Royalties and Payments
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Do’s and Don’ts: Recording Contract Recoupments: Nothing is Free!

Royalties and Payments
Nothing is Free!

Record companies can make the once ordinary and everyday person morph into the next America’s Most Loved, Most Beautiful, or Most Sexy Person of the Year. Artists should know that record labels do not shell out money for wardrobe, stylists, dentists, plastic surgeons and etc. at no cost. You should consider these purchases as an advancement against your royalties. If you didn’t think about it before, reread your contract. Recoupments are the reason most megastars find themselves with a small paycheck during a pay cycle and later in bankruptcy court.

Recoupment is the process of keeping money to cover any and all advances. It is important to keep up with your recoupable costs. For example if a record company gives an artist $15,000 as an advance for signing a new record deal then the first $15,000 the Artist receives in royalties goes to the record company to recoup the advance given to the Artist. Expenses that are recoupable are recording costs, promotional costs, touring costs and music video costs to name a few. Other recoupable costs include (but in no way limited to) wardrobe, photoshoots and housing.

If your royalties do not cover your advances then any unrecouped monies are considered your deficit, and you will need to recoup your deficit before you, the Artist, can make any money.

Written by: LaQuita R. Stokes, Attorney at Law for Corbin Johnson, Stokes & Glass: An Association of Attorneys

Visit www.wedoentertainmentlaw.com for more contact information.

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The articles, opinions and views provided in this column are not intended as legal or financial advice: legal information is not legal advice. All information in this column is for educational and informational purposes only. Features are authored by licensed attorneys. Articles and content contained herein are not to be used as a substitute for professional legal services. As laws, details and personal situations vary from person to person and state to state, articles and content contained herein are not and cannot to be used as a substitute for legal, career or financial advice. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this column. The writers of this column and this website will not be liable or responsible to you for any claim, loss, injury, liability, or damages related to your use of this information

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