we can start with, I guess just what are some red flags to watch out for when signing the contract regarding... Just performance where money is transferred from one party to another, and from there we'll go on to some other contractual questions that we have for... So
0:08:38.9 S2: Yeah, sure, there's no short of contracts we can talk about... And I learned this day back when I was a tour manager, 'cause one of the funny things is you can have alluded to this, most of the gigs you're gonna go, you're gonna play, you're gonna get paid, you're not gonna look at that contract, but that one gig and I remember where it was and what town we were in the first time I was on the road, and this is all before I went to law school, right when I was a tour manager, and they weren't paying us what we were supposed to get paid and so that's when you need to pull out the contract. And the contract for all contracts, a partner of mine used to say a contract tells a story, but it just lay down the who, what, when, where, why? And so a performance agreement, the contract for a gig is gonna lay out the basics where you're playing when you're playing, how long you're playing, things like that, but as you said, we're talking about the finances here, so being really clear about how we calculate what you get paid, and when you get paid, 'cause they are a contract, I think it was...
0:09:47.5 S2: I believe it was Aretha, maybe re-a. Franklin got paid in cash. Before she went on stage. Like hundreds of thousands of dollars. She got paid in cash. I don't know if that's Laura, I haven't worked for her, I never worked for her, but point is, it's specific, and you want a contract to be specific, not just you'll get paid in 1000, but is there in advance... Is there a deposit? And if not, if you're getting paid day off, you get it paid immediately after the gig, or do they have 24 hours, those sorts of things are important. And how we're calculating that money 'cause expenses, as you know, as the gigs get bigger, the expenses go up, so having those expenses detailed is gonna be really important, so they can't just say, Oh well, we hired four more bartenders today, then therefore your expenses went up a 1000, that's not gonna work. And so I think we'll talk about a lot of different contracts today, and you'll hear me say again, again, making sure they're explicit and detailed and definitive is always gonna serve both parties because then the contract is clear and we don't have anything to argue about...
0:10:55.3 S1: Well, one thing, Kristen, I are gonna add to our contracts now is to please hand us hundreds of thousands of times in cash prior to us playing before you hear me. Yeah, so please make note, when we are working together and you do up a contract for some core studios over this last year, it's changed because musicians are now signing up to play live performance is still... But not in front of an audience that are right there at this venue, but now they're being recorded, they're being live streamed. So how has that changed? Or I guess, have you seen that change as far as contracts are concerned, when... If there's a chance that these can be reproduced or planar...
0:11:44.5 S2: Yeah, it's very important. You're basically... It's one thing to have a performance agreement that says you're gonna show up and perform, it's a completely other thing to say, when we're going to record you, right now we've got a recording agreement, and then when you add in video, well, now we're making a movie out of it, a music video out of it. So you're adding rights, you're adding responsibilities, and that complicates things certainly over the past... I guess we're going on 13 months now, since everything went digital and went online... Yeah, I've spent a large amount of time over the past year talking about, Okay, we're gonna stream this, what do we need to do? Because the rights required to stream music, a video anyway, are different than the rights to stream audio only, which are very different from the right shot to play live. So we're adding in more complexity and hopefully also we're adding revenue streams, so it's more complex, but hopefully we're gonna make money because if you make that recording, that recording lives on and can hopefully continue to generate revenue, but when we do talk about video, sync rights are absolutely crucial.
0:12:59.9 S2: And we could spend hours talking about the different rights and music, how copyrights are used and paid for, but the sink right is the right to synchronize the music with a moving image, with a video. So if you're putting music in a television commercial or a movie or a video game, or just a video in the studio, you're exercising that sink, right. And we need to have those rights in writing to be clear about who owns what and who's getting paid, that
0:13:31.7 S1: I was just reading about how those 96 counts are coming back and they don't own the rights for the original music anymore, so they can't... Army Netflix with the original music, and people are upset about that, and it's one of those things, 'cause I guess the music supervisors didn't purchase them for long contracts back then because they didn't see this comment. Right.
0:13:56.5 S2: Well, and nowadays, since Everything lives on the internet forever, we know we need to have those rights forever, however, I mean, I was just working on some sink deals for a commercial, and we said We're gonna run this commercial for six months, we only need the rights for six months, but give us those perpetual rights for her to live on, if it's in a social media post, if it's somewhere on the internet, but we're not only gonna program it on television on broadcast media for six months, so we make these deals fit how we're gonna use the music.
0:14:32.6 S1: Well, that being said, I wanna do then move from the performance to mechanical royalties and go down that route, so can you please define mechanical royalty and importance of understanding how it plays a role in musicians finances?
0:14:47.8 S2: So let's do a very quick copyright 101. Okay, just so we're all using the same language on the same page, copyright protects any sort of creative work, Music, Television, dance, song, poetry, etcetera. The copyright exists when someone creates a work, whoever whoever creates the work owns the copyright, cores confusing, and it's twice as confusing in music because there's two copyrights in every song, there's a copyright in the composition. Now, when you write a song, you create a copyright, it's written down the words and music, then there's a completely separate copyright in this sound recording, what we often call the master, so I can go write a song, I'm gonna only copyright in the composition, then you two are gonna go record the song, you're gonna own the copyright in the sound recording, the mechanical is When you mechanically reproduce my composition in your sound recording, so basically, you took my words and music on a piece of paper, so to speak, and you went and made a recording of it, you mechanically reproduced. You've used my mechanical, right. So you have to pay me a mechanical royalty... Very, basically, so that explains that, and then think about...
0:16:08.8 S2: So when I wrote that composition, every time that someone downloads your recording, their mechanical reproducing my composition, every time someone sees a video including my composition, they're mechanically reproducing my composition, so those mechanical royalties can add up certainly when they saw as with most Realty streams, the more the song is played and distributed, the more the mechanical is gonna add up to... It's timely that we're asking this question because there's a new office called the mechanical licensing collective, the MLC... The MLC came into what was created by a change in the copyright law a couple of years ago, but it just basically opened its doors January 1st of 2021, so the MC is now a central clearing house for collecting and administering mechanical royalties. This used to be done and still is done by... Largely by Harry Fox. Some of the listeners may have heard of the Harry Fox agency, and now Harry Fox is working with the MLC and looks great about... Or what the change the MLC is, is that anyone who is a songwriter, who isn't represented by a publishing company, can just go and sign up with the MLC, and the MLC will then track mechanical relies and pay out mechanicals.
0:17:30.7 S2: Mostly the MOC is collecting mechanical royalties from the Spotify and Pandora and Apple Musics of the world, but DSPS... So these DSPS are paying the MLC, DLC will pay Socrates.
0:17:44.1 S1: One example I heard just yesterday as far as the difference between royalties with the composition and royalties from the master would be, I will always love to be a dollar and won Houston. So Valley composing that song, but does not have the rights to the masters of Putney Houston recording that song.
0:18:06.0 S2: So many examples, the whole Taylor Swift thing with big machine where they own the masters, and this is a constant issue with recording agreements and record companies, is that the record company will own the master, and that does not mean that they own the rights to the composition which is also often called publishing rights, the composition... It is often called the publishing, and if the songwriter still owns those composition writes, those publishing rights, they can go re-record and make new masters, make his own records, and
0:18:38.9 S1: That's their intention from what I read as for her, she wants to go rerecorded all of those
0:18:45.1 S2: Exactly, right. Yeah, but also the other interesting thing about mechanicals is Mechanicals are the way... Or underlie cover tunes, right? Because we have count examples of cover bands that only cover the specific act, but also we have tribute albums where you have a bunch of bands covering a particular artist, and all of those cover tunes are generating mechanical royalties for the owner of the composition.
0:19:15.8 S1: Well, that was one thing I saw a change in when streaming started becoming more popular and record companies were losing money, and they had to make sure that your regular bar down the street had a license for having the band play... Covers in the face because you could see that they were starting to call places and make sure.
0:19:40.7 S2: Oh yeah.
0:19:41.2 S1: Harvard, then they would go after the bar, which I had a friend in Rockford that they wouldn't have him for five years prior... For all the bands that came through there and may or may not have
0:19:52.7 S2: Played, Sorrell the thing about it is the mechanical reproduction, so what... What happens with those live performance venues is actually a different right under copyright, which is the public performance rights, most musicians have heard of as cabin BMI, as Kevin BMI, what we call Performing Rights Organizations, pros. And what these pros do is they collect for the public performance of music, public performances not only mean the live performance, it means a band on a bar, it also means a bar playing the radio over the loud speaker, it means music playing in a health club or in a restaurant or in the elevator, anywhere that music is being played to the public, that is a public performance, whether it's recorded or live, so these pros, as you said, go around to all establishments that are playing music over their loudspeakers and say, Hey, you need to have a license for that because you're performing music and that music... We represent that music. A lot of the musicians, songwriters, now I have to go sign up with a pro, I'm gonna go sign up with a camper BMI, there's also CSE and global, but we'll just call them as a man, the reason that a musician, a songwriter, signs up with a pro, is because that pro then goes out to all these places that are performing music, including radio stations, by the way, and collect royalties, collect licensing fees, and then distributes those licensing fees among all their member artists.
0:21:38.9 S2: It is far from a perfect system because it is impossible for them to know which songs are being played when all over the country and how often, but they try, and then they try and pay everybody to write him up.
0:21:53.5 S1: That reminds me of that a win by day that we used to play at The... Vandoorne wouldn't let us play a single cover because you wouldn't pay that membership.
0:22:03.9 S2: Yeah, is there is a long inserted history of the pros and the venues and going back and forth, and here's the thing, is that it is certainly an imperfect system, but the goal of it is admirable in that the goal is that musicians get paid for their songs being played, right. It certainly isn't executed perfectly, but that's the reason that they exist, because if you think about it, before that was recorded music, any time a musician music was being played, they were there 'cause they were playing as soon as we had recorded music, all of a sudden, if I was a song writer back in those days, and I record music, well, now I can be played everywhere, I can't go to every bar and restaurant playing my music and collect a royalty, collect a licensing fee, and that's where the pros came from, was because it was like, well, somewhere. Gotta go do it. And so they became these collectives of artists whose songs were being played and performed...
0:23:02.0 S1: My next question, I'm gonna push to down because I wanna talk about red flags, but I love seeing the word perpetuity, and it's also caught me a few times, can you give us the definition of property and as why we should wanna see that or not wanna see that a contract...
0:23:22.3 S2: Well, perpetuity just means forever. Right, so we use it in a contract to describe how long something is, how long a license generally is going to last, how long a contract is going to last, we'll go back to the example of a license, if someone is gonna take you music and put it in a commercial or a TV show, they are gonna want the right to do that in perpetuity, not to keep putting it in commercials and verity, but to continue to program that commercial in perpetuity, because the commercial, I may have a shelf life, but a movie, for example, if I'm a movie producer and I wanna put your music in my movie, I don't wanna have to come back to you in five years and pay you again for thought to find you a second wall, my movie is successful, you're gonna demand a lot more money from me, so I'm just gonna wanna say, my movie is done, all the music in my movie I can use forever as long as the movie is out there, so it depends which side of the deal you are on, whether you want to see perpetuity in that document.
0:24:26.6 S2: There are so many different contracts that musicians enter into or may be faced with, that we can't... Whether Perpetuity is good or bad, I think that in general, most of the contracts we're talking about here are for someone else to use your music, right, whether it's a record company or a movie producer or anybody, and so in those situations, you may not like perfect. You may want those rights back or you may wanna get paid again, but there's certainly... Again, it really just depends on the specific situation and whether that's gonna be good or bad for you.
0:25:07.3 S1: I was looking for more juice.
0:25:09.5 S2: And that's some bad examples of... I've got for... I've got horror stories for you and I've seen more crappy contracts and good words for sure. In my lifetime. And so, yeah, we can tell... We can tell war stories if you want. I love.
0:25:25.4 S1: I'd love to get one because recently you experienced where I think that word was missed, a story where that word was missed and someone thought they were entering and something that was only gonna last a year or two, and when the contract came up and they were going to take those songs to a different company to help with distribution... Everyone missed the word.
0:25:47.3 S2: Adyen, I would like to say that it's not just the term, it's not just the length of the contract, but it's the overall deal, and what makes a good deal or a bad deal, because if you're paid well enough for it... Perpetuity may not be a bad thing. If there's enough zeros on that check, you may be just fine with perpetuity. Right, but I think that one of the tricky things about contracts for our music is that when we write music, it's a part of us, it's something, it's not just a widget, it's something that we care about, that we have an attachment too, so it's not easy to give it up forever. But I think that... But we also were very commonly see this classic record deal where the record company pays for the artist to record, and therefore the record company owns the sound recordings and owns in perpetuity, and so the artists may have gotten a nice advance... A check once, and hopefully they'll get some more royalty payments in the future, but after that, the ownership of that recording is out of your hands as out of the artist has, and it's a lot of times that is the Balance, It...
0:26:59.8 S2: Is the check big enough for me to give up these rights?
0:27:02.4 S1: This is a good spot to pause and we'll come back next week with the exited conclusion, with entertainment lawyer Dave Rader for this week, take this opportunity to go through and look at your existing contracts and make sure that you understand all of those in an AWS that might be getting you in trouble down the road, we know that your time is valuable and we so appreciate you spending this time with us, being a part of this community, it is our hope that you feel that sense of community here at musician step car. If you'd like to get a hold of, please reach out to us at musicians tip jar at gmail, or go to our website at musicians Teja dot com. As I always, thank you for joining, I said Remember, there is already enough for everyone, you just need to know how to get it until next time my bedtime it myself, 'cause we... Please stay safe, stay hotter the this... This musician did. Nothing on this show should be considered specific personal or professional advice, please consult an appropriate text legal business with inertial professional for individualized advice, individual results and a guarantee and oldest rate IES have the potential for property lost, those are operating on of Nusantara I ETA