By Todd Brabec, ASCAP Executive VP of Membership and Jeff Brabec
One of the ways that songwriters, producers and smaller record companies get financing for their music publishing companies is to sign a co-venture or joint venture deal with a major publisher.
The value to the major publisher is that it gets the benefit of the creative expertise of the writer, producer, or record company so that it will be able to be involved with the songwriters and songwriter performers discovered by its new partner. In effect, the major publisher is hiring an additional A&R source to complement its own creative staff and be introduced to opportunities that it would ordinarily not have. The value to the songwriter, producer or record company is that they will have a source of financing and administrative support to take their creative dream and business plan to a level that they may not be able to do by themselves.
Song Ownership And Financing: The major publisher usually guarantees that it will provide a certain level of financing on an annual basis which will be used to sign songwriters selected by the new partner (e.g., a fund of up to $100,000 per year). The copyrights to the songs written by writers who are signed will be co-owned by both companies - the co-venture partners.
Advances: The major publisher many times pays all the advances due to the writers who are signed. For example, if a songwriter agreement signed by the co-venture provides for $75,000 in advances, the major publisher would fund the entire advance. Sometimes, the major publisher and the co-venture partner will co-fund the advances.
Sharing of Income: In many cases, the net income of the co-venture is split equally between the major publisher and the co-venture party. At other times, the net income is shared proportionate to the amount of money each party has contributed to the advances paid to the songwriters signed.
© 2007 Todd Brabec, Jeff Brabec
For more information, check out the book Music, Money and Success: The Insider's Guide To Making Money In The Music Business (Schirmer Trade Books/Music Sales/502 pages) available for sale at Amazon.com, Barnes & Noble, Borders, Music Sales Group and www.musicandmoney.com.