Most record labels and film studios are signatory to collective bargaining agreements with the major entertainment labor unions, such as the American Federation of Musicians (AFM) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA). These union agreements permit the employers to create and distribute recorded media content for one initial purpose only—the one covered by the union agreement to which they are signatory—in exchange for the wages and benefits payable for the session work. If the employer decides to license that content for some other use (for example, licensing a sound recording for use in a motion picture), the employer must pay the performers again for the “new use” of the recorded content. Performers also are entitled to residual payments for sound recordings and films based in part on the success of the release.
The Problem with “Producer Agreements”
Some record labels and film studios, however, are crafty when it comes to evading their contractual obligations to pay new use payments and residuals. Not infrequently, a record label will approach a performer with a “producer agreement”, pursuant to which the performer is asked to deliver a master sound recording, perhaps on a work-made-for-hire basis, for inclusion in a motion picture and/or a soundtrack album connected to the film. Ostensibly, the performer/producer is pre-paid royalties as a “producer advance”, which the label will recoup from royalties supposed to be paid or accrued to the performer, notwithstanding any work-made-for-hire terms.
Four Ways These Deals Hurt Performers
These “producer agreements” disadvantage performers in a number of different ways.
- First, the performers are burdened with contracting and paying others as needed for the recording of the desired composition, which may leave them economically upside down on the front end.
- Second, performers may not ever actually receive any royalties, because labels usually never consider the advance to be fully recouped.
- Third, the labels typically insist that the performers submit session reports to the unions, if at all, representing that the session was called to make a sound recording instead of music for a film. As a result, the master sound recording delivered to the record label will not be eligible for union residuals as a sound recording, because it will not have been first released as one. Therefore, the sound recording residuals funds will have no data on distributions of that title as a sound recording. Nor will it be eligible for film residuals, because the session report mischaracterizing the project as a sound recording project would not be filed with the film funds dedicated for that purpose. So the performers are cheated out of back-end residuals altogether.
- Fourth, no new use payment is made for the use of the recording to the film, despite the record label’s and the film studio’s mutual insistence that it was a licensing deal.
Breach of Union Agreements and Legal Implications
In this scenario, the record label likely has breached its collective bargaining agreement(s) by calling a session for some purpose other than the making of a sound recording. The fact that the recording may end up on a soundtrack album does not change the equation, because the film studios are bound by soundtrack album terms in their motion picture agreement(s). And, the film studio has breached its collective bargaining agreement(s) by failing to report music made for a movie to the relevant film residuals fund(s). All attempts to straighten things out after the fact are messy, to say the least.
The Bottom Line
The lesson here is this—if you are asked to create content for inclusion in a motion picture film, or a soundtrack album associated with one, make sure you are signing with the film studio that will be producing or distributing that film.