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and Bands -- SMP Hot Links Supreme
Songwriting -- SMP Hot Links Supreme
Royalties -- SMP Hot Links Supreme
Record Labels -- SMP Hot Links Supreme
Music Publishing -- SMP Hot Links Supreme
Legal Notes -- SMP Hot Links Supreme
In the case of record companies, it is
a statement inserted in a recording contract
(a contract clause) that would permit the record company to take
receipts otherwise due the artist from any of the artist's releases
and apply them towards any recoupable advances or costs incurred
from any other of artist's recordings.
In short, this would allow the record company
to pay debts incurred from one venture with profits realized from
another venture. Some companies may even try to use one artist's
profits to pay another artist's losses! Also,
record companies could "sit" on certain releases or
their incentive to push a release could be influenced by the wording
of this clause.
Depending on the wording of this and other
clauses, a cross-collateralization clause can have direct, deceiving,
and often very undesirable consequences to the artist when applied
in conjunction with other clauses of the contract (or with past
and future contracts). It is possible for an artist who has had
many successful releases to never receive any royalties! Experienced
artist negotiators will reject this clause.
In the case of a music publisher, it is
a statement inserted in a Songwriter/Publisher contract (a contract
clause) that would permit the publisher to take receipts otherwise
due the songwriter from one song and apply them towards any recoupable
advances or costs incurred from another song.
In short, this would allow the publisher
to pay debts incurred from one song with profits realized from
other songs. This can, depending on the wording of this and other
clauses, be very deceiving, and have vary undesirable consequences
to the songwriter. One consequence may be that a songwriter who
has had many successful songs could never receive any royalties
because they would be used to offset losses incurred from other
endeavors-including losses the publisher has realized from songs
of other songwriters!
Experienced contract negotiators would refuse to allow such clauses. They would maintain the publisher could "sit" on some songs and not suffer loss, and that allowing such a clause could remove the publisher's incentive to push a song.
See Cross-links: ROYALTY, ADVANCE, CONTRACT-RECORDING CONTRACT clause #37, CONTRACT-SONGWRITER/PUBLISHER CONTRACT clause #26.
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