The Boy Who Knew Too Much… (AKA: how to almost ruin a music contract)

They say that a little knowledge is a dangerous thing. So, I guess that means that having a little more knowledge is more dangerous? I have been called an “expert” on music and digital media rights by people I consider experts. It has been said (by attorneys) that I know more about copyrights than many of my friends who are lawyers who get paid hundreds of dollars an hour to consul their clients. I have helped dozens of my consulting clients, friends and my college students get recording and publishing deals. However, 30 years of experience and knowledge didn’t help me when I was the client and the catalog under discussion was my own.

To begin this tale, we have to travel back in time to when I was doing my first commercially released recording way back in 1993 for Narada (UMG) [which was the soundtrack to the PBS series “Sea Power”]. It was a simpler time. You sold stuff. They counted the sales. There was a warehouse of CDs and there was “breakage”. You got a tiny royalty (after recoupment) and a piece of the mechanical payments. Not too bad. From these humble origins, I began to learn about the ins and outs of record deals. Then, Napster happened in 1998 and everything changed.

Fast forward 26 years and 32 albums later. I am talking to Real Music (a lovely independent label which is now owned by the Cutting Edge Group) about getting a record deal for my new release “Cupid Blindfolded”. After discussions, the label counter proposes that I sell almost my entire library of masters to them and that I would get my own imprint/label. They want to be “in the Michael Whalen business.” I was shocked by their idea and then soon afterwards, thrilled. But the question is: what are 13 masters by Michael Whalen worth in 2019? The odyssey begins…

In the “old” days (pre-streaming), you looked deeply at sales figures and how sales are trending and then you would take a deep discount for the inevitable end of the bell curve where a master recording becomes “deep catalog” or fodder for a music library. You might have given a 2X or 3X multiple to your discounted 1 year average sales figure and you were pretty close on the “value” of a song, album or catalog. Sorta’. People bought and sold catalogs emotionally in the “old” days.