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Canadian Music Law: Most Favoured Nations

Most Favoured Nations

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Your 3 Favourite Letters as a Canadian Musician: MFN

MFN stands for Most Favoured Nations. Most Favoured Nations, in the context of music, has nothing to do with the Olympics, Canada Day or international travel.

Within the music ecosystem, it means equality, essentially receiving the same treatment as others. Here are some examples of scenarios where MFN is helpful.

Performances

Let’s say your band is being hired for a gig along with other bands, and they offer you $250 for the performance. If you want to be paid the same amount as the other performers, you can ask for your payment to be on a “Most Favoured Nations” basis. If the venue or promoter agrees that you will be paid $250 on a MFN basis, it means that if they pay another performer $300, they must also pay you $300 (instead of $250).

What if you are one of the opening acts, and the headliner will be paid significantly more than $250? In this case, you can ask that your payment be $250 on a “Most Favoured Nations Basis” with the other opening acts. The outcome being: if the headliner gets $1,000 and the other opening acts get $250, then you will be paid $250. However, if the headliner gets $1,000, and one of the other opening acts get $300, then you should also be paid $300.

Performances – Side Players

If you’re a side player for a band, and the band leader pays you (along with other side players) to play gigs. In order to ensure that other players aren’t paid more than you, it is possible to ask to be paid on an MFN basis with the other side players. Therefore, if the bass player is paid $200, you (the drummer) should be paid $200 on an MFN basis.

Music Placements

If you have the opportunity for your song to be placed in a film or television series, you should be told how much is available to pay you for the right to use the master and composition. Ensure that you’re paid the same as the rights holders of the other songs in the film or series by requesting that your fees be MFN. An example of this would be if you are paid $1,000 for the master use rights to use the master recording and synchronization license to use your composition, and another musician is paid $1,100 for the right to use their master and composition, then you are contractually entitled to receive the extra $100 for the use.

What happens if your music is being requested for a TV show, but the show has a very popular musician’s song as the theme song? It might be reasonable that the theme song not be within the scope of the music that would increase the price you’re paid.

Master Rights

If you own the master rights in a recording of a song written by someone else, and if you’re offered $400 to have your master be used in a film, you can ask that your fee be $400 on an MFN basis with the synchronization license paid for the rights to use the composition. This request is also relevant if you own the master rights in a recording of a song you wrote, but the publishing rights are controlled by your publisher. In that case, if your publisher can get $750 for the rights to use the composition, and if you agreed to provide the rights to use your master for $400 on an MFN basis with the synchronization license, then you would be paid $750 instead of $400 for the master use rights.

Management Agreements

If you’re starting to work with a manager, and she requests that you pay 20% commission, but you think other artists pay her 15%, you could request that the commission percentage that you pay is on an MFN basis with her other artists. As such, if other artists pay 15% in commission, then you would contractually be required to pay a 15% commission instead of a 20% commission.

Producer Agreements

If you’re producing one song for an artist who has an EP of 6 songs, and are offered $500 to produce that song, in order to ensure that you’re being paid the same as the producers on that EP, you can ask to be paid $500 on a MFN basis (with the other producers on the album on a per song basis). If someone else gets $750, then you would contractually be entitled to that amount as well.

Challenges with MFN

Just because someone is contractually required to pay you on a “Most Favoured Nations Basis”, doesn’t mean that they will tell you they paid someone else more than you, and that they are in turn contractually required to pay you more. One way to find out if you should be paid more than you were initially promised or paid, is to ask others what they were promised or paid. Back to the example of being paid $250 for a gig on a “Most Favoured Nations Basis” with the other opening acts, ask the other openers what they’re being paid. If someone else is being paid $300, you should be paid $300 instead of $250. If another opener is being paid $175 on an MFN basis, they should be paid $250 because you’re being paid $250.

In Closing

Getting MFN is more commonly used in music publishing situations. This being said, if you want MFN you can still ask for it. If you don’t get it, decide whether the offer is worth it. If someone denies providing MFN, it may be that they have something to hide. They may hide the manner in which they compensate others (as compared to yourself) or they may not want other deals to impact your fees.

The other way to get better fees is to ensure you’re in high demand!

Edwards PC, Creative Law is a boutique law firm provides legal services to Music, Film, Animation, TV, Digital Media, Game, and Publishing industry clients. For more info and blogs, please visit www.edwardslaw.ca

 

Regarding music law, Byron Pascoe works with musicians, producers, managers, and music companies to assist with record label agreements, publishing contracts, distribution deals, producer agreements, etc.

 

© 2020 Edwards PC, Creative Law

 

* This article is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.

 

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