This article is Part 4 of a five-part series on inheriting music rights and royalties. Here is a list of all the articles in the series:
- Part 1: What Heirs Need to Know
- Part 2: Identifying What the Decedent Owned
- Part 3: How to Locate and Claim Royalties
- Part 4: Maximizing Royalty Income
- Part 5: When to Hire a Publishing Administrator
Introduction
By the time an estate has identified the decedent’s music rights and redirected royalty payments, the most obvious sources of income may already be flowing. However, collecting royalties and maximizing royalty income are not the same thing. The music industry relies heavily on self-reported registrations and fragmented databases, and errors in those systems are common. As a result, additional due diligence is often required to ensure that all available income is being captured.
Catalog Verification
One of the first steps in maximizing royalty income is verifying that the decedent’s catalog is accurately reflected across industry databases. Royalty administrators distribute income only for works that have been properly registered in their systems. If a composition is missing from a database, the associated royalties may never be paid.
Catalog verification may involve confirming that each composition is registered under the correct writer and publisher names, identifying works that were never registered, and locating alternate titles or pseudonyms under which songs may have been recorded. Older catalogs in particular often contain incomplete or inconsistent registrations.
Correcting Ownership Records
Royalty administrators distribute income according to the ownership information recorded in their systems. Those records are typically created when a song is first registered and are often based on information submitted by the writers or publishers at the time.
For this reason, it is important to verify that the ownership information recorded for each composition matches the underlying agreements. This may involve confirming that the correct writers are listed, that the ownership percentages reflect the agreed splits among co-writers, and that the estate’s ownership interest is accurately reflected.
Sometimes, if all of the royalties of a work are not claimed, this can be a trivial matter. However, if other parties are wrongfully claiming income, this may require further action. PROs and other royalty distributors typically do not act as arbitrators of disputes, and expect all parties to work out disputes among themselves.
Resolving Ownership Disputes
If another party claims an ownership interest in the work, the relevant distributor may refuse to change the registration until the dispute is resolved.
Most royalty administrators, including PROs, do not attempt to resolve ownership disputes. Instead, they generally continue distributing royalties according to the existing registrations unless the parties agree to revise the ownership information or a court orders a change. As a result, administrators typically expect disputing parties to resolve ownership issues among themselves.
Resolving these disputes may require reviewing underlying agreements, split sheets, copyright registrations, and other documentation establishing the chain of title. If the parties cannot reach an agreement, it may be necessary to pursue legal action to determine ownership and correct the industry records. Once the ownership issue is resolved, the relevant administrators will update their registrations and redirect future royalties accordingly.
Defunct or Missing Publishers
Older catalogs are often associated with publishing companies that are no longer in business. Small publishers may dissolve, merge with other companies, or sell portions of their catalogs over time. In some cases, the entity listed in royalty databases no longer exists, and the current owner of the publishing interest may not be immediately clear.
When this occurs, royalties associated with the publishing interest may not be actively collected or may be distributed according to outdated records. Determining who currently controls the publishing share may require reviewing old publishing agreements, assignment records, and industry registrations to reconstruct the chain of title.
Statutes of Limitation
Timing can also affect the recovery of misdirected royalties. Under federal copyright law, claims for copyright-related damages are generally limited to a three-year statute of limitations. As a result, if royalties were incorrectly paid to another party for many years, recovery may be limited to payments made within the three years preceding the claim.
For this reason, identifying and correcting ownership issues as early as possible is important. Delays in investigating royalty records may reduce the amount of income that can ultimately be recovered.
Conclusion
Maximizing royalty income often requires more than simply identifying the decedent’s music rights and notifying the relevant royalty administrators. Because the music industry relies on multiple databases and self-reported registrations, errors in ownership records, outdated publishing information, and other issues can affect how royalties are distributed.
Addressing these issues may require verifying catalog registrations, correcting ownership records, and resolving disputes when they arise. In some cases, legal limitations may also affect how much past income can be recovered.
For these reasons, administering music rights can require ongoing oversight even after royalties begin to flow. In the next article, we examine how publishing administrators manage these responsibilities and when heirs may wish to hire one to oversee the collection and administration of royalty income.
If this is starting to sound complicated, it is. In Part 5, we explain when heirs may want to hire a publishing administrator to handle these responsibilities. Go there now.
Christian Carson
Christian Carson is the founding attorney of Carson Law Firm LLC in Cleveland, Ohio. He holds degrees in law and accountancy from Case Western Reserve University. With a strong background in accounting and finance, Christian focuses on real estate, probate, and business law. He is committed to providing practical legal solutions for individuals and small business owners.
