Okay guys, here it is. Some actual news that should clear the air about what is legal and what is not and what you need to do to ensure you are getting a completely legal product to your customers.
First, let's talk about what is being called "Illegal." Creating a mix (essentially a mash-up of songs from various popular artists) and then selling said mix to a customer as our original product even though we have not obtained any of the licensing for any of the songs. It is important to remember the transaction and distribution is illegal, not the creation. That said, you could create your own cheer mix and listen to it all you want you are not breaking any laws.
So, then comes the question, how do we get our custom mixes in the hands of our clients without breaking any laws? I have been speaking with numerous producers over the last couple weeks about what we could do to solve this problem. Then, today, I received a phone call from a producer friend about a website called legitmix.com. What this website does is allow dj's, remixers, mash-up artists, etc...to sell their product online without the hassle of obtaining any copyright information. How does this work? It is actually quite simple. It makes sure before purchasing the track that you have purchased all the copyrighted source material and it searches for it on your computer. Once it has found each song that is present in the remix/mash-up/cheer track, legitmix.com then recreates the track through your computer on their integrated software and downloads it to your computer leaving you with an exact replica of the track you found on their website---All completely legal because you purchased the copyrighted source material and recreated the track yourself.
From legitmix.com "A Legitmix file does not contain any unlicensed copyrighted material so we do not need other people's permission to distribute it. Essentially, Legitmix acts like a digital instruction set, which a consumer can use along with their copy of the identified source music to recreate your mix on their computer. This recreation is legal since the consumer has the right to mix music they own for personal use."
So they way you could handle this for cheer is pretty simple. Once you have all the songs you are using in your mix, contact your client and let them know what songs you have chosen so they can download them from iTunes on their computer. Once you have completed the mix and they make a donation to your company, you can upload the mix to legitmix.com, set the price to zero dollars and they are free to download.
The only area that is a little grey for me still is dealing with payment outside of legitmix.com (because they will take 30% of whatever you set your price at). However, I believe you could get around it if everything is invoiced as a donation, and they pay the 50 cents to download the track from legit mix. That way they are buying the track from legitmix.com and donating money to your company for your help or voice overs or whatever you want to call it. Worse case scenario you just charge your going rate for the track and legit mix takes 30%. (i.e. you charge 300.00 for a mix, you will really only get 210.00