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No. 21Financial Terms
Also called recording fund, budget-based deal, all-in fund, recording budget
A single budget covers both artist advance and recording costs, with the artist keeping any unspent portion.
Neutral
Outcome depends on the fund size and genre; efficient producers benefit, expensive productions create risk.
In a fund-based deal, the label provides a total recording fund from which the artist pays all production costs. Whatever remains after recording is the artist's advance. If the artist records efficiently, they keep more personal income. If recording costs exceed the fund, the artist may have to cover the difference.
Fund-based deals incentivise efficient production. However, if the fund is too small for realistic production costs, the artist either sacrifices income or quality. The fund must be negotiated against the actual cost of the music being made.
The same clause is drafted three ways. These are the positions we see, worst first, so you can tell at a glance which one is in front of you.
The drafting language and the negotiation moves for this clause are part of the workspace.
You have read what the clause means and where the risk sits. The rest is the side-by-side of how it reads when it is against you and when it is not, plus the specific moves that get it there.