How do they figure royalties for movie soundtracks?

Factual Questions
1

In 1959 James Carter, a sharecropper turned petty criminal was serving time on a Mississippi prison work crew for parole violation, was recorded leading the work crew in singing the work song Po Lazarus. He got out of prison, went straight, worked at a bunch of jobs over the years, finally retiring in modest comfort, and totally forgot ever having recorded the work song for 43 years. That’s when two men who had spent a lot of time tracking down his identity and whereabouts came to his house to present him with a $20,000 royalty check. Eventually he earned several times that and travelled the country promoting the CD. (The day he got his money he was told that his CD was outselling Mariah Carey and Michael Jackson and quipped `You tell Michael that I’ll slow down so that he can catch up with me.’ )

Anyway, I thought that was a cool story, but I’ve wondered: how is it figured how much each artist gets for one of their songs on a soundtrack? For example, with O Brother, the most popular song by far was probably the Man of Constant Sorrow, so would those singers get more money than Carter or the same? On the Moulin Rouge soundtrack the Elephant Love Song Medley alone samples from well over a dozen songs- how in the world is it decided how the royalties are divided among Paul McCartney, Dolly Parton, Elton John, etc., for the borrowing of their lines? And in the case of James Carter, it’s clear he didn’t give consent for the use of his recording since nobody even knew who or where he was, so there’s no way that the fees could be negotiated with him as they would with Paul McCartney who employs an army of song copyright experts to protect his own recordings and the vast catalog he’s purchased.

Anybody have a clue?

2

Of course, different cases have different answers, and there is no set royalties.

The royalties for the songwriter are negotiated through their rights representative. Thus with Elephant Love Medley, the producers had to contact the publishers of all the songs involved and negotiate a payment. It may be less than what the artist got for a performance of the entire song, or might be the same.

The songwriter gets paid no matter if its an existing recording or one specially recorded for the film.

If an existing song is used for a film, the movie negotiates a separate payment (assuming the performer isn’t the composer). If someone records the song specially for the movie, they get paid to make the recording.