Record deals
A record deal trades part of your future income for money and help now. Label deals, distribution deals and 360s, where the label also takes a share of your touring and merch, each make that trade differently. Many small labels pay you half the profits instead of a royalty, after covering what they spent. Either way, the question is what comes off before you see a dollar.
All Advances and all Recording Costs shall be recoupable from any royalties payable to Artist under this Agreement or any other agreement between Artist and Company or its affiliates. No royalties shall be payable to Artist until all such sums have been recouped in full. Advances are nonreturnable except as provided in Paragraph 14 (Failure to Deliver).
Our note
An advance is money paid up front against your royalties, and recoupment means the label pays itself back from those royalties before it pays you. At an 18% royalty on what the label takes in, a $20,000 advance is covered after about $111,000 comes in. Add a $15,000 studio bill and it’s about $194,000, while the label keeps its own 82% from the first dollar. Phrase 2 is cross-collateralization: money still owed on one deal comes out of what you earn on another. “Nonreturnable” means that if your royalties never cover the advance, you don’t pay back the rest yourself, unless you fail to deliver the records.
What we’d ask for instead
We’d ask that advances recoup only from royalties under this deal, and that recording costs be capped at a budget agreed before anyone books the studio.
Dana Kovach reads record deals. A contract read is a flat $650.

