Cross-Collateralization
Pooling income and costs across projects so profits cover losses first
Related
Cross-collateralization settles costs and income from several projects or channels under one agreement: a loss on one project can be offset against income from another before recoupment and further payments are calculated.
It is common in multi-album, multi-artist and multi-territory deals. The usual mistake is to assume each release is accounted for separately: where the clause applies, a profitable project must first cover the losses. Ask how wide the offset runs: across albums, across artists, across income streams. This is general information, not legal advice.
Read deeper → recoupment
Sources
- 交叉抵扣的范围与结算，参通行音乐产业教材（Donald S. Passman, All You Need to Know About the Music Business）；本文为通识说明，不构成法律意见
Used for fact-checking only; all prose is original.