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.

Cross-Contracts are 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 sales that were processed within a statement. The amount equals the outcome of the sales terms on the Contract (so for Profit Share deals, this amount equals the income before the Profit Share % is applied)
Always Transfer Income & Costs - Transfers all sales minus all costs that were processed within a statement. The amount equals the outcome of the sales term minus the outcome of the cost terms (so for Profit Share deals, this amount equals the income before the Profit Share % is applied)
Always Transfer Income, Costs & Reserves - Transfers all sales minus all costs plus all reserves released and minus all reserves taken that were processed within a statement. The amount equals the outcome of the sales term minus the outcome of the cost terms plus the result of any reserves released and taken (so for Profit Share deals, this amount equals the income before the Profit Share % is applied)
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 Minimum 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.

When crossing royalties with a Profit Share deal, we advise using the Flexible Profit Share deal type for the most user-friendly statements.

% – 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, Costs & 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.

Beware, for cross-transactions coming from profit share contracts, Income (& Costs) triggers the total Income (& Cost) prior to the profit share calculation to be transferred. When transferring the Balance from a profit share contract, this will be the Balance after the profit share calculation is applied.

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 & Costs 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. The summary contract must be a Royalty type deal. You can name it 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 sales 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 displayed in the Summary Statement's CSV and Analytics may have not actually been transferred.

Subtracting a Producer's Income From the Main Artist

Another typical use of cross contracts is where a producer’s royalties are to be deducted from the royalties due to the main artist. In the below example, per statement, Curve will look at the total Income of this Contract and deduct it from the Main Artist's balance. Only the Income is of importance, any Costs, Reserves or Transactions on the Producer's Contract are left out of the equation.

Subtracting a Producer's Balance From the Main Artist

In the below example, per Statement, Curve will look at the Producer's Balance and deduct this from the Main Artist's balance when greater than the Minimum Payout. This Cross-Contract type should only be used when the Producer'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 - John Lennon Summary Contract - 100%" Cross-Contract. We can see the balance is cleared from the original John Lennon - Album 2 and added to the John Lennon - Summary Contract.

Below is the example of the output of a " When Balance is Greater Than Minimum Payout - Subtract From - Paul McCartney - 100%" Cross-Contract. We can see that the Balance paid to John Lennon - Album 2 is also subtracted from Paul McCartney's Contract. Thanks to Auto-Payment being enabled on John Lennon's Contract, we also guarantee this balance is cleared from the John Lennon - Album 2 Contract and can not be subtracted again from Paul McCartney in the next Period run.