Got Offering from Label, Is It Worthy?

[getBAK]

I'll echo the advice given before to retain a lawyer with a specialty in music/entertainment law.
You absolutely can, and must afford one. You might start by contacting VLANY
Volunteer Lawyers for the Arts - VLANY

Here are a few tidbits I will offer based on my career and some study of entertainment law
1) "Profit" (or the "net) does not exist. All contracts with a label should be written based on you being paid on the "gross". You cannot control the spending or business practices of the label, and thus you should not be subject to their consequences.

2) If it isn't written down, it does not exist. Never take anyone's word for anything or work under the assumption that the label (or promotor, or any business you work with) is looking out for your best interest. Nothing gets "worked out later".
If the label promises something, make them put it in writing in the contract. If they won't put it in writing, it tells you they don't intend to honor their promises.

3) Be very careful with the limitations of your agreement's scope. There are lots of contracts out there right now known as "360" deals. Basically entitling the label to a percentage of everything you or your group earn for the rest of your lives. This means that if your band leaves the label and starts working elsewhere, the label still gets a piece. It can also apply to individuals (less commonly), IE you quit music and got to work for McDonald's, the label gets a % of your paycheck.
If someone offers you a 360 agreement, I suggest you walk out and find another label to do business with.

4) Always "shop" an agreement to other labels. There are a lot of labels out there, there is probably more than one that would be interested in speaking with you. If I was hiring a landscaping company, I'd get at least 2 quotes. This is no different.

5) Never assume the label is looking out for your best interests. I said this earlier and I'm saying it again. Labels are in business for themselves, they have a stable of "properties" you are one of them. You are a conduit for making money, nothing more.

6) This may be the way things are done now, but I would be very reluctant to give a record label any piece of live performance revenue.

<edit> OMG I forget the #1 rule of the music business
NEVER TRUST ANYONE IN THE MUSIC BUSINESS

 

[MDBass]

they offer to book us gigs, promoting us, producing our songs and they want 70% profit of digital selling and 30% profit from gig that they land for us. Basically they want to get money that they spend on us.

Again, you need to be a lot more specific before anyone can tell you whether it’s a good deal or not.

They want 70% of the masters, but “promoting us” and “producing our songs” is incredibly vague.

What’s the promotion budget?

Do you have any say in how it’s spent?

What’s the recording budget?

Do you have a say in who the producer is?

Are the promotion or recording costs recoupable?

 

[buldog5151bass]

If you don't get an attorney, you have no idea what kind of deal you really have. There are a lot of people who found out the hard way.

 

[swarfrat]

Swarfrat's law of Scarcity:

Demand for good stuff far exceeds supply of good stuff. If it comes looking for you - assume you are prey.

 

[Beersurgeon]

Just remember, hookers and blow are expensive!!

Congrats and best wishes!!

 

[azureblue]

Shark alert!

They offered 30% from the profit of digital selling (YouTube, Spotify, iTunes, Apple Music, etc) and 50-70% from live performance.

First off, you can DIY to get your tunes on streaming services. I am handling CD digital sales of 8 CDs through Bandcamp and streaming records through Sound Exchange, plus I get streaming statements from Distrokid. . Go research. The live performance cut is ludicrous. DO NOT DO THAT. Unless they agree to pay for the transportation, housing, food,, etc., and promo costs ahead of the gig and they will guarantee you a certain number of gigs per year,which they will be directly and financially responsible for getting. And guarantee the band a minimum fee per gig.

Counter with - If you will guarantee in contract a minimum of XX gigs per a six month span, and cover the costs, plus pay the band right after every gig in cash, supply a road manager and crew and pay them, then we will consider your offer. They will not get back to you... they will assume you know what you are doing and go find a sucker someplace else

 

[LBS-bass]

If you are asking the question here and you can't afford a lawyer, there are two things of note.

1) You don't understand the contract or the risks, or you wouldn't need to ask.
2) You can't afford to take a chance on this contract.

Nobody in their right mind signs a contract of this sort without representation. It is the classic rookie move. It has resulted in situations so dire that it has driven people to suicide.

Please do not be one of those people, particularly now that you have several pages of responses warning you not to do this. Forewarned is forearmed. Ignoring experienced advice from others here is foolish, and the music industry expects that we are all fools.

Suck it up, raise the money, and hire the attorney to advise and negotiate. I promise you it will be money well spent and I also promise you that if you do not, you will wish you had.

 

[JimmyM]

I am so glad to see so many people in this thread tell you to get a lawyer who specializes in music and entertainment. To read a contract and give you a determination on it shouldn't be prohibitively expensive. On the other hand, a record label screwjob can last a very long time and have repercussions long after you think they should have gone away. And it's definitely something you don't want amateurs spitballing about on Talkbass.

 

[stuntbass77]

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.

^this^ if there is no lawyer involved you could end up owing the record label and basically working free !!!!! This may be worst case but do you really want to gamble on that. If you guys are good enough for one offer I’m sure you’ll get another. I like how groups like “Vulf” were able to get big on their own and cut out a lane deal. Obviously your band will not have that happen, or not likely. I would take some time saving up for a lawyer. Play some more shows and keep saving. Congrats on the offer, clearly you guys are talented ! Pease know that I too am only trying to look out for you and not just poop on your success!!

 

[57pbass]

Get a lawyer. Don’t sign anything until this is done.

I remember a few comments over the years that stuck with me regarding this topic.

They’re not your friends !

Don’t give them any concession proceeds! ( t shirts, hats etc )

Congratulations and good luck to you ... it’s very exciting to get acknowledged and have someone take a serious interest.

 

[40Hz]

thank you for your input. They're a small and new label. But they pay for recording and have a booking agents. They used to work for major label but now creating their own. Tbh, we're not paying anything for recording and producing. And I will try to get a help from my wife's friend that is a lawyer, but not entertainment lawyer. What do you think about this? We're no name band with just 130-ish followers that mostly friends of band member on Instagram and already rejected by many before this. They're the one that give us chance, but with their offers, I'm a little bit uneasy. Basically, they'll got nothing if we don't have any progress. I even ask if I have to pay their expenses if we're stuck on our stage now and they say no. So, what do you think? Is it a good pr bad deal?

I don’t really get the “have booking agents” part. That sounds more like they’re actually show promoters or impresarios rather than an actual label and are just calling themselves a label to make signing with them sound more attractive.

Here’s a question. If you've been rejected already by actual labels many times before, what has changed since then - either with your band or the industry current music trends - that somebody calls you and suddenly wants to sign your band? And when they do it isn’t to go into a studio and record an album and then get you out on tour. Instead they just want to finance an appearance of your band at an event and in return get the lions share of the music royalties from your music going forward; and half of what you get from the event they’re booking you for - which I’ve never once heard a label getting even a penny from? (That’s why bands go on tour btw. Live shows are the band’s real paycheck.)

And the percentage of your music royalties will get paid out of “profits” rather than sales? Who calculates the profit? They can calculate it any way they want. The industry is full of stories of gold records that the artist never made a dime from because “expenses” (per the agent or label who calculated the income statement) equalled or exceeded the profits from the album. And unless your contract spells out how that accounting is going to be done, they can do it any way they want. And good luck getting a fair and accurate accounting of anything from them either. One more reason why record execs and major agents dress better, eat better, drive more expensive cars, and live in much nicer houses than many recording artists do.

However. you seem to very much want to do this offer you’ve received and apparently are still trying to find a way around the advice (including advice from an IP attorney) you’ve already received.

About all I can suggest is that nothing you’ve already been told by anyone is going to change. Because the underlying reality of signing a contract in as minefield strewn an area as music and entertainment isn’t going to change either.

So you might as well do what you want. Because it looks like you’re going to anyway. Good luck.

 

[tyohars]

I don’t really get the “have booking agents” part. That sounds more like they’re actually show promoters or impresarios rather than an actual label and are just calling themselves a label to make signing with them sound more attractive.

Here’s a question. If you've been rejected already by actual labels many times before, what has changed since then - either with your band or the industry current music trends - that somebody calls you and suddenly wants to sign your band? And when they do it isn’t to go into a studio and record an album and then get you out on tour. Instead they just want to finance an appearance of your band at an event and in return get the lions share of the music royalties from your music going forward; and half of what you get from the event they’re booking you for - which I’ve never once heard a label getting even a penny from? (That’s why bands go on tour btw. Live shows are the band’s real paycheck.)

And the percentage of your music royalties will get paid out of “profits” rather than sales? Who calculates the profit? They can calculate it any way they want. The industry is full of stories of gold records that the artist never made a dime from because “expenses” (per the agent or label who calculated the income statement) equalled or exceeded the profits from the album. And unless your contract spells out how that accounting is going to be done, they can do it any way they want. And good luck getting a fair and accurate accounting of anything from them either. One more reason why record execs and major agents dress better, eat better, drive more expensive cars, and live in much nicer houses than many recording artists do.

However. you seem to very much want to do this offer you’ve received and apparently are still trying to find a way around the advice (including advice from an IP attorney) you’ve already received.

About all I can suggest is that nothing you’ve already been told by anyone is going to change. Because the underlying reality of signing a contract in as minefield strewn an area as music and entertainment isn’t going to change either.

So you might as well do what you want. Because it looks like you’re going to anyway. Good luck.

yep, we've got many reject before. What changed? I think our vocalist got more confidence now. They say they want to change music trends. No, they want to produce our songs too. Yeah actually it's 70:30 with 70 is I want to do it. So, I want to do what many people here suggest, find a lawyer.

 

[jmattbassplaya]

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.

+1 million.

This isn’t a “we can’t afford a lawyer” moment. You can’t afford not to have a lawyer when this will deeply impact your personal and band’s bottom line for, potentially, many years to come. A couple thousand spent now might save you tens of thousands down the road.

 

[jmattbassplaya]

yep, we've got many reject before. What changed? I think our vocalist got more confidence now. They say they want to change music trends. No, they want to produce our songs too. Yeah actually it's 70:30 with 70 is I want to do it. So, I want to do what many people here suggest, find a lawyer.

Change the “I want” to “I will even if the rest of the band thinks it’s a bad or unnecessary idea.” I’ve played with many musicians. Many of them are good people. Far fewer are actually good businesspeople or business partners. IME. YMMV.

 

[LowFactor]

May also want to incorporate the band or file as an LLC.... and file the paperwork for your publishing company... But a lawyer will help with all of that.

 

[Downunderwonder]

thank you for your input. They're a small and new label. But they pay for recording and have a booking agents. They used to work for major label but now creating their own. Tbh, we're not paying anything for recording and producing. And I will try to get a help from my wife's friend that is a lawyer, but not entertainment lawyer. What do you think about this? We're no name band with just 130-ish followers that mostly friends of band member on Instagram and already rejected by many before this. They're the one that give us chance, but with their offers, I'm a little bit uneasy. Basically, they'll got nothing if we don't have any progress. I even ask if I have to pay their expenses if we're stuck on our stage now and they say no. So, what do you think? Is it a good pr bad deal?

What they say doesn't count. Only what is written in the contract.

If you read so far, regular lawyer is no good for this!

 

[Wood and Wire]

they offer to book us gigs, promoting us, producing our songs and they want 70% profit of digital selling and 30% profit from gig that they land for us. Basically they want to get money that they spend on us.

You're operating under the assumption that these singles / albums / gigs are turning a profit.

For one thing, the record companies accountants will be working tirelessly to show that there is no net profit.

Secondly, when your record is released, you won't see a dime until all of the expenses have been recouped.

What if the record doesn't break even?

Perhaps the record company is committed to putting out a second single / album...

You won't see a dime until the outstanding costs of the first record have been recouped, in addition to the full cost of the second record.

This is called cross collateralisation.


As I said in your original thread, engage the services of a professional entertainment lawyer, specialising in music contract law.

Figure out exactly what you want from the record company.

Insist upon an exit clause, in the event that the record company don't satisfactorily fulfill their contractual obligations.


Break a leg.

 

[farace]

And I will try to get a help from my wife's friend that is a lawyer, but not entertainment lawyer. What do you think about this?

No no no. Lawyers specialize, just like doctors do. You wouldn’t go to a podiatrist for brain surgery. Don’t get entertainment law advice from a lawyer that does real estate closures or personal injury work. We have a lawyer in our band who is a public defender. He has told us, in response to a question about some other aspect of law, “Don’t ask me! I can help you if you murder somebody, but I don’t practice [whatever it was we asked him about].” A lawyer that doesn’t specialize in entertainment law is not going to know the arcane details (and label tricks) inherent in a band/label contract, and certainly will cost more in the long run because you’ll be paying them to try to get up to speed in that area.

 

[LBS-bass]

I can't wait to hear about this train wreck a year from now. Sounds like no matter what we say, you're determined to make all the classic mistakes that have made legions of musicians bitter and angry through the years. I hope it all works out, and that five pages of responses warning you to be careful and smart about this are wrong about everything.

My dad used to say to me all the time, "those that don't listen have to feel" and you appear bent on feeling the full effects of rushing forward unprepared and ill-advised. There's certainly nothing I can do to stop you, so I'll just wish you the best of luck and I have no further comment.

 

[Xyth]

Been skim reading this thread. My band recently signed to label and I've spent a lot of time (months) researching and getting legal and industry advice before doing so. I strongly advise you to NOT sign this deal, for 2 simple reasons:

1. Those percentages are awful, never give away more than 50% of anything.
2. Your inability to answer a lot of the questions in this thread indicates that you don't yet understand how this deal works, nor music deals in general. Hire someone who does.