Multiple Sama award nominee Bulelwa Mkutukana, better known as Zahara, has been in the news lately for allegedly being taken advantage of by her record company and for not having a bank account or a signed contract. She has since denied the claims.
Five factors artists need know when signing or negotiation a contract
Amos Khumalo, an attorney at Amos Khumalo Attorneys who deals with entertainment law, gives the following tips:
1. Get the help of an experienced entertainment lawyer
They will review and possibly negotiate your agreements before you sign. Be prepared to pay their services.
2. Have the agreements summarised writing
And ensure that any amendment or addendum to the contract is also in writing.
3. Know when to walk away from a deal
Some recording deals are simply not worth the risk.
4. Ensure you have an exit strategy
It will enable you to cancel the agreement in the event that the other party (such as the recording company) does not perform. Equally important is to ensure that the agreement has a duration clause.
5. The obligations of the other party must also be set out in writing
It must be clear, for example, when your royalties are payable, how they are calculated, who pays for promotional costs and what costs may be recouped. Equally important is for you to clarify your intentions if the other party does not perform, eg cancellation of the agreement or the right to audit your recording company in order to ensure that you are getting your fair share of the royalties due to you.
Tips for dealing with finances
• Assemble a team of experienced advisors to assist you in negotiating and drafting agreements that take into account both your long- and short-term needs. Do not forget the input from your financial planner so that both your short- and long-term financial planning needs are catered for in the contract.
• Diversify your revenue streams. Do not rely only on CD/record sales and performance fees. Be creative and look at character merchandising as well. Develop a licensing strategy which wills enable you to license your name.
• Have an estate planning strategy for your kids and dependents.