Music publishing agreements series; (part 16) Other accounting considerations

Unlike NORM, SAMRO will, generally speaking pay your publisher his share, and the songwriter his share, for the use of the compositions. (CAPASSO will apparently not follow the SAMRO model for now). This means that the PRO must have details of your publishing contract. (It used to be the case that the societies would pay everything to the publisher, who would then give the composer his share).

If your royalty account is recouped, you should certainly consider whether you should be exercising your audit rights under the agreement and there may even be good reasons for doing so if you are un-recouped. You must monitor exactly when your publisher is due to pay you additional advances or royalties.

If under the publishing agreement you have the contractual right to approve adaptations of your songs or the addition of new lyrics or translations, then you must ensure that the publisher is always aware of where and how to contact you or your manager. Whenever being asked for such consents you should ask for details of the terms on which any adaptors, translators and lyricists are being engaged, because it may well be that their fees are being deducted from your royalties.

If the publishing agreement grants you the right to approve the granting of synchronisation licenses (i.e. the placement of your songs in films, television programmes or commercials), then again the publisher must know when and how to contact you prior to such deals being done. You should be kept fully informed of the details pertaining to any deal which is being offered by the film/ television/ commercials company.

You should ensure above all, that your publisher is being offered a fair and competitive fee, regardless of the marketing value of having your song synchronised. In some cases, you might be entitled to ask your publisher whether some or all of your proportion of the fee can be paid through to you immediately, rather than being applied as part of the recoupment of your advances.

Remember that your publisher is under a contractual obligation (usually to “use his best endeavours”) to exploit your songs. If you deliver a song which you yourself are not going to record then you should do what you can to ensure that your publisher does what he can to offer the songs to other recording artists. Under the agreement, if your publisher fails to exploit a particular song within a particular period then, you should have the right to request a reversion of the rights in that song. Make sure this clause is in your contract and monitor those rights carefully.

You should receive royalty accountings from your publisher at least twice a year (usually 31st March and 30th September), irrespective of whether or not your royalty account is recouped. When you receive those statements, either you or your manager or your accountant should check through them carefully to ensure that only proper recoupable expenses have been charged to your account.

Also, the royalty earnings themselves should be carefully analysed to ensure that your account is being credited with your proper and due entitlement. You should appreciate that publishers and/or local collection societies such as SAMRO and CAPASSO do not always collect everything which a composer is due. A genuine mistake may be made, and it may be necessary for you to make enquiries, to chase money up, and to question your accounts. Do not necessarily trust your manager either (ask Sting – he lost $12 million to a fraudulent manager this way. Check the figures yourself.

Every time you perform a live gig you must ensure that the proper SAMRO performance returns are made and fees to which you are entitled eventually paid through to them. Remember that for every live concert th which your songs are performed, no matter by whom, you are entitled to payment by the promoter or venue via SAMRO. (If you are playing your original material at a gig, it is the club owner/promoter who pays SAMRO for the performance of your songs via his annual SAMRO license, and SAMRO will have to pay you).

In the UK, the club/promoter is obliged to pay the PRS three per cent (3%) of the “gross box office receipts.” With a full audience at the Mean Fiddler (one of the UK’s premier rock clubs), that would mean around £500 being paid to the PRS. With Wembley Stadium, the payment could easily exceed £100 000. At least half of these public performance fees are due to you as the composer.

But the PRS can only administer these arrangements if two standard forms are filed with the PRS no later than thirty (30) days after each concert – one form signed by the band’s manager, the other by the promoter. Only then can the PRS collect the fees from the promoter. Similar rules apply to other European countries. In South Africa, these figures are naturally smaller, but certainly not to be sneezed at.

Venues are notoriously slack at providing SAMRO performance return. So you should make the list of compositions played, get the venue manager to sign off, and submit it yourself (even though you are doing his job). You must record and advise SAMRO of every public performance of your compositions, known to you or your publisher, and make sure that your publisher chases this with vengeance.