No. 07Deal Structure
Joint Venture
Also called JV deal, profit-share deal, joint venture agreement
Artist and label co-own the recordings and split net profits after costs are recovered.
Neutral
Structure is inherently fairer than royalty deals, but outcome depends heavily on how 'costs' are defined.
- Appears in
- Joint Venture Agreement, Recording Agreement
- Topic
- Ownership Structure
- Jurisdiction
- United States
- Reviewed
- July 2026
In plain English
A joint venture deal replaces the traditional royalty structure with shared ownership. Both parties contribute (the artist provides recordings, the label provides funding and distribution), costs are deducted first, and net profits are split, often 50/50. The artist retains a meaningful ownership stake.
Why it matters
JV deals are more transparent than royalty deals because you share in actual profits rather than receiving a royalty percentage on a negotiated base. The risk: if the definition of 'costs' is broad, profits may never materialise.
Where it can land
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.
- Cost definitions are broad and include overhead, staff time, or allocated expenses
- Label controls accounting with no artist audit rights
- Label can dissolve the JV unilaterally
- Profit split is not 50/50 without strong justification
- Marketing and promotional costs counted as recoupable before profit share
- 50/50 profit split after agreed, capped cost schedule
- Artist has audit rights and accounting every 6 months
- Both parties must consent to major expenditure decisions
The language
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.