Recoupment requires that the distributor recoup an advance before paying what?

• A. Marketing fees
• B. The artist's salary
• C. Taxes
• D. An additional share of the revenues

Answer: (D)

Recoupment in recording agreements is the process of reclaiming the money an artist gets as an advance from the artist’s future royalties. The advance isn’t treated as earnings the artist can keep until it’s earned back. Only after the label has recouped that advance from the artist’s share of revenue does the artist begin to receive an additional portion of revenues as royalties. That sequencing is why the correct idea is that recoupment occurs before paying an additional share of the revenues. While marketing fees, taxes, or other costs may be recouped in various ways, the specific point tested here is that the advance must be recouped before any further revenue-sharing payments to the artist are made.