Unrecouped deal buyouts
The short answer
An unrecouped deal is a record or distribution contract where the advances and recoupable costs have not yet been covered by your royalties. While that balance exists, the label keeps your royalties. A buyout pays the label an agreed amount to close that balance and release you, funded by our capital partners and repaid from your catalog's future income.
What "unrecouped" really means
Being unrecouped is not a personal debt. You do not owe the label money out of your pocket. What it means in practice is that every royalty your music earns goes to the label first, until the advances and recoupable costs in your account are covered.
That is why many artists with songs that stream every day receive statements showing zero. Three things usually keep the balance high:
- Recoupable costs: recording, video, tour support and sometimes marketing are charged against your royalties, not only the advance.
- Low royalty rates: on a traditional deal you may earn 15% to 25% of what your recordings generate, so the balance comes down slowly.
- Cross-collateralization: losses on one album can be charged against the earnings of another, so a successful record keeps paying for an older one.
The result: the catalog earns, but you do not. And while you stay in the deal, you usually cannot release where you want or on your own terms.
How a buyout works
- Confidential review. You share your contract, recent royalty statements and your current unrecouped balance, under NDA.
- Valuation. We look at what your catalog earns today and what it is likely to earn over the next years, and what the label is likely to accept to close the account.
- Structure. With our capital partners we design the offer: the amount paid to the label, the cash you keep, the term and how the financing is repaid.
- Negotiation. We negotiate with the label or distributor on your behalf. Many labels prefer a clean payment today to waiting years for a slow recoupment.
- Closing. The label is paid, the account is closed and you move to an independent setup, with your catalog working for you again.
What changes for you
| Staying unrecouped | Renegotiating your deal | Buyout with BeatBridge | |
|---|---|---|---|
| Royalties you receive | Usually none until recouped | More, if the label agrees | Flow back to you under the new structure |
| Cash today | None | Sometimes a small advance | A meaningful amount, depending on your catalog |
| Control over releases | Stays with the label | Stays with the label | You go independent for the agreed term |
| Time to results | Years, or never | Months, uncertain | As long as the negotiation takes, usually much faster than recouping |
Every case depends on your contract and what your catalog earns, so we never promise a figure before reviewing the numbers.
Who this is for
- Artists signed to Sony, Warner, Universal or an independent label with an unrecouped balance.
- Artists on an exclusive distribution deal with an advance that has not been recovered.
- Catalogs with steady streaming income, where the balance is going down too slowly.
- Artists near the end of a term or option period who want to leave with cash instead of leaving with nothing.
It is usually not a fit if the catalog earns very little today, or if the contract has no way to transfer or terminate the rights. That is exactly what the first call is for.
What we need to review
- Your record or distribution contract and any amendments.
- Your last two to four royalty statements.
- Your current unrecouped balance (it appears on your statements).
- Streaming and sales reports if you have them.
- Any other advances or funding you have taken against the catalog.
Prefer to stay in your deal?
Leaving is not the only option. If you want to keep your current contract, there are structures that pay you now without breaking it, such as an advance against the income that is paid to you directly, or an advance on older catalog under a separate licence. See royalty advances and funding.
Frequently asked questions
Do I have to pay back an unrecouped advance?
No, not from your own pocket. An unrecouped balance is only recovered from your royalties. The problem is that, while it exists, you do not receive those royalties.
Will my label agree to a buyout?
It depends on the contract and on how the label sees your catalog. Many labels accept a clean payment today when the balance is recovering slowly. We prepare the numbers so the offer makes sense for them too.
How much cash could I keep?
It depends on what your catalog earns, the balance you owe and the contract terms. After a confidential review we give you a realistic range, never a guaranteed figure.
Do I lose my masters?
The goal is the opposite: that you go independent again and control your catalog for the agreed term. The exact rights depend on your contract, and we explain them clearly before you sign anything.
How is the financing repaid?
From the future income of the catalog, under terms agreed in advance. There are no upfront fees from BeatBridge: we are paid on success, when the deal closes.
Is this confidential?
Yes. We work under NDA from the first call, and your label does not hear about it until you decide to move forward.
Who handles your case
Andrés Pesqueira López, Co-Founder. In the music business since 2017, he has negotiated deals with Universal, Sony Music and Ultra Music. BeatBridge has advised on more than $28M in catalog value and works with 40+ buyers and capital partners in 15 countries.
Basics
Find out if you can get out of your deal
A 30-minute confidential call. Bring your contract and your latest statement and we will tell you if a buyout makes sense.
This page is general information and not legal, tax or financial advice. Every structure depends on your contract and a review of your catalog.