Africamusiclaw.com reader and industry insider, Bobby, left a great comment yesterday about the Ope Banwo v. Trybson Dukoko and Baba Nee breach of contract case. The comment required I jut address this whole thing once and for all. Ope Banwo has also calmed down considerably although he maintains his position that the artists are bound by the legal agreement they signed. For all artists, labels and industry professionals, the law profession is what I wake up and do everyday. I am extremely passionate about law. I do not look at faces, whether you are an emerging artist or major executive, all is fair game here on Africamusiclaw. If you have legal news you deem worth sharing please feel free to email me at ([email protected]). If it is news I am interested in, you will see it on here along with my legal commentary, as best as the facts permit to. Also, clearly, we have intelligent readers and commenters as well as industry insiders among us like Bobby, Celeste, Nkem etc. They too, along with the rest who read this blog, can share their input so we can all learn as we continue to grow as a young music industry.
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Now let’s get to this case:
Part of Bobby’s Comment that caught my interest: “The premature action of immediately cutting the artiste off all shows or axing his songs and promotions from press and media houses in the bid to cause the artiste financial embarrassment is a shot in the label’s foot as they are singlehandedly killing off their investment and then still expecting the artiste to pay for damages to the tune of costs incurred so far. . .”
Read the full comment and Ope Banwo’s position here.
Storm 360 operated by music executives Obi Asika and Olisa Adibua (who you all know after that beating incident at Beat 99.9FM I am so over,) in the last 5-6years, have had many artists end their relationships with them: Killz, Jazzman Olofin, Darey, Sinzu, GT the Guitarman are some of the artists whose legal relationships have been terminated with Storm 360.
Kel walked out on Capital Hill Music last year and they were very nice to her, so there was no drama. They even allowed her walk away with her music.
Zara, it seems, is no longer with Alapomeji records.
Kelly Hansome we all know his brouhaha (fight) with Kennis Music and his solo career.
There will be many more who will leave their labels and this is perfectly okay. Relationships come and go. This is business. That is why it is important to leave a relationship on amicable terms and think before you sign a contract. Both artists and labels need to shift the mind from artists as housemaids and servants to artists as music professionals capable of earning you a lot of money and vice versa. Artists need to put in the work and learn the business of music.
The most important clause, therefore, in any legal contract has to be the termination clause. How will we end this relationship if things don’t work out, or you die, or suffer a heath crisis etc. (The article below is a republished one I wrote which addresses these issues) but is customized for the Ope Banwo v. Trybson Dukoko and Baba Nee situation.
By the way, I have read reports that the artists at issue say they will expose Banwo for sleeping with women etc. Okay so Banwo is also a Pastor and irrespective of that, it is really bad for him to act so juvenile and sleep with that many women, assuming the allegations are true. But, whether he sleeps with 500,000 women or 1 woman, it is irrelevant to the fact that they signed a contract and they are bound by the terms. The rest is just story.
Can Banwo do what he has done or what Bobby calls “premature.” Absolutely. It is also not premature. It is what should happen, depending on the terms negotiated, when a record label is out of pocket to the tunes of millions and an artists signs an exclusive contract.
Is there a loophole for these artists? There is. Most labels don’t sign worldwide music deals in Nigeria, from some of the agreements I have been privy to read. In addition, most do not think of the digital world. Eminem in the USA recently won a lawsuit because the digital world (online) was not negotiated in the contract. If this is the case for these artists, then while they will be restricted from performing, etc. on air, radio etc. They can do what they want online.
If they are looking to use existing music etc. online, depending on the terms, they could still have major issues because they cannot get around the fact that Stingomania holds all the intellectual property rights to what they have created and what they will create until 2014.
Who Owns the Music When an Artist Walks Out on Record Deal?
What is the Typical Scenario Where An Artist Walks Out on a Record-Deal?
When an artist walks out on a record deal, the artist gets nothing. In many instances, the artist still owes the label money. In fact, when an artist walks out on a label, the label still retains the masters and owns the copyrights to the artist’s work. It is also not unusual to see a label limit an artist from recording for a set period of time. In Banwo’s case, the artists are limited until 2014. In the West, you will see labels even own the artists brands, trademarks, website url which obviously affects merchandising, and artists cannot perform the songs publicly, broadcast etc.
Why Such Harsh Results for the Artist?
Unless an artist is a “minor,” has “mental impairment,” was under “duress (like gun to the head) when the contract was signed,” there is “impossibility,” “frustration,” “terminal illness” or “natural disaster,” etc. when he/she signs on the dotted line of a record-deal contract, the contract is legally binding. It is legally presumed that such artist has read, understood and willingly and voluntary signed the contract. Accordingly, courts both within and outside Nigeria will typically enforce these agreements if an artist does not live up to his/her end of the bargain.
Are There Instances Where Artists Can Walk Out with Their Music etc.?
Yes. Let’s look at the various kinds of record-deals to better illustrate this point.
- Standard record deal: This is the common deal that many artists sign. Here, a label would advance to artist money so s/he can record his/her album. The label also does its primary function as a label i.e. manufacture, distribute and promote artist’s album. Artist makes his/her money after label recoups all of its costs from Artist’s album sales, usually very little and sometimes nothing. The label has ownership of the artist’s masters and copyrights, forever. When the artist walks out, s/he gets nothing. In fact, s/he will still owe the label.
- 360 Deal: Within the past 5years, this has become a common phenomenon in the West given the decline in CD sales. A few African owned labels are also jumping on the bandwagon and it might very well be the kind of deal Banwo has with his artists. Here, the label, for example, understands all of the vertical revenue that the artists can make for them as an artist. So, they will take their standard cut from sale of his/her CD both on and offline. In addition, they would require that the artist give them a percentage from the profits of his/her concert tickets, merchandise sales, ringtones, synchronized music videos, endorsement deals and anything else that the artists is involved that uses his/her name as a brand or uses his/her music. Traditionally, labels owned only the intellectual property rights i.e. copyrights. Now, they want it all. When an artist walks out, the label retains the rights to the artist’s IP worka per the terms of the 360 deal.
- License Deal: “License” means I give you permission to use my work for a limited period. I still own my work and can do whatever I want with it. Here, the artist “licenses” to the label his/her music for a certain period of time. When the artist walks out, s/he retains his/her masters and copyrights. S/he can do whatever s/he likes with his or her work.
- Manufacture & Distribution Deal: In this scenario, the artist signs an agreement with the label to strictly manufacture (produce) and distribute artist’s album. The artist pulls all the weight by doing everything else by himself/herself. The label does not market or promote the artist neither do they advance fees to record the artist’s music. Accordingly, if the artist walks out on the M &D deal, the same result occurs as in a License Deal.
- Profit Sharing Deal: The label advances a little money to the artist so the artist can record his/her music. Both artist and the artist label both market and promote the artist’s music/album. They also both split the profit from sales of the artist’s album. The artist owns his/her masters and copyrights in his/her music.
For the most part, for Nigeria and Ghana based artists, unless you are very unique or a superstar, you will sign a standard distribution record deal. For Nigerian and Ghanaian- American based artists, you would most likely sign a 360 deal. This means it is very tough to walk away from your contract. Think smart. Have a brilliant strategy, get an attorney to assist you if you can afford one.
If you want an M &D or licensing deal, it is possible. If you have implemented some of the strategies I have discussed in prior articles on my website here, then you know to pull off strong highly favorable moves at the negotiating table, you MUST come to the table with a completed EP, strong numbers on your social media (facebook, twitter etc) fan pages, solid media coverage, radio airplay and if you can, online digital distributors i.e. Facebook, Itunes, Amazon etc.
Once you have this, you are in a better position to negotiate for an M &D, licensing, or even a profit sharing deal.