Artist Don’t Make Money From Record Deals

Who is the incredible bonehead who said rappers make mad loot? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be crazy paid and livin’ large, this puts an incredible amount of pressure on the artists to appear wealthy.

This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist’s entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket)

Once an artist releases a record, the pressure is on to portray a successful image to fans, friends, families, and people around the way. People expect the artists to be well dressed, drive an expensive car, etc. Think about it. Don’t you expect artists “to look like artists?” Would you admire Jay-Z as much if he drove a busted old 1990 Grand Am instead of that beautiful, brand new, top of the line Bentley? Sadly, when an artist gets signed to a label deal, especially a rap artist, he or she receives somewhere between 8 and 13 points. What that means is 8% to 13% of the retail sales price after the record label recoups the money it puts out (the advance, the sample clearances, the producer advances, usually half the cost of any videos, any cash outlays for the artists, etc.).

The artist has to sell hella units to make any money back. Here’s an example of a relatively fair record deal for a new rap artist with some clout in the industry and a terrific negotiating attorney: ROYALTY RATE: 12%

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