🎥 MCN Contract Breach Overview
Multi-Channel Networks (MCNs) promised to help YouTubers grow their channels, but many have become predatory - locking creators into one-sided contracts, withholding revenue, and failing to deliver promised services. California law provides powerful tools to fight back.
What is an MCN?
MCNs (Multi-Channel Networks) are third-party companies that affiliate with YouTube channels to offer services like:
- Audience development and channel growth
- Content programming and strategy
- Creator collaborations and cross-promotion
- Digital rights management
- Monetization and ad revenue optimization
- Brand deal facilitation
🚨 The MCN Problem
Many MCNs take 20-50% of creator revenue while providing little to no actual value. Worse, they lock creators into multi-year contracts with automatic renewals, making it nearly impossible to leave. When creators try to exit, MCNs often withhold final payments or refuse to release channels.
Common MCN Problems
💸 Withheld Revenue
MCN fails to pay your share of ad revenue, sometimes for months
📋 Broken Promises
Services promised during signup never materialize
🔒 Contract Lock-In
Multi-year terms with automatic renewal, impossible to escape
🚫 Channel Hostage
MCN refuses to release your channel even after contract ends
📚 What You'll Learn
This guide covers everything California YouTubers need to know about fighting MCN abuse.
⚖ California Legal Protections
Business & Professions Code 17200, unconscionable contract doctrine, and Talent Agencies Act implications
🚫 Identifying Breaches
What constitutes a material breach that allows you to terminate the contract
💰 Recoverable Damages
Withheld revenue, interest, consequential damages, and contract rescission
📝 Demand Letter Strategy
How to structure demands for payment and channel release
💡 California is Creator-Friendly
California has the strongest protections against unfair contracts in the nation. Courts here actively strike down unconscionable terms, and the Unfair Competition Law (B&P 17200) provides broad remedies against bad business practices. You have more leverage than you think.
⚖ California Legal Framework
California provides multiple legal theories to challenge MCN abuse. Understanding these strengthens your demand letter and litigation position.
Unfair Competition Law
California Business & Professions Code Section 17200 (UCL)
Prohibits any unlawful, unfair, or fraudulent business act or practice. MCN practices like withholding revenue, failing to deliver promised services, or refusing to release channels can all constitute unfair practices. Provides for injunctive relief and restitution.
Business & Professions Code Section 17500 - False Advertising
Prohibits untrue or misleading statements in advertising. If the MCN made false promises about services, growth rates, or revenue to induce you to sign, this statute applies. Violations can result in injunctions, restitution, and civil penalties.
Contract Law Protections
California Civil Code Section 1670.5 - Unconscionable Contracts
Courts can refuse to enforce contracts that are unconscionable - meaning they are so one-sided as to be oppressive. MCN contracts with hidden terms, excessive revenue shares, or unreasonable lock-in periods may be voidable under this doctrine.
California Civil Code Section 1668 - Void Contract Provisions
Contract provisions that exempt a party from liability for fraud, willful injury, or violation of law are void. MCN contracts purporting to waive your right to sue for fraud or breach are unenforceable.
California Civil Code Section 3287-3289 - Prejudgment Interest
Entitles you to 10% annual interest on amounts owed from the date they became due. If your MCN has been withholding revenue for months or years, the interest adds up significantly.
Talent Agencies Act (Potential Application)
California Labor Code Sections 1700-1700.47
If your MCN acted as a talent agent - procuring employment or engagements like brand deals - without a license, the entire contract may be voidable. This powerful remedy can void contracts with unlicensed MCNs that procured work for you. See our Talent Agency Act guide for details.
Statute of Limitations
| Claim Type | Time Limit | California Code |
|---|---|---|
| Written Contract Breach | 4 years | CCP Section 337 |
| UCL (Unfair Competition) | 4 years | B&P Code 17208 |
| Fraud | 3 years from discovery | CCP Section 338(d) |
| Talent Agencies Act | 1 year | Labor Code 1700.44 |
| Accounting/Fiduciary Duty | 4 years | CCP Section 337 |
⚠ Act Before Limitations Expire
The Talent Agencies Act has only a 1-year statute of limitations. If your MCN procured brand deals or other work for you without a license, you must act quickly. Other claims have longer deadlines, but evidence becomes harder to obtain over time.
🚫 Common MCN Contract Breaches
Understanding what constitutes a breach helps you build your case. Here are the most common ways MCNs violate their obligations.
💸 Revenue Withholding
▼What it looks like: MCN fails to pay your share of ad revenue on time, makes unexplained deductions, or stops paying entirely.
Legal theory: Material breach of contract. The MCN's primary obligation is to collect and distribute revenue. Failure to do so allows you to terminate and sue for all amounts owed plus interest.
Evidence needed: YouTube Analytics showing earnings, MCN payment history, communications about missing payments.
📋 Failure to Provide Promised Services
▼What it looks like: MCN promised growth services, brand deals, collaboration opportunities, or other support but never delivered.
Legal theory: Material breach if services were a primary part of the deal. Also potentially fraud if they never intended to provide services. UCL violation as unfair business practice.
Evidence needed: Marketing materials, emails promising services, contract terms, documentation showing services were not provided.
🔒 Refusing to Release Channel
▼What it looks like: Contract has expired or you properly terminated, but MCN refuses to unlink your channel or claims you cannot leave.
Legal theory: Conversion (wrongfully exercising control over your property), breach of contract, UCL unfair practices. MCN may also be liable for ongoing revenue it takes after contract ends.
Evidence needed: Contract showing term expired, termination notice if sent, MCN's refusal to release, continued revenue collection.
📈 Inaccurate Accounting
▼What it looks like: MCN reports lower earnings than your YouTube Analytics show, makes unexplained deductions, or refuses to provide detailed accounting.
Legal theory: Breach of fiduciary duty (MCN holds your money in trust), breach of contract, conversion. You have a right to accurate accounting.
Evidence needed: YouTube Analytics data, MCN payment statements, discrepancies documented, requests for accounting that were ignored.
📝 Unilateral Contract Changes
▼What it looks like: MCN increases its revenue share, extends contract terms, or changes other material terms without proper notice or consent.
Legal theory: Breach of contract. Even if the contract allows modifications, California law requires good faith and may limit unilateral changes that are unreasonable.
Evidence needed: Original contract, notice of changes, evidence you did not consent, comparison of old vs. new terms.
💡 Document Everything
Keep records of all communications with your MCN, download your YouTube Analytics data regularly, save all payment statements, and document any promises made during signup. Screenshots of your MCN dashboard showing earnings versus payments are especially valuable.
📄 Sample Demand Letter Language
Use these templates to draft your MCN demand letter. Replace highlighted placeholders with your specific information.
Opening - Revenue Withholding
Contract Breach Statement
Additionally, your company failed to provide the following services promised in our agreement and during your sales process:
- [SERVICE 1, e.g., "Dedicated account manager"]
- [SERVICE 2, e.g., "Brand deal facilitation"]
- [SERVICE 3, e.g., "Content strategy support"]
California Legal Basis
Breach of Contract: Your material breach of the payment and service obligations entitles me to recover all amounts owed plus prejudgment interest at 10% per annum under California Civil Code Sections 3287 and 3289.
Unfair Business Practices: Your practice of withholding creator revenue and failing to deliver promised services constitutes an unfair and fraudulent business practice under California Business & Professions Code Section 17200. This statute provides for restitution of all amounts wrongfully obtained.
Breach of Fiduciary Duty: As the collector and holder of advertising revenue belonging to me, your company owes fiduciary duties including accurate accounting and prompt payment. Your failure to provide accurate statements and timely payment breaches these duties.
Channel Release Demand
1. Immediately release my YouTube channel from your MCN network
2. Cease collecting any revenue generated by my channel
3. Transfer any revenue collected but not yet paid to me
4. Remove any claims or restrictions on my content
5. Provide a complete accounting of all revenue generated by my channel
Until my channel is released, you continue to wrongfully exercise control over my property, exposing your company to additional liability for conversion and ongoing damages.
Demand and Deadline
1. Payment of [$PRINCIPAL OWED] in withheld revenue
2. Payment of [$INTEREST] in prejudgment interest (10% annual rate)
3. Complete release of my YouTube channel from your network
4. Full accounting of all revenue generated by my channel
Total monetary demand: [$TOTAL]
All demands must be satisfied no later than [DATE - typically 14 days]. Payment should be made payable to "[YOUR NAME]" and sent to [YOUR ADDRESS]. Channel release must be completed through YouTube's MCN release process.
Consequences
- Filing a lawsuit in California Superior Court for breach of contract, breach of fiduciary duty, and conversion
- Seeking restitution under California Business & Professions Code Section 17200
- Reporting your company's practices to the California Attorney General
- Pursuing a complaint with YouTube regarding your MCN practices
- Seeking injunctive relief to compel release of my channel
I will also consider publicizing your company's treatment of creators to warn others, consistent with my First Amendment rights.
I strongly encourage you to resolve this matter promptly and avoid the cost and publicity of litigation.
📝 Need Professional Help?
MCN disputes can be complex. I draft MCN demand letters and represent creators in disputes with networks. Contact me or book a consultation to discuss your situation.
❓ Frequently Asked Questions
YouTube's system requires your current MCN to release your channel before you can join a new network or go independent. If the MCN refuses, you are stuck unless you can demonstrate breach of contract or get a court order. This is why a formal demand letter with legal threats often works - MCNs know they cannot defend wrongful refusals.
Not necessarily. California Civil Code Section 1945.5 requires clear disclosure of auto-renewal terms. If the MCN buried this in fine print or failed to provide proper notice before renewal, the auto-renewal may be unenforceable. Even if enforceable, material breach by the MCN still allows you to terminate.
Often yes. If the MCN recruited California creators, your content is created in California, or the contract specifies California law, California courts likely have jurisdiction. Many MCN contracts actually specify California law and venue because so many creators are here - check your contract.
Arbitration clauses are generally enforceable, but California courts scrutinize them heavily for unconscionability. If the clause was hidden, requires expensive arbitration in a distant location, or waives important rights, it may be unenforceable. File in court anyway and challenge the clause - many creators have succeeded.
Yes. YouTube has a process for creators to report MCN issues. While YouTube generally does not intervene in contract disputes, repeated complaints about payment withholding or refusal to release channels can result in the MCN losing its partnership status. Mention in your demand that you will escalate to YouTube if necessary.
It depends on the approach. A demand letter typically costs $300-$750 from an attorney. Small Claims Court (up to $10,000) costs under $100 in filing fees and requires no lawyer. Full litigation can cost thousands, but for larger claims, some attorneys work on contingency. MCNs often settle quickly when facing real legal pressure.
Review your contract carefully for any provisions about chargebacks, advances, or penalties. If the MCN's claimed debt is based on unenforceable contract terms, California's unconscionability doctrine may apply. Never pay alleged debts without verification - demand a full accounting and dispute any improper charges in writing.
Take Back Your Channel
You built your audience - you deserve your revenue. I help California YouTubers fight MCNs that withhold payment, break promises, or refuse to release channels.
Book a ConsultationOr email me directly: owner@terms.law