How Are Entertainment Contracts Different from Other Kinds of Business Contracts?

Most business contracts are designed to prepare for the eventualities you can reasonably expect in your industry. In this way, entertainment contracts are similar to other business agreements. The main difference lies in the scope of coverage and the types of agreements that must take place to protect artists, entertainment companies, and those in between. What can you expect from an entertainment contract that you might not see in another industry?

They determine your profits.

Whether you’re an artist signing with an entertainment company or vice versa, your contract will likely contain plenty of provisions about royalties and payment. These contracts can become confusing to some, as many companies use complex calculations to determine how the artists should be paid. A contract from a record company may look very different from one written by a film studio, as both use different formulae to calculate royalties and payment structure. One may use a net-profits clause, for instance, while the other may specify royalties per units sold. If you’re the talent, you should ensure both you and your representatives understand the calculations and strive for an equitable contract.

They inform how your art is produced and distributed.

When artists produce work in the film, television, music, print, and similar industries, their contracts often dictate how their art will be made and used. This may involve stipulations about how the artist will work (as in screenwriter contracts), how the art is created (as in publishing contracts), how the art is distributed (as in media distribution contracts), or some combination of these rules (as in recording contracts).

They can give you an equal piece of the pie.

Entertainment contracts can sometimes cross into other industries, like when a movie producer wants to license a song. The song’s use may involve a publisher, for example, who owns the publishing rights, and a record company that owns all sound recording rights. The license agreements in this situation will most likely include a “favored nations” clause, which calls for both companies to get equal treatment from the licensee. In this simple example, the movie producer might pay the same fee to the publisher and record company in the interest of equal treatment that satisfies the favored nations clause.

They protect your intellectual property.

Intellectual property may be a concern for many types of businesses, but in the entertainment industry, your IP is oftentimes your main stock-in-trade. Entertainment contracts can define the ownership and use of songs, films, plays, fine art, books, and more. US copyright law includes certain conditions specific to the entertainment industry. For instance, once a songwriter has recorded and published a song, the law requires the copyright holder to grant a “compulsory license” to anyone else who wants to record that song. Licensees must then follow a set of strict guidelines to report its use, sales, and royalties to the copyright holder.

Entertainment contracts can cover a lot of ground, and they can also be very specific. Laws are created, interpreted, and enforced differently from state to state, so it’s important to choose an attorney who is well-versed in all aspects of entertainment law. Calevoso Law can help you create a fair entertainment contract that upholds your best interests. Give us a call to speak with an attorney who knows entertainment law from A to Z.