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No. 20Financial Terms
Also called MFN, most favored nation, parity clause, equal treatment clause
A guarantee that your deal terms will be at least as good as the best equivalent deal the label has signed.
Artist-friendly
MFN protects against being disadvantaged relative to comparable artists, good to have.
A Most Favoured Nations clause means that if the label offers better terms to any other artist in a comparable situation, those better terms must also apply to you. It is most commonly used in sync licensing (all tracks licensed at the same rate) and in compilation deals.
MFN is particularly valuable in sync licensing, if your track appears in the same ad as another track that got a higher fee, MFN ensures you receive the same rate. Without it, a less experienced artist may unknowingly receive less than colleagues on the same project.
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.