Producer Agreements in the Music Business Are a Mess. The System Has to Change (Guest Column) 

Music
Look at your favorite album from the past year, and there’s a good chance that 10 to 30 different producers contributed to it. And yet in this “age of collaboration” that continues to produce culture-defining hits, we have a problem: How do we handle all these producer contracts?

In the U.S. model, producer deals are seldom discussed until after a label signs a recording agreement with an artist. Once the deal is set, the artist contracts directly with any producers working on their music — a requirement in the artist’s deal with the label. The artist then requests that the label pay, credit and account to the producer per the terms of their agreement. Unfortunately, this complicated process often becomes a game of broken telephone.

Discussions on this topic can quickly lead to finger-pointing. But the issues that producers are facing today, speaking generally, are not a matter of “us versus them.” The label, which has no direct contractual relationship with the producers, is asked by the artist on multiple occasions to honor deal terms that the label had little role in negotiating. Even if the producer agreement says the producer will be paid within five days of signing, unless the label agrees to pay within that timeframe, that schedule won’t be honored and the producer’s only option is to take it up with the artist.

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This disconnect becomes even more problematic when the volume increases. I currently represent over 30 producers and, on average, my office handles 20 to 40 producer agreements a week. That includes review on behalf of our producers as well as drafting agreements for our artist clients, the latter of which could require multiple agreements — even as many as five or six — to clear one song. For a boutique firm like mine, it keeps us busy and the clearances can be a big headache if not done in a correct and timely way. In some cases, they can hold up release dates and, if not executed properly, result in copyright infringement claims that could lead to lawsuits.

When negotiating a record deal for an artist, I make sure to have pointed conversations with the label about how they pay and account to producers because securing clarity in advance about the label’s policies is an absolute must.

It hasn’t always been this way. In the past, prior to the start of recording a project, artists would submit a budget proposal to the label encompassing all the creators on a given project. Oftentimes, the artist would use the label-provided budget to hire one producer, who would be responsible for hiring, managing and paying the musicians and other creatives needed to complete the album.

Today, however, unless you’re already an industry-leading producer, the odds are you’re coming into the studio on spec. This means that you and over 20 other hopeful producers work with the artist on 40 or so songs, with 12 to 15 songs typically making the final cut for the album. The songs that don’t make it are considered speculative, trial-based work done for free. If one or more songs by a given producer do make the cut, the hope is that that producer’s lawyer can negotiate good terms.

Unfortunately, there’s a lot of good music that doesn’t see the light of day due to clearance issues, not to mention music that gets removed from streaming services after release due to a failure to adhere to producer deals (or a failure to do them at all). But even in the best-case scenario when things can be worked out, most producers typically have to wait a long time before they get a single cent due to an overly complicated process.

In the first step of this process, the agreement has to be signed by both the artist and producer, a sometimes daunting task if that artist is touring. After that, the label has to accept the agreement (which can sometimes conflict with the recording deal originally inked with the artist), receive an invoice (sometimes multiple times before it’s actually “received” and in line with label policies) and new vendor paperwork, and wait for the producer to register with the label’s specific payment system.

“A lot of people think that all we do is push a button and money goes out, but there are so many checks and balances that admin does on the back end to ensure that payments are processed properly and within a timely fashion,” says one senior executive at a major label who asked to remain unnamed. Of course, we have to understand the logistical burdens and practical business realities that label employees are up against. But at the same time, we have to recognize the plight of producers who, despite making money for the label, are forced to wait on the payments they depend on to feed their families. Many employees at the labels understand this and know the system has to change.

“There is a huge disconnect when it comes to paying creatives in a decent time frame,” says Malita Rice, vp of A&R at Warner Records. “We have to keep their livelihood in mind and not only think from a label and artist perspective. If you can’t walk out the grocery store without paying, why should music be released without the creative getting paid or waiting months or years to be paid?”

While these systems and disconnects continue to exist, producers who have “made it” will continue to struggle to pay bills, even while their music becomes a viral TikTok sound.

Managing these clearances is such a burden on resources that any lawyer aspiring to make it in music should learn clearance docs first. And for producers who want to put themselves in a better situation? My friend and colleague, Bob Celestin, shares this advice: “One of the many obstacles to producers and songwriters getting paid their publishing monies is the neglect or outright refusal, at times, to document their respective ownership interests in songs they jointly create,” he says. “The easiest way to solve this problem is by utilizing split sheets at some point after they’ve jointly created a song.”

Still, while being diligent about this can help producers, it doesn’t fix the overall problems with the system itself.

So what’s the path forward here? Suggestions have been floating around for years: Unionize producers. Leverage AI to cut down on admin work. Develop a new “default” producer agreement that kickstarts the process. Go the way of the U.K. music industry and have labels contract directly with producers.

The truth is, all of these so-called solutions would help alleviate the current problems while also creating new ones. This isn’t about producers versus labels versus artists but rather about fixing a problem that has negative ripple effects across the industry. It’s imperative that we bring everyone to the table to create a more just system.

Acclaimed attorney Matt Buser leads Buser Legal — the Miami-based law firm at the crossroads of entertainment, sports and intellectual property matters — dedicated to empowering creators and safeguarding elite talent with strategic, personalized counsel. Since its founding in 2014, his blend of deep legal expertise, business acumen, and a passion for the arts has earned the firm acknowledgment from Billboard to USA Today, embodying the innovative spirit behind #NotYourAverageLawFirm.