MBW Views is a series of op-eds from eminent music industry people… with something to say. The following op/ed comes from Suna Izgi, an associate in the Los Angeles office of law firm Manatt, and Jordan Bromley, a Partner at Manatt Entertainment (pictured L-R, inset).
“The music industry isn’t simple, and artists often lean on strategic partnerships to move their careers forward,” note Izgi and Bromley. “One of the most common is the production agreement, which influences not just how music gets made, but who really benefits from it. This article breaks down how production agreements work, why artists sign them, and where things can go wrong…”
WHAT IS A PRODUCTION AGREEMENT AND WHY MIGHT IT BE BENEFICIAL?
A production agreement is a contract between an artist and a production company, where the production company helps develop the artist’s career by providing resources such as recording facilities, management guidance, and industry connections.
In exchange, the production company usually receives a share of the artist’s earnings and/or certain rights in connection with an artist’s music. Conceptually, the structure is like having a manager also act as the artist’s label, and sometimes, publisher.
Part of a production company’s pitch is usually that they can “break” the artist more quickly than if the artist were to continue independently by providing a support structure that can enhance an artist’s prospects for long-term success.
Production companies often market themselves as having established relationships with key industry players, including labels, publishers, music supervisors and digital platforms. This network provides the potential for exposure for an artist that they otherwise might not have. Beyond introductions, production companies often also aim to facilitate collaborations and partnerships to advance an artist’s music career. They may do this by organizing writing sessions with prominent songwriters, connecting an artist with experienced producers or pitching the artist to various record labels.
THE PERILS OF PRODUCTION AGREEMENTS
While production agreements can offer valuable opportunities for artists, they can also present significant challenges, both during the term of the agreement and upon its termination. Understanding the potential pitfalls and how to address them is essential for safeguarding an artist’s interests.
First and foremost, a production company may have extensive authority over an artist’s career decisions, creative direction and business relationships. This can limit the artist’s ability to make independent choices about their music, collaborators and overall image if certain approvals aren’t built into the deal, especially if the artist has signed to the production company for multiple albums.
Production companies also often require ownership rights in and to the artist’s recordings and publishing. This can significantly impact the artist’s ability to profit from, license, or control their own work in the long run, especially if the production company retains ownership of copyrights.
Lastly, once the term of a production agreement ends, issues can arise around ongoing obligations, royalties and rights—particularly where the production company furnished the artist’s services to third parties (i.e., the production company was a direct party to the agreements).
This can create uncertainty and logistical difficulties regarding income allocation, artists obtaining direct accountings and communications, and whether the artist may freely continue working with former collaborators without the production company retaining a financial interest.
Key Considerations Before Entering a Production Agreement
Before committing to a production agreement, artists should thoroughly research and vet any production company expressing interest in them and carefully consider how to structure the arrangement to protect themselves and avoid complications after the deal ends.
Here are some safeguards to consider integrating into the deal:
- Artists must be a direct party to every contract facilitated by the production company. Bonus points if the artist can negotiate all agreements directly. This ensures that if and when the relationship ends, the artist can continue to have a direct line to the applicable third parties.
- Artists should secure direct accountings from third parties and online portals to monitor earnings and maintain financial transparency.
- Artists should retain approval rights over all significant decisions, such as selecting third-party partners, making creative choices and the uses of their name, image and likeness.
- Certain rights should be explicitly excluded from the agreement. For example, the production company should not automatically gain ownership or a share of the artist’s recordings, publishing or merchandising income.
- If the production company secures a label deal for the artist, their financial participation should come from the label’s share rather than the artist’s share.
CONCLUSION
Production agreements can help artists get off the ground, opening doors to industry connections, money and creative support.
But they usually come with strings attached. Artists may give up rights, take on long-term obligations or lose control over how they get paid. When a production company dips into multiple income streams, rights or service deals, things can quickly become complicated. This is why artists need to understand the fine print up front and carefully consider what happens if and when the partnership ends.
In the end, a well-negotiated production agreement should empower artists to grow within the industry while safeguarding their personal, creative and financial interests, laying the groundwork for both immediate success and sustained development as their careers progress.Music Business Worldwide
