As an A&R Consultant with Lisa Davis Music Management, I
speak to an array of artists who are seeking the covenant “deal”. The terms in
recording contracts are tailored and negotiated for each individual situation.
They however, all have a basic structure in which they are built from.
Distribution Deal:
Distribution deals also referred to as P & D (Pressing
and Distribution), with a major label are usually given to artists or indie
labels who have created a significant buzz for themselves. In this deal, the
label takes on the responsibility of making the artists’ music accessible to
the public by pressing and distributing it to retail stores and throughout the
internet. The artist or indie label that the artist is signed to, is
responsible for all other costs. That includes any promotional costs, videos,
radio, posters, wardrobe, etc. The artist or indie label retains ownership of
the masters. The distributing label almost never pays an advance and takes 20%
to 25% of the profits made from music sales.
These deals are useless to artists who don’t have the
adequate financial backing or effective promotional plan to drive fans to their
product.
Former Roca-A-Fella records artist and State Property front
man, Beanie Sigel signed a distribution deal with EMI. Though he had offers
from major labels, he felt that he was too far advanced in his career to sign a
360 Deal.
Production Deal:
Instead of being signed to a label, some artists sign to
producers that record projects on them. A major label then gives those
producers an agreement to develop artists under their umbrella and turn over
complete projects for release. A lot of what the artists receive in a deal like
this depends heavily on the agreement between them and the producers. After the
major get it’s share, it is not uncommon for the production label 50/50 with
the artist after recouped costs. Producers usually own the masters or share
them with the label.
Cash Money Records co-CEO’s Bryan “Birdman” Williams and
Ronald “Slim” Williams renewed their multi-recording production deal with Miami
production duo Cool & Dre, who will continue to work with YMCMB. The duo
produced “Popular” from Lil Wayne’s I Am
Not a Human Being album and “Its
Good”, “So Special”, and “I Like The View” from Wayne’s Tha Carter IV.
360 Deal:
A 360 deal, often referred to as the “multiple rights” deal,
seem to be the future for artists agreements between them and labels. With this
deal, the label gives the artist a big advance and joins with them in a kind of
“partnership”, sharing in any and all profits made by that artist.
With the decline in physical CD sales, labels entered into
these deals with artists to create other profitable opportunities. These
profits usually include a share of touring, songwriting, and merchandising. The
label pays for everything and basically invests in the artist as a brand that
can be used as a source of advertising revenue.
According to the New York Times, With one of the biggest music contracts ever, Rapper/Mogul
Jay-Z signed a $150 million deal with Live Nation. The deal includes financing
for Jay-Z’s own entertainment venture, as well as the rights to his recordings
and tours for the next decade. The deal would prove money for a host of
business ventures, which include a label, music publishing, talent consulting
and management services.
The New York Times reported that Live Nation is expected to contribute $5 million a year in
overhead for fiver years, plus $25 million to finance Jay-Z’s acquisitions or
investments on behalf of Roc Nation, which will split profits with Live Nation.
He will also get an upfront payment of $25 million, an advance that includes
fee for his current tour and advances of $10 million per album for a minimum of
three albums during the deal’s 10-year term. Another $20 million is included in
the package exchange for publishing, licensing and other rights.
