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    Grand Right Licensing and Rental Fees: James M. Kendrick, Esq

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    Grand Right Licensing and Rental Fees: James M. Kendrick, Esq

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    Michael Crawford
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    Grand-Right-Licensing_0

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    Grand Right Licensing and Rental Fees: James M. Kendrick, Esq

    Uploaded by

    Michael Crawford

    Copyright:

    © All Rights Reserved
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    of 5

    Grand Right Licensing

    and Rental Fees


    by
    James M. Kendrick, Esq.
    with the assistance of Laura N. Stevens, Esq.
    and C. Katherine Baron, Esq.

    Law Offices of James M. Kendrick LLC


    254 West 31st Street, floor 15, New York NY 10001 USA
    Tel: +1 212 461 6950
    Fax: +1 212 810 4567

    E-mail: [email protected]

    [email protected]

    [email protected]

    Updated April 2011


    for the American Composers Forum

      1  
    Licensing Grand Rights

    • Dramatic performances are not licensed by the performing rights societies (ASCAP,
    BMI, SESAC).
    • Instead, dramatic performances are licensed by the copyright owner, usually either a
    commercial music publisher or a self-published composer. Some composers use
    agents for this licensing.
    • A license of dramatic rights (known as “grand rights”), includes the following
    elements:

    Elements of a Grand Right License


    • Legal name of licensor
    • Legal name of licensee
    • Work to be performed
    • Performers
    • Dates of performance
    • Fee (to be discussed)
    • Option to extend the license?
    • Special conditions (e.g., right to arrange, performance with piano or recording only)
    • Reservation of all rights not specifically granted

    Grand Rights Fees

    • Grand right fees are normally based on a percentage of box office receipts.
    • For Broadway works, the normal fee under the Dramatists’ Guild Approved
    Production Contract is 6% of gross box office fees. This is apportioned 2% to the
    music, 2% to the lyrics and 2% to the book.
    • Larger opera houses will pay a percentage of box office fee. The percentage may
    vary from the APC norm based on the work and the company.
    • Smaller opera companies, universities and most ballet companies will not pay a
    percentage. For these groups, a flat fee should be charged.

    How to Calculate a Flat Grand Rights Fee

    • Calculate potential box office


    o Average ticket price times number of seats
    • Multiply the result by the normal percentage for the type of work and performance.

      2  
    Percentage of Box Office Calculation

    • For example, assume the following:


    –Number of seats: 1,000
    –Average ticket price: $10
    –Total potential box office: $10,000 (1,000 x 10)
    –Appropriate percentage for work and performer: 6%*

    Total expected royalty per performance: $600 ($10,000 x .06)

    Actual yield will be dependent on attendance and mix of prices of tickets actually
    purchased

    *Note: the actual percentage of box office is determined by negotiation in each case.

    Flat Fee Calculation

    • For example, assume the following:


    –Number of seats: 1,000
    –Average ticket price: $10
    –Total potential box office: $10,000 (1,000 x 10)
    –Appropriate percentage for work and performer: 6%*
    –Total royalty per performance: $600 ($10,000 x .06)

    *Note: the actual percentage of box office is determined by negotiation in each case.

    Special Note re: Flat Grand Rights Fees

    • Companies will often seek a reduction from the straight “percentage of box office”
    equivalent flat fee because they do not expect to sell out every performance.
    Whether or not to reduce a flat fee because of less than expected 100% attendance
    is a decision for each individual licensor.
    • If this comes up, it would be reasonable for the music copyright owner to suggest to
    the company that they agree to a true percentage of box office deal. That way, if
    attendance is off, the company and the owner will share the reduction
    proportionately.

    Multi-Work Programs

    • For works performed in multi-work programs, the percentage should be pro-rated,


    normally based on the running time of the complete program. For example, if there
    are two 45-minute operas on a single program, each work would be worth one-half
    of the total percentage.

      3  
    Special Note for Ballets

    • Ballets generally contain two elements: music and choreography.


    • There sometimes is an additional element: the scenario (if devised by someone
    other than the composer or choreographer).
    • When licensing ballet music, bear in mind that companies generally also pay
    choreographers or their heirs for rights to present their works, particularly if the
    choreographer is not affiliated with the dance company (e.g., Balanchine, Robbins).
    • It therefore is reasonable to reduce the fee charged for the music to take into
    account the interest of the choreographer (and the scenarist, if any).
    • For example, if a music copyright owner is licensing a 20-minute ballet on a program
    of three 20-minute works with outside choreography, it would be appropriate to
    pro-rate the desired percentage to 1/3 of the total.
    • In addition, it also would be reasonable to reduce that amount to some extent
    considering that the company also needs to get a license of the choreography. The
    amount of the reduction is in the licensor’s discretion.

    • For example, assume the following:


    –Number of seats: 1,000
    –Average ticket price: $10
    –Total potential box office: $10,000 (1,000 x 10)
    –Appropriate percentage for entire program: 6%
    –Total royalty per performance: $600 ($10,000 x .06)
    –Work licensed is 20 minutes of 60-minute program: .33 of total

    Therefore, the total royalty per performance: $200 ($600 x .33) (before any
    adjustment for expected less than full attendance)

    • Now, let us assume that the choreographer is not affiliated with the company:
    –Total royalty per performance: $200
    –Part of total creative package attributable to music: 50%

    Therefore, the royalty actually charged by the music copyright owner to the ballet
    company would be $100 ($200 x 50%)

    Please note that the above allocation of 50% music/50% choreography is for illustrative
    purposes only. It does not represent any agreed industry standard. Each situation must be
    considered individually.

      4  
    Rental Fees for Grand Right Performances

    • Note that rental fees for grand right performances may be charged in addition to the
    grand right licensing fee.
    • Alternatively, they can be included in the fee.
    • One commonly-used guideline is that the rental fee should be approximately half of
    the grand right license fee. However, this is entirely within the discretion of the
    copyright owner.

    Rental Fees for Non-Dramatic Performances


    • There are no industry standards or guidelines for rental fees. Each publisher
    establishes their own fees.
    • Generally, fees vary by:
    –Duration of the work
    –Budget size of the orchestra or other ensemble
    –Number of performances (e.g., discount for multiple performances in the same
    series or season)
    –Whether the use is for live performance only or whether additional electronic
    distribution is planned

    This material is a brief introduction to the topics discussed. It is not intended to be a


    substitute for professional legal advice. Many factors will affect the applicability of the
    general principles stated above to a particular situation. If in doubt, we strongly
    recommend consulting a legal advisor or other music licensing professional.

    © 2011 by the Law Offices of James M. Kendrick L.L.C.

      5  

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