2.0 Renegotiations

2.1 When?

The more cynical type of manager relies heavily on the fact that recording contracts are probably unenforceable and in any event will always be renegotiated in the event of success. Basically, this is nonsense. Some years ago, similar cynics were to be found in record companies. They issued recording contracts which were quite unfair and which they assumed were probably unenforceable. Following any success, and sometimes even if there was only the smell of success, they were prepared to offer improvements to keep everybody happy. The industry does not really work this way any more. If the record company is in profit, an aggressive manager can usually extract more advances on one pretext or another. However, such concessions would rarely come close to what is generally meant by a renegotiation.

2.2 How?

A proper renegotiation is difficult to achieve. Record companies are generally confident in the enforceability of their contracts. Whilst a record company will do what is necessary, within reason, to keep a successful artist happy, this rarely extends to giving away anything valuable. Accordingly, if a contract is to be re-negotiated it has to be a two way street; the artist has to give something in return for any improvements given.

The bulldozer or blackmailing approach to re-negotiation involves explaining to the record company that the artist is desperately unhappy for whatever reason. He or she cannot bring himself or herself to finish recording the new album until something is done to make him or her happier. It is best to leave this approach quite late, (preferably, until the album has already been scheduled for release and the record company has cleared its decks in anticipation of starting work on the album). If this tactic fails (and it usually does because the record company knows that in fact the artist is desperate to release the record) then probably the only thing the artist has to offer which the record company does not have already is the option to call for another album or two. This is why during the negotiations over the original contract so much significance attaches to the number of options. If the artist achieves success early on and is resentful about the terms of the deal, and if the company already has the right to call for another three or four albums, there is little incentive on the record company to re-negotiate. The record company will probably not feel exposed at least until the time when the penultimate album is delivered, if not the last.

If the artist can manoeuvre himself or herself into a strong enough position to re-negotiate, he or she usually looks for higher royalties, more substantial advances, (and perhaps a non-recoupable bonus payment as an additional reward for past success), the exclusion of DVD rights, perhaps the exclusion of particular territories (usually North America if the performance there has been poor), the reversion at some point of the copyright in the masters (a particularly difficult nut to crack), and perhaps, (in the case of a group) a specific solo recording commitment or the exclusion of solo recordings from the deal.