Got Offering from Label, Is It Worthy?

Discussion in 'Band Management [BG]' started by tyohars, Jul 31, 2020.

  1. tyohars


    Nov 11, 2016
    Few weeks ago, I recorded demos for a label (you can find the whole story here). The label decide to sign us, but I don't know how much I should get from the deal. They offered 30% from the profit of digital selling (YouTube, Spotify, iTunes, Apple Music, etc) and 50-70% from live performance. I'm new at this industry, playing bass since 2014 as a hobby and getting serious since last year, never in this situation before. So, what do you guys think about the offer?
  2. RSBBass


    Jun 11, 2011
    First congratulations!
    Second, get a lawyer experienced in the music business to review the contract. The world is littered with people who got ripped off by record companies. BTW I have never heard of a record company getting a portion of live shows unless they were fronting money for them.
  3. AceOfBassFace


    Jun 23, 2019
    Wow congrats - sounds exciting!

    First off - do you have an agreement amongst your group on how any money you might make gets split up? Songwriting royalties are a big one to sort out right away before you get more serious since that's a good chunk of the money a band makes. Will you get paid with a cut of the profits as a contributing band member or on a weekly salary as a sideman? Lots of stuff to consider. People change when money is on the line so watch out for that. Be prepared to walk away if it's not to your liking.

    You should definitely look for a good entertainment lawyer to guide you through the process. Make sure the lawyer specializes in entertainment law and has experience with recording contracts. Maybe a manager too - if you have a deal on the table you can probably shop around. It's all about the details; what you have to do, and what the label will do for you for their cut, and how much is it's all worth. Someone with experience will know the ropes so you don't get take advantage of.

    There are loads of resources, interviews, videos and articles on the internet about this topic, so try to view as much as you can. Good luck!
    Bruno1950 and RSBBass like this.
  4. ArtechnikA

    ArtechnikA I endorsed a check once... Gold Supporting Member

    Feb 24, 2013
    Congratulations -- but --

    Am I understanding this right -- the label wants 70% of everything you do?
    And you're being told to hire a manager at 10% out of your 30% ?
    I get the rush that comes from having 'a record deal' but that sounds like a really sucky deal.
    Especially since you'll still have to pay taxes on your share of the band's 20%.
    You could wind up in the hole in a hurry.
    What exactly are they doing for their 70% of your work ?

    The first thing I'd be looking for in that contract is how do you get out of that contract...
  5. tyohars


    Nov 11, 2016
    Yep, they'll fronting money to get us to play live at big event. Thing is, we can't afford lawyer yet :(
    Thank you! But we can't afford to hire lawyer and manager yet. We're really new in this industry and don't know anyone. The label produce our songs, promote us, make video clip, etc. They'll give us stages and book places for us.
    no, they'll give us 30% from digital selling and 70% from live performances
  6. Profits from shows can be heavily diluted by 'expenses' over which you have no control. Those 'expenses' are paid to subsidiaries of the record company, who profit.
  7. is pay to play. See who owns the event. Bet they also own a record company.
  8. brianrost

    brianrost Gold Supporting Member

    Apr 26, 2000
    Boston, Taxachusetts
    This sort of "360 deal" started to become common about two decades ago. From the way you describe it, this "label" is really a management company. 360 deals began as a way for corporations to boost profits by getting a piece of more of the revenue outside of the recordings themselves, because of the drop in the number of sales of recordings.

    If you can't afford a lawyer, you also can't afford to sign that contract! Say thanks but no thanks and DO NOT SIGN ANYTHING.
    Last edited: Aug 1, 2020
  9. JW56789

    JW56789 Guest

    Feb 18, 2017
    I don't mean to sound rude, but who cares what we think ?

    You need to have this reviewed by competent legal representation: The sad, sorry history of the Muzik Bidness is littered from A to Z with people who said 'we're not big enough to afford a lawyer yet'. IF binding contracts are being slid in front of you, YOU ARE. Otherwise, a few years from now when you're working double-shifts to pay out of that contract and playing music is a fond memory, that lawyer will seem really cheap.

    The sorry history of the entertainment business is like going to Vegas the first time: THEY know the game(s) backwards and forwards and YOU just got off the bus from the sticks. The House almost always wins, but it always makes money. Don't pay for your education the hard way.
  10. BrotherMister


    Nov 4, 2013
    PVG Membership
    It can’t be stressed enough to get proper legal advice on that. Contracts have all sorts of weird wording in clauses that often seem trivial but mean a whole lot. For example one contract may say recoup expenses from the artist and the other might say return expenses from the artis. Take a pick at what one you’ll have to pay back regardless of whether you are gigging or sitting in an office 20 years from now.

    Publishing rights are super important now as well so finding out who gets them and stuff like that because that’s your long term pay off.

    Google lawyers and email. Ask people if they know anyone. Someone somewhere is going to be able to help and work something out with you but for the love of god don’t sign it until someone with the correct qualifications and experience had gone over it with a fine tooth comb.
  11. filmtex


    May 29, 2011
    Having grown up in El Lay and lived and worked in Hollywood for many years, I can assure you, that town is littered with thousands and thousands of casualties of people who were promised "a deal". Not only the music business, but the movie business, the modeling business and the writing business. We used to sit on the second story landing across the parking lot from the Greyhound bus station there on Cahuenga and watch the vultures pounce on the new arrivals wondering how many would survive the first day.
    Get. An. Attorney. There are way too many moving parts in this kind of a deal, and more scams in this business than drummers looking for work! (Just kidding, drummers.)This thread is full of good advice so far.
  12. I'll repeat it - do NOT sign this contract without an entertainment lawyer looking over it first.
  13. ardgedee


    May 13, 2018
    Lawyers are fully aware that people they're negotiating contracts for don't get paid until after contracts are signed. Talk to several, and ask them about payment plans.
  14. TNCreature

    TNCreature Jinkies! Supporting Member

    Jan 25, 2010
    Philadelphia Burbs
    So if spotify pays 1 cent per stream, the label gets 70% of that and you and the band split the remaining 30%.
    It's so hard to make money anymore, will there be a physical product? Vinyl, CD?
    Bands nowadays typically make money from their live shows and merch.
    Also, who owns the publishing? That is the most valuable item in this whole equation.
    Get. A. Lawyer.
    Good luck
    Mpcorb, JMacBass65, The Owl and 4 others like this.
  15. lordradish

    lordradish Supporting Member

    Jul 20, 2006
    You need to find a lawyer, one way or the other, as the potential to be screwed here, is immense.
  16. wagdog


    Mar 20, 2000
    Der Waffle Haus
    Record labels are not your friend, they will do you no favors. Lawyer up.
    getbent, MonetBass, Bruno1950 and 8 others like this.
  17. RichSnyder

    RichSnyder Columbia, MD Supporting Member

    Jun 19, 2003
    You can’t afford to not have a lawyer.
  18. RichSnyder

    RichSnyder Columbia, MD Supporting Member

    Jun 19, 2003
    Also, I don’t think OP is in the US, so you really need a lawyer to help navigate your country’s legal system. Most of the advice you’ll find here is applicable to the US.
    JMacBass65 and DrThumpenstein like this.
  19. ArtechnikA

    ArtechnikA I endorsed a check once... Gold Supporting Member

    Feb 24, 2013
    Can't tell what part of the world you are in, or how much life experience, generally...
    Have you ever read an insurance policy? I mean really read the real policy, not just the "summary" they show you when they're trying to sell you the policy. In short order, you may come to realize that what they promise you takes about a paragraph, and the other 19 pages are reasons why they won't pay.
    So at least REALLY READ the contract with the deep understanding that every paragraph is written to ensure that money leaves your account and enters theirs.
    I have a stack of music law and industry books on my desk about 3' wide and I'm not a lawyer.
    AT LEAST read some books to get an idea of how big a pit you're contemplating leaping into.
    Music Law by Stim (Nolo)
    All You Need To Know About the Music Business by Passman (Simon & Schuster)
    Business Basics for Musicians by Borg (Music Pro)
    How to Make it in the New Music Business by Herstand (Liveright)
    The Music Business Advice Book by Owinski (BOMG)
    and anything by Martin Atkins, but start with Welcome To The Music Business *you're FU*CKED (yes, this is the actual title...)
    and then get BAND:SMART but it's a big read and only some of it deals with legal matters. It's all worth knowing tho...

    This situation has so many red flags. You: new to the industry, don't know anyone, maybe a little naive (trying not to judge...), really excited to have 'made it.'
    Them: sees you as ripe for the picking...

    The industry is full of horror stories of bands driven into bankruptcy by bad record deals.
    John Fogarty was prevented from performing HIS OWN SONGS for about 50(!) years...
    Last edited: Aug 1, 2020

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