MFN: What “All In” Means for a Music Supervisor
MFN is a key concept for music supervision
A most favored nation clause, MFN, is a defined as “a commercial treaty in which the signatories agree to accord each other the same favorable terms that are offered in agreements with any other nation.”
How does this relate to music licensing?
A music supervisor will come across this basic concept countless times in their career and understanding it in its entirety is crucial.
MFN, as it relates to music licensing, simply means that if a party attaches this clause to their quote, they are due the highest negotiated fee as either the other parties involved in the song (master holder, publisher, co-publisher, etc.), or sometimes rest of the songs used in the production.
Let’s say you want to license a song called “How Do You Do?” for a minor spot in a commercial. I get the quote back from the publisher and they quote the song at $500 or MFN as to the master holder. Minutes later I get a quote back from the master holder with a $1,000 fee attached for the specified use of the song. Because of the MFN clause attached in the publisher’s quote, I am responsible for paying them the same $1,000 fee as the master holder, making my “all in” for this song $2,000.
If there are multiple publishers for the song and each publisher attaches an MFN clause to their quote, I am responsible for paying each person the highest negotiated fee.
An MFN clause can also be applied to other tracks within a project. If we were using “How Do You Do?” for a movie and they insisted upon an MFN clause as to the rest of the songs in the project, the music supervisor is responsible for paying the owners of “How Do You Do?” the highest fee of any other song used in the movie.
This can be a pain for music supervisors if they are dealing with large acts that require high licensing fees. Sometimes these acts will be generous and lower their licensing fees knowing there is an MFN clause on other songs.
The only limitation to applying this clause to the other songs in the film is in relation to its use. The song with the MFN clause will get the highest fee negotiated for the other songs used in the same manner.
It is important for a music supervisor to understand the wiggle room they have for negotiating, and knowing what it will cost them to be “all in” for a track. It is the music supervisor’s responsibility to make sure these loose ends are tied up properly to protect themselves against possible future lawsuits.
Disclaimer: This article was not written by a lawyer and the information is the opinion of the author only. This article is not intended as legal advice or counsel. The author does not make warranty or representation as to the accuracy of contained statements.
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