LA Reid DBanj Kanye West

Kanye West Signs #D’Banj, What’s Really G.O.O.D About the Music Deal?

In Business Law, Music Law, Public Relations & Media by FASHIONENTLAW™

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By now, music insiders have heard reported news that Kanye West aka Yeezy just signed Nigerian acts D’Banj and Don Jazzy to his record label, G.O.O.D Music. Both Nigerian acts are Vice President and CEO, respectively, of their Nigerian based label Mo’Hits Records. The news broke a little over a week ago, in a fragmented manner. First, the Nigerian acts tweeted the news, later there was some sort of press release, albeit very scanty. This past Friday, the Nigerian acts further released a video purporting to be evidence of the signing of the music contract with Kanye West. The video shows Yeezy signing (4) documents. After he signs them, D’Banj holds up one of these documents and appears to infer that the document he held was the official contract evidencing their new relationship. So far, the facts are silent as to what kind of music contract(s) they signed.

PR/MARKETING/MEDIA TIP

“TIP #1: Artists, if you sign deals you deem significant to publicize to the media, fans and the public, call an official press conference and answer press questions on “who, what, when, how and why?” The packaging and presentation of the major deal you just signed, to the media/public, is just as important as the deal itself.

TIP #2: If you forego a press conference and instead do a press release, you should still answer the “who, what, when, how, why?” A hap-hazard/fragmented approach to releasing important news like the above is simply not a good look.

WHO IS D’BANJ?
Moving on. . . First things first. If you are reading this and wondering, “who is D’Banj?” Welcome. I had the privilege, on behalf of my publishing company, Ladybrille, to conduct D’Banj’s first ever exclusive interview in the USA in his first ever visit to the U.S.A in 2007. He was absolutely hilarious back then. I also asked him if he planned to expand into the USA. Who would have “tonk it” that it would be on this level? You may read my 2007 interview  here to meet D’Banj.

INTELLECTUAL PROPERTY- TRADEMARK REGISTRATION

I’ve done a little digging and it appears, at the time of authoring this article, that neither D’Banj’s “Koko” or “Mo’Hits” are registered trademarks. I stand corrected if this is inaccurate.

TIP #3: Artists, building your brand equity means you should trademark your brand’s name, logo, slogan etc. You should have your marks trademarked in your country of origin and the country or countries you do business/will do business. Get the basics in place, first. Also be sure to seek the services of an attorney on such legal matters.

LEGAL SHENANIGANS

Now Let’s Answer the Question, “What’s Really GOOD with the D’Banj and Kanye West Music Deal?”

CHALLENGES WHEN FOREIGN ACTS TRY TO GO MAINSTREAM IN AMERICA

To address the D’Banj/Yeezy deal, we have to first address the issues foreign artists encounter when trying to penetrate the U.S mainstream market. The key issues are as follows:

I. Immigration

Have you ever wondered why it is SO TOUGH for foreign artists to break through to USA mainstream music markets? Take for example South Korean artists like Rain, BoA and even JYJ. These are all names that have dominated Asia’s music industries. Yet, they have been unable to crack the US markets despite their huge success, their large Asian-American fan base, resources, financial backing and talents. Why? Is it the accent? The looks? Is mainstream America less receptive to foreign artists? In JYJ’s example, last year, South Korea’s music industry went “bananas” when Kanye West, yes the same Kanye who just signed a deal with D’Banj, collaborated with JYJ and even announced more projects underway. The group tried to do a tour in the USA but that was unsuccessful. Why? One prevalent answer given was immigration issues.

In many instances, despite a signed deal between a foreign artist and an American label, immigration issues tend to be a big hindrance that precludes these artists from becoming successful in the USA. This is because the artist-visa process can be an arduous long hurdle that can be quite difficult to overcome, regardless of how big deal the artist is overseas. In our D’Banj case, for example, if D’Banj’s deal with Yeezy calls for D’Banj to perform in the USA, then as a Nigerian Citizen, D’banj will need appropriate legal documents to work in the USA. Without these documents, he cannot perform in the USA.

What are the documents D’banj might need?
a. P1 Visa (If D’Banj performs with his band mates under Mo’Hits Records then he needs a P1 visa.)
b. O-1 Visa (If he performs as an individual, whether paid or non-paid, he needs an O-1 visa.)

II. Artists Development: The immigration issue is not the only hindrance that precludes a foreign artist from being successful even after a signed deal. Artist development is also an issue. American labels remain reluctant to invest in foreign acts because they see little or no return on investments. The amount of time and resources that go into grooming these acts into a “product” that mainstream America would resonate with, many times, from a label standpoint, is simply not worth the investments.

In the Kanye West and D’Banj scenario, D’Banj already comes, for the most part, groomed courtesy of “The Nigerian swagger/DNA.” (YUP! 🙂 ) Further, he has the capital to invest his own monies and probably will do so working with Yeezy. In my view, as I see it, D’Banj is buying Yeezy’s name and reputation to strategically position himself to penetrate mainstream America. Simple. Nothing else to it. D’Banj has the money to do so. Yeezy is a willing participant, so why not? For D’Banj to be successful, especially since his money is on the line, he MUST improve how he communicates with American media. He needs to be a lot more articulate than I have observed, so far, with the media so the media can help him further promote his brand. Nevertheless, his timing is perfect as America’s appetite continues to increase for diverse world music and world beats.

Having addressed the above issues, let’s try to figure the kind of agreement Yeezy signed with D’banj and what it really means?

III. FOREIGN LICENSING AGREEMENTS

First, to date, there is no clearly articulated information on what kind of deal D’banj signed with Yeezy’s G.O.O.D music. However, here are the key facts we know that guide us into a discussion and analysis of the deal points in a Foreign Licensing Agreement.

1) D’Banj is a Nigerian citizen;
2) D’Banj is an artist with an existing catalog of music;
3) D’Banj is most likely spending his own monies working with Yeezy to use Yeezy’s name and reputation;
4) D’Banj is now signed with Yeezy and intends to produce a new album with Yeezy;
5) D’Banj wants to continue to live in Nigeria

With these facts, our discussion leads to Foreign Licensing Deals where a USA label seeks to do business with foreign artists and vice versa. So, let’s take a look at some of the deal terms in a Foreign Licensing Agreement.

First, Let’s Clarify G.O.O.D Music’s Role as a Record Label
G.O.O.D Music, like other record labels, is responsible for:

  • Developing the artist (my statement on artist development above should now make sense to you)
  • Working with producers (If indeed Don Jazzy is also signed to G.O.O.D music as a music producer, now you get why Yeezy would do so. Don Jazzy is a music producer who orchestrated the sound we now know to be D’Banj’s. He has a great chemistry with D’Banj, has also spent considerable time in the UK and has an idea of what the West is looking for. So, he would be fine tuning D’Banj’s sound for the US market under Yeezy’s label.)
  • Production (studio time, mixing and mastering included)
  • Marketing and Promotions
  • Distribution

Who are the Parties?
Licensor- D’Banj/Mo’Hits Record
Licensee- Kanye West/G.O.O.D Music

Lisensor- Don Jazzy/Mo’Hits Record
Licensee- Kanye West/G.O.O.D Music

For easy reading, my focus is on D’Banj although a similar analysis applies to Don Jazzy.

What is Licensed?
A license is where a Licensor (the one who owns the intellectual property rights) grants limited permission to the Licensee (the one who seeks the intellectual property) to engage in an act (sell the intellectual property of Licensor) that would otherwise be illegal. The Licensor still retains all intellectual property rights in what he or she licenses.

In this instance, Licensor (D’Banj/Mo’Hits) licenses his existing masters to Yeezy/G.O.O.D Music. Future masters i.e. the album D’Banj informs the media and public he will be preparing could also be a negotiated deal point in the licensing agreement with G.O.O.D Music.

NOTE: In my explanation that I offer, there is no actual record contract under this scenario. It is a licensing deal to sell existing and future masters (depending on the agreement) to G.O.O.D music.

Why Would D’Banj Enter a Foreign Licensing Deal With G.O.O.D Music?
• D’Banj would have a new territory (USA, Europe etc.) open to him
• D’Banj would increase his bottom line i.e. profits based on record sales
• D’Banj can and could leverage the power of Yeezy/G.O.O.D’s music connections to build an audience in the USA Market.

What Rights Flow to Yeezy the Licensee?
• Depending on the distribution deal brokered by both parties, G.O.O.D music could be Mo’Hits distributor for all territories in the US, Europe etc. while Mo’Hits handles Africa.
• The licensing deal could also give Yeezy worldwide distribution and sale of D’Banj’s masters as well as permit Yeezy to sub-license D’Banj’s intellectual property to other licensees that would be interested in acquiring the license.
• Yeezy can duplicate and sell D’banj’s current masters
• Yeezy would be responsible for manufacturing, marketing and promoting D’Banj
• Yeezy can publicly perform and broadcast D’Banj’s music and also use his image, likeness etc. in exploiting his license.

What About D’Banj’s Sub-Publishing Rights?

  • When we speak of “publishing” in music, we refer to the actual songwriters who author the songs or the music publishers who buy the rights to these songs off the songwriters. A music publisher administers the copyrights of a song, licenses the songs to record labels/third parties and collects royalties for the songwriters.
  • When foreign songwriters are involved, we refer to the publishing agreements they enter into as sub-publishing agreements. In this instance, on the publishing end, D’Banj can have ASCAP and BMI (local USA performance rights organizations) manage his sub-publishing rights. For a small fee, these organizations can collect and manage D’banj’s monies so he doesn’t have to, a system sorely lacking in Nigeria. Ideally, if Nigeria had its own functional BMI/ASCAP organizations, its US counterparts would forward monies collected to these organizations to be remitted to D’Banj.
  • What does an affiliation with BMI or ASCAP mean? It means if D’Banj’s songs are played in an American hotel, restaurant, radio, TV, movie, streamed on the internet, played in grocery stores, or fitness centers, D’Banj does not have to individually track all of these organizations to pay him. That is what BMI/ASCAP does.

Is this Foreign Licensing Deal Exclusive to Yeezy’s G.O.O.D music?

  • Technically, it would make sense for the parties to have G.O.O.D music be the exclusive distributor of D’Banj’s masters, in the USA and other contracted markets. However, D’Banj did have a recent collaboration with Snoop Dogg, the terms of which could affect the exclusivity clause G.O.O.D music might want. So the answer here would be, “it depends.”

What Kind of Payment Will D’Banj Receive?

  • Royalty for each record sold, payment of which is made to D’Banj
  • An Advance. Since Advances are recoupable and D’Banj is a multi-millionaire plus he is not necessarily looking to leave Africa to become a USA resident alien any time soon, the advance, if any, should be minimal.  I wouldn’t be surprised if D’Banj is footing a lot of the monies involved in the marketing and promotion of his brand in more of a “hybrid” foreign licensing agreement.

NOTE: Yeezy is a successful artist and producer but as a businessman, he is still new at this. G.O.O.D music record label is relative new. The first artists John Legend and Common, according to public records, were signed in 2004. Then, there was a four year gap before the next artist Kid Cudi was signed in 2008. Yeezy like all other similarly situated emerging music label owners, is figuring out the business side of music. And as it stands, I won’t be surprised if D’Banj does a lot of figuring things out while with the label as well.

How Will Payment Be Received?
For foreign licensing deals, it makes sense for a licensor (D’Banj) to specify that payment be made through wire transfer given the length required to clear foreign checks.

What About The Accounting?
Accounting is an important clause in any licensing agreement. For Foreign Licensing Agreements, a Licensor (D’Banj) would want to be paid as frequently as possible, usually quarterly. A Licensee (Yeezy), on the other hand, would want to pay the Licensor semi-annually.

What About Audits?
Assuming the Licensor (D’Banj) receives an accounting of all monies from Yeezy. Assuming also that D’Banj feels strongly that the accounting is not correct, what are his remedies? Such remedies need to be accounted for way before that day arrives. It is done through the audit clause in the contract that gives D’Banj the right to inspect the books, usually within a year that the accounting is done.

What About The Release Clause
This is a common clause in a foreign licensing deal. It simply indicates that if Yeezy does not release D’Banj’s masters in the USA, Europe etc. say within 90days, then all the rights in that masters returns to D”Banj.

What is the Duration of this Kind of License Agreement?
“Be careful who you get in bed with” remains a common saying in the entertainment industry. If there is anytime to practice short term commitments, this is it. No long term. 3-5years is typical.

What About the Scope of License?

  • It would cover D’Banj’s existing masters and whatever future masters have been negotiated, given the new album D’Banj plans to record?

Copyright Infringement/Indemnification Clauses

  • The Licensee (Yeezy) would be wise to have an “indemnification” clause in his agreement that “indemnifies” him from liability should one arise claiming copyright infringement for use of D’Banj’s music/music catalog, among other things. There should also be a clause to recoup attorney fees and also a right to withhold monies from royalties that would have to be paid for litigation and if a judgment is ruled against Yeezy.

Conflict of Laws, Jurisdiction & Arbitration

  • Anytime foreign parties do business, we must talk conflict of laws. Whose laws govern when the relationship goes sour i.e. breach of contract? Here, this is a no brainer.
  • First, while D’Banj might be popular in Nigeria and Africa, he has no major sales in the USA to command a stronger bargaining power than Yeezy. So, you can bet the terms will be more favorable to Yeezy.
  • Second, Nigeria’s legal justice system pales when compared to the USA’s, especially as to protection of artists. The parties most likely have agreed that all disputes will be resolved via arbitration or through trial in USA courts, irrespective of conflict of laws. In that same vein, the USA courts also probably have jurisdiction over D’banj (the power of a court to force a defendant to come answer a lawsuit before it) in the event of a suit.
  • Further, in most contracts, expect to also see an arbitration clause.

What About the Sell Off Period?
Under this clause, regardless of who breaches the agreement, the most important thing is the ability to sell off i.e. clear out existing inventory of the products even after termination of the contract. This could range from 3months, 6months to one year.

What About the Termination Clause

  • “Be careful who you get in bed with” remains a cardinal rule in the entertainment industry and should be taken very seriously. Always have an exit strategy via the termination clause. The clause should be carefully thought out and not lock you to a point where you can’t get out. In D’Banj’s case, there should and will be a termination clause.
  • For Yeezy, he will want an opportunity to cure the breach, if an alleged breach triggers the termination clause.

Enough on this folks. It’s a wrap for me!!

What’s really G.O.O.D about D’Banj & Yeezy’s music relationship? Time will tell! Let’s see how it all shakes out.

Cheers,
Uduak

-Photo description: LA Reid, D’Banj & Kanye West
-Photo- Tweeted pic by D’Banj Camp

Uduak Oduok (Ms. Uduak) is a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her firm’s fashion and entertainment law practice areas. Ms. Uduak has litigated a wide variety of cases in California courts. She has also handled a variety of entertainment deals for clients including network television and licensing deals. Her work and contributions to the creative industry has been recognized by numerous organizations including the National Bar Association, and featured in prestigious legal publications in the USA: ABA Journal and The California Lawyer Magazine. She is also the author of Fashionentlaw™ and also has over two decades combined hands on industry experience in the creative industry which includes modeling, retail, fashion production, public relations, digital media, journalism and publishing. For further inquiries or if you are seeking legal representation, please email (uduak@ebitulawgrp.com). You may also follow her on twitter at @uduaklaw

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