Can You Do the Splits? (Royalty Reporting Breakdown)
The process of splitting publishing money is often very confusing, especially because the splits for performing income and other types of income are not the same. For example, a writer might receive 45% of a publisher’s performing right receipts and 67.5% of a publisher’s mechanical right receipts.
To help you understand how splits typically work, here are a series of common scenarios that get progressively more complex. For novices (and even non novices), it is often useful to make diagrams with summaries at the end; as I have done here. These examples show the ultimate disposition of $100 in earnings, but can also be viewed as showing how 100% of income is split.
Artwork by Jake Standley
1. John is a 100% writer and Freudian Slip is the 100% publisher.
Diagram 1:
Summary
Performance income:
Performing right society pays $50 to John as writer share.
Performing right society pays $50 to Freudian as publisher share.
Other income:
Source pays Freudian $100. Freudian pays John $50, or 50% as writer share.
Thus Freudian pays none of its performing right receipts to John, and 50% of all other receipts to him.
2. John and Trevor are each 50% writers and Freudian Slip is the 100% publisher.
Diagram 2:
Summary
Performance income:
Performing right society pays $25 to John as a writer and $25 to Trevor as writer share.
Performing right society pays $50 to Freudian as publisher share.
Other income
Source pays Freudian $100. Freudian pays $25 (25/100, or 25%) each to John and Trevor as writer shares. Freudian retains $50 or 50%
Thus Freudian pays none of its performing right receipts to any writer, and 25% of other receipts to John and 25% to Bill.
3. John is the sole writer and has a 50%/50% co-publishing deal with Freudian Slip Publishing.
Diagram 3:
Summary
Performance income:
Performance right society pays John $50 as writer share.
Performing right society pays Freudian $50, which pays John 50%, or $25, and retains the same amount.
Other income:
Source pays Freudian $100. Freudian pays John $50 as writer (50/100, or 50%) and $25 as publisher (25/100, or 25%) while retaining $25 (25/100, or 25%)
Thus Freudian pays John 50% of performing income and 75% (50% + 25%) of other income.
4. John is the sole writer and has a 50%/50% co-publishing deal with Freudian Slip Publishing, which gets a 10% administration fee off the top.
Diagram 4: Mechanical Synchronization and Non- performance income & Public Performance
Paid by the performing right society to the writer and this case, to Freudian, which administer 100% of the song. We are assuming that there is no contractual right to double the administration fee on the publisher’s share of performance income.
Summary
Performance income:
Performing right society pays John $50 as writer share. Performing right society pays $50 to Freudian. Freudian then pays $22.50 to John’s publishing company (22.50/50 or 45%), retains an fee of $5 (5/50, or 10%), and retains $22.50 (22.50/50, or 45%) as its publisher. Note that 45% + 45% + 10% = 100%.
Other income:
Source pays $100 to Freudian. Freudian pays 45% to John as writer (45/100, or 45%) and $22.50 as publisher (22.50/100, or 22.5%), or $67.50 (67.5%) total, while retaining $32.50 (32.50/100, or 32.5%).
Thus Freudian pays John 45% of performing income and 67.5% of all other income.
5. John is the sole writer and has a 75%/25% co-publishing deal (in his favor) with Freudian Slip Publishing.
Diagram 5:
Summary
Performance income:
Performing right society pays John $50 as writer share.
Performing right society pays Freudian $50 as the 100% administering publishing company. Freudian then pays John’s publishing company $37.50 (37.50/50, or 75%) and retains the remaining $12.50 (12.50/50, or 25%)
Other income:
Source pays $100 to Freudian. Freudian pays $50 to John as writer (50/100, or 50%) and 37.50 as publisher (37.50/100, or 37.50%), or $87.50 (87.5%) total, while retaining $12.50 (12.5%).
Thus Freudian pays John 75% of performing income and 87.5% if all other income.
6. John and Bill are each 50% writers. John kept his publisher share, but Bill has a 50%/50% co-publishing deal with Freudian Slip Publishing
Diagram 6:
Summary:
Performance income:
Performing right society pays $25 to John as writer share and $25 to Bill as writer share.
Performing right society pays John’s publishing company $25.
Performing right society pays Freudian $25. Freudian then pays $12.50 (12.50/25, or 50%) to Bill’s publishing company while retaining $12.50 (12.50/25, or 50%) Bill’s publishing company while retaining $12.50 (12.50/25, or 50%).
Other income:
Source pays John’s publishing company $50. John (as the publisher) sends half to himself as songwriter (he really doesn’t have to do this) and retains the rest as publisher share.
Source pays Freudian $50. Freudian pays Bill $25 25/50, or 50%) as his writer share plus $12.50 (12.50/50, or 25%) as his publisher share. Freudian retains $12.50 (12.5/50, or 25%). Note that Freudian pays Bill a total of 37.50 or (75% of it’s receipts) and retains 12.50 (or 25% of its receipts).
7. John wrote 80% of the song and Bill wrote 20% of the song. They agreed to give half of the publishing money to the film company that was using it as a major motion picture opening title song. Of the remaining half of the publishing, John had a 50%/50% co-publishing deal with Freudian Slip, and Bill had a 75%/25% co-publishing deal (in his favor) with Freudian Slip Publishing.
Diagram 7:
Summary:
Performance income:
Performing right society pays John $40 (80% of $50) and Bill $10 (20% of $50) as writer shares.
Performing right society pays film company $25, or 50% of the publisher share.
Performance right society pays Freudian $25, which pays $10 to John’s publishing company (10/25), or 40% of receipts) and 3.75 to Bill’s publishing company (3.7525, or 15%) while retaining $11.25 (11.25/25, or 45%).
Other income:
Film Company collects $25 (we assume that the contract is such that the film company does not collect any writer share of income).
Freudian collects $75 and pays John $40 (40/75, or 53.3%) as writer, and $10 (10/75, or 13.3%) as publisher. Freudian pays Bill $10 (10/75, or 13.3%) as writer, and $3.75 (3.75/75, or 5%) as publisher. Freudian retains $11.25 (11.25/75, or 15%). Note that 53.3% + 13.3% + 13.3% + 5% + 15% = 100% of Freudian receipts.
