What is Cross Collateralization?

Be aware of terms of recoupment

Cross Collateralization is a clause in recording and publishing agreements that allows the record label or publishing company to recoup outstanding advance balances from one album release with revenues and the next release(s).

They can also recoup in the case of a multiple rights deal (like a 360 deal) from various sources such as music publishing royalties, concert fees, merchandise sales, etc.

If you are ever offered an advance, it is important for you to know the terms of recoupment that are set between you and your label or publisher. You can learn more about cross collateralization here.