Record Producer Deals
The role of a record producer in the creation of a recording is similar to
that of a movie director to a motion picture. That is, the record producer
is primarily responsible for managing the creative process by screening and
selecting songs for the artist(s) to record, getting just the right vocal
performance and deciding the musical arrangements. He or she is also
responsible for handling all administration of booking studio time, hiring
musicians, creating an approved recording budget, overseeing the mixing and
mastering process, and filing union and record company reports.
There are basically three levels of producers: Superstar, Hot
(established), and New. For some unknown reason, producers' royalties
are invariably computed to auger more in their direction than that of the
recording artists' royalties. But, before any records get made, someone
has to hire the producer. Many years ago, record companies used to
negotiate with and hire producers to produce records for the artists until they
realized that their legal department was spending too much time, money, and
intellectual capital on such mundane deals. To fix this, they came up with
a clever idea: let the musicians negotiate with and hire the record
producer and, at the same time, shift the responsibility of paying the producer
from the record company to the artist. Knowledgeable producers almost
always insist that the record company pay them. Musicians, who have
learned the hard way from prior deals, will also insist that the record company
pays the producer. The record companies would do anything not to pay the
producers (or anybody else for that matter).
Royalty payments to record producers, especially superstar producers, are
much greater than that of the artists. Record One royalties means
that record producers are paid for all records sold starting with the
first record. With the obvious exception of having the producer's
advance recouped, there are no recording costs that are charged against the
producer's royalties. This also helps to explain why producers usually get
paid before the artists. Superstar producers are paid on
every record sold with no deductions except for advances. Hot
(established) producers usually have a retroactive to record one
royalty rate that takes effect after recording costs have been recouped at a
combined rate. New (most producers) are paid
retroactively after recording costs at the net rate has been recouped.
You have been given the basics and a starting point, go from there!
™ Digital & Electronic Music Organization, Inc. 
