Using Cross-Contracts to Transfer or Subtract Royalties ✪

Cross-Contracts can be used to transfer or subtract royalties from one statement to another. The results of a Cross-Contract will be added as Transactions on the Statements.

This feature is available to Curve Pro clients only as part of the Cross-Contracts add-on ✪

Setting up Your Cross-Contract

On each Contract, you will have the ability to add one or more Cross-Contracts that will transfer the royalties from this Contract to another or subtract the royalties of this Contract from one another. To get started, go to your Contract, go to the Cross-Contract area and hit the +Cross Contract button. Per Cross-Contract, there are four fields that you are able to customise.

When - Under which conditions do you want to cross the royalties? And which type of royalties do you want to cross?

Always Transfer Income - Transfers all the income that was processed within a statement. The amount equals the outcome of the income terms on the Contract
Balance is Positive - This option transfers the closing balance of the statement, but only when the balance is positive. When the balance is negative, no transfer will be created.
Balance Is Greater Than Min Payout - This option transfers the closing balance of the statement, but only when the balance is higher than the Minimum Payout of the Contract. When the balance is lower than the Minimum Payout, no transfer will be created.
Always Transfer Balance - This option always transfers the closing balance of a statement, regardless of this balance being positive or negative. This option can only be used in combination with an Add To process, because there is no use case for subtracting negative balances from other Contracts.

Process – How does the balance of this contract interact with the selected contract.

Add To will add the amount to the new contract & clear this amount from the original contract
Subtract From will deduct the amount from the new contract, BUT will also leave this amount on the original contract.

Contract – Select which contract to interact with per the previous settings.

You will be able to select from a list of Contracts on your client. You can only cross Contracts with other Contracts that have the same Accounting Period Type.

% – Stipulate the share of royalties to be transferred.

Entering 100 will transfer the royalties entirely. Entering 50 will transfer just half the royalties.

The Income & Balances transferred will be that after the Contracts royalty rate has been applied. Once the cross-transaction has transferred to another Contract, no more royalty calculations will be made on this transaction by the receiving Contract.

Selecting ‘Add To’ removes the output from this contract & transfers it from this contract onto another. Whilst ‘Subtract From’ subtracts the output of this contract from the selected, but leaves that output on the original contract.

When you Subtract balances, or Add To balances but not for the full 100%, you need to make sure you don’t risk transferring the same balance twice. When a contract earns $50 this period, leaves this unpaid, and earns another $50 next period so the total balance adds up to $100; over the course of these two Periods a Subtract From - When Balance Is Positive, would in total subtract $150 even though the total contract earnings were just $100, as it would essentially subtract the balance of the first Period twice. In a scenario like this, where the balance isn’t always transferred or paid for the full 100%, a Subtract From - Always Transfer Income or Subtract From - When Balance Is Greater Than Minimum Payout (with Auto-Payment enabled) would be a better solution.

Examples of Common Cross-Contracts

Creating a Summary Statement - With Cross-Collateralization

The most common use case for the Cross Contracts function is creating summary contracts. If you have multiple contracts for a payee, it can be useful to merge them to a summary contract, to give your artist one simple total balance due. You can name the contract for your reference, such as “Artist A – Summary Contract". In the below example, by always transferring the balance, even negative balances will be transferred and cross-collateralized with positive balances from any other crossed Contracts.

When cross-collateralizing multiple Contracts, we recommend marking the Summary Contract as a Summary Statement (on the Summary Contract, not the crossed-from Contracts), this will make sure all income transferred in by any cross-contracts will be displayed in the summary statement’s Sales CSV & data visualisations (essentially removing the need to provide your artist access to the original individual Contracts). For contracts not marked as a summary contract, any incoming cross-contract transfers will solely be added as a transaction and not be displayed as part of the Sales CSV & data visualisations.

Creating a Summary Statement - Without Cross-Collateralization

By only transferring the balance when positive, we ensure a negative balance on this Contract will not be recouped by positive balances on any of the other crossed Contracts to our Summary Contract.

When not cross-collateralizing the Contracts, we recommend to not mark the Summary Contract as a Summary Statement, as the royalties that would be displayed in the Summary Statement's CSV and Analytics may have not actually been transferred.

Subtracting a Songwriter's Income From a Publisher

A common scenario for which cross-contracts are helpful are when you account royalties to a publisher you administrate, but also account royalties to that publisher's songwriters directly.

Imagine a scenario where we take a 10% admin commission on total earnings, and therefore account a 90% royalty to the publisher, minus the total royalties we pay directly to their songwriters. We can set up our publisher's contract so that they earn 90% of all revenue, and add cross-contracts to all the songwriter's Contracts to deduct their royalties from the publisher's contract.

Below is the example of such a cross-contract we'd add to all the songwriter's contracts.

Subtracting a Songwriter's Balance From a Publisher

Sticking to the above scenario, it may be that you only wish to deduct a royalty amount from the original publisher once this royalty is actually being paid to the songwriter. Perhaps the original publisher paid an advance to the songwriter for example, so any income earned by this songwriter should only be subtracted from the original publisher once the advance is recouped and a new payment is due to the artist.

This Cross-Contract type should only be used when the songwriter's Contract has Auto-Payment enabled. This to avoid any unpaid balances to be transferred again in the next Period.

The Impact on the Statement Output

Our first example is that of a " Always Transfer Balance - Add To - X Contract - 100%" Cross-Contract. We can see the balance is cleared from the original crossed from contract and added to the crossed to contract.

Below is the example of the output of a " When Balance is Greater Than Minimum Payout - Subtract From - X Contract - 100%" Cross-Contract. We can see that the Balance paid to the crossed from contract is also subtracted from the crossed to contract. Thanks to Auto-Payment being enabled on the crossed from Contract, we also guarantee this balance is cleared from the crossed to Contract and can not be subtracted again from the crossed to contract in the next Period run.