The Oracle: What's the big deal?

A – In a nutshell, this is a matter of contract and will be determined by the terms of the publishing deal struck between the songwriter and his or her publisher, i.e. the publishing agreement itself.
If the publishing agreement allows the publisher to freely exploit the songwriter’s music at its sole discretion, then the songwriter will have little or no control over the terms of any sub-publishing deal.
So if you are a songwriter, the time to address this situation is before you enter into the publishing agreement.
If you raise the issue of controlling sub-publishing deals after you have entered into the publishing agreement, you will have to rely on the publisher’s goodwill or willingness to change the terms of the existing publishing agreement.
As a songwriter, one of your main priorities will be to ensure that your publisher doesn’t effectively give your music away for half of nothing.
So, at the very least, if your publishing deal provides that the publisher gets 25% of income generated, no sub-publishing agreement should give the sub-publisher a share larger than 25%.
Bear in mind that if a sub-publisher receives 25% of a particular revenue stream, 75% of that revenue will be paid to the publisher.
The publisher will then keep his own 25% of the amount received from the sub-publisher with the balance going to the songwriter. In other words, the songwriter suffers a double deduction. It may be possible for the songwriter to agree a reduced share for the publisher where income is derived from sub-publishing agreements. However, this will be a matter for negotiation.
Below is a checklist of other items that are relevant for sub-publishing deals between the publisher and any third party sub-publishers.
- No sub-publishing deal should be for a term longer than the publishing agreement itself.
- Sub-publishers must not be allowed to assign or transfer their interest in the sub-publishing agreement (at least without the consent of the songwriter).
- Sub-publishers must not themselves be allowed to appoint sub-publishers (effectively sub-sub-publishing deals!).
- If the publishing agreement is terminated, for example, due to a breach of contract by the publisher, all sub-publishing agreements should automatically terminate at the same time. This may sound unfair to the sub-publisher, who may have done nothing wrong. But the sub-publisher will most likely be able to go after the publisher for compensation if they wish.
- The publishing agreement should make it clear that in the event the publisher fails to follow up with collecting royalties from sub-publishers (for example, if it stops trading), there should be an automatic assignment of the publisher’s collection rights to the songwriter. The reason for this is that there is no direct contract between the songwriter and the sub-publisher (known as “privity of contract”), and without this provision it might not be possible for the songwriter to go after the sub-publisher.
- The payment terms, accounting and termination provisions etc. in the sub-publishing agreement should be the same as in the publishing agreement itself.
- In general, the terms of the sub-publishing deal must not give the sub-publisher a better deal than the publisher himself has.
One other important point is worth mentioning. Publishers will often have subsidiary or associated companies in other countries. Publishers should not be allowed to enter into sweet (very favourable) sub-publishing deals with their subsidiaries. So the publishing agreement should provide that any sub-publishing agreements must be entered into “at arm’s length”.
I’ve said this before, but to a large extent much of the above will be determined by the respective bargaining powers of the publisher and the songwriter. Established songwriters are likely to get a better deal than unknown ones. In addition, if the publisher is paying a substantial advance to the songwriter under the publishing deal, the publisher is less likely to give the songwriter significant input into the terms of sub-publishing deals.
Sub-publishing should not be seen as a bad thing. It is a useful and practical way of exploiting your music and earning income, particularly abroad where the publisher may have little or no presence.b