About X Factor record deals and management contracts
I decided to jump straight into the rabbit hole and check what I could find out about X Factor UK contracts. After little bit of googling, I must say that I found out quite a lot of things.
In December 2008 there were many articles in newspapers based on an exposé made by Daily Mirror. Headlines mostly screamed about how people were duped, since winner’s contract (then officially worth 1 million pounds) was actually overall deal which included 150.000£ advance (out of which expenses must be paid) for a first album and the million pound deal was actually completed only after four albums.
But this exposé and a bunch of other articles reveal many interesting things:
The (X Factor) contract was 80 pages long in 2008. It also was enforceable “anywhere in the world and solar system”. The contract also contains a clause protecting Simon Cowell, stating that artists must not make any statement which “may be considered unduly negative, critical or derogatory of the company – including its personnel and, in particular, Simon Cowell”. x
My comment: No wonder 1D doesn’t even dare to comment Cowell’s upcoming fatherhood to the press, if their contract has a similar clause.
All 12 contestants who go to the liveshows were given three weeks to peruse and sign the contract before the beginning of each series (live shows) and offered a choice of three independent solicitors, whose fees were paid by Cowell. x
Artists who were voted out of the show are still under contract to Cowell’s label for up to three months. x
Winner gets £150k advance, 2nd gets £75k, 3rd £50k and 4th £10k. x
Apparently the winner and runner-ups can be signed to any of Sony’s record labels like RCA or Epic Records, not only Syco. But being in top 4 doesn’t automatically mean a record deal, even though advances have been specified in the contract.
So the initial contract not only binds the winner, it’s also applicable to top 4. But I’d assume that all the pre-show deals expire after the series has ended, and then they’re just renewed (or in some cases renegotiated) based on the initial contract for longer tenure, since not every act gets the deal after the show.
The interesting thing is that Rebecca Ferguson’s (runner-up) deal with Modest was dated to be starting from October 2010. x Which could mean that either the contract which live show contestants sign has already some kind of clause about Modest managing them (or the top 4?) during the live shows, or the renegotiated deal is retroactive from the point when they entered the competition. Not sure if this is possible under British law?
The winner had to sign up with the agent, Modest Management, in a deal having the potential to last 14 years. x Based on this it seems like Modest has a legal option for a possibility to lengthen winner’s management deal after the initial deal has been completed. This is the tricky part here. Sadly we don’t have any clearer wording of this particular clause.
The winner gets 15 per cent from single and album sales. Headlining a tour brings 7.5 per cent of show profits and 15 per cent of merchandise sales. x
The record label has “final say” over tracks for albums, and can choose producers and single releases. x
Another clause states that artists leaving the show may have to give 5 per cent of all future live earnings to Cowell for a year. x
Next, let’s take a look of the X Factor Australia deal as a comparison…
In Australian version of X Factor (2012), the contract was mere 66 pages and X Factor contestants must hand over the rights to their performances, including to be used in non-English speaking markets.
”Without limiting the foregoing in any way, the company [X Factor] shall be entitled to: dub my voice in any language.”
X Factor can also use personal information about X Factor contestants, including photographs, likenesses and biographical information, and transmit those personal details ”throughout the Universe”.
Buried deep in the fine print, the contract reads, ”I hereby licence to the company all rights in the composition(s) for the full period of copyright including any renewals, reversions, revivals or extensions throughout the universe…in all media and formats throughout the Universe.”
The contract demands that these rights to the performance can be used, as well as passed to others, to exploit by all means and in all media formats, ”whether now known or hereafter invented throughout the Universe.”
In addition to appearing on the show for nothing, contestants also agree to promote it without pay for one month after it finishes screening.
They also agree to a gag clause preventing them speaking to the media without permission.
”Should I be contacted by a member of the press I hereby undertake to refer them to the company’s publicity office,” the contract states.
Contestants also agree:
- to disclose any criminal offences they have committed, except driving infractions;
- to sign recording and management agreements based on ”independent legal advice” provided by one of three lawyers ”introduced by the company”;
- not to perform on any other TV or radio shows without permission.
Clearly there are some similarities between Australian and UK contracts. This is only logical, since many TV franchises use the contracts drawn either in the UK or the US. I personally know at least about one reality show contract which wasn’t even applicable in my country, but was still enforced upon contestants, it also included a gag clause with a severe penalty.