The Sisyphean Quest for a Good Record Deal
This story appears in Rolling Stone‘s 2021 Future of Music issue, a special project delving into the next era of the multibillion-dollar hitmaking business. Read the other stories here.
When Doris Muñoz met Cuco, one of the first things she told him was that his art was pure and should never be exploited. “I said, ‘I want to advocate for you because I don’t want you to get Ritchie Valens’d,’ ” she recalls, referring to the Chicano rock & roller whose label owner, Bob Keane, kept Valens’ recording rights in perpetuity. Valens’ mother had to wait until 1987, 28 years after her son’s death in a plane crash, to take back his publishing.
Muñoz began managing Cuco in 2017, when labels were pulling out all the stops to try and sign the 18-year-old artist, whose bedroom productions were burning up SoundCloud and Bandcamp. The pair were flown out to New York and dazzled in meetings with label chairmen. “And we’re just these little Chicano kids, the kids of undocumented immigrants, that never thought these opportunities would present themselves in our lifetime,” Muñoz says.
So many record-industry horror stories start this way. But Muñoz and Cuco had done their research: They’d heard that labels regularly presented young artists of color with lopsided contracts that tilted ownership in their favor, put low royalty rates in fine print, or hid other exploitative clauses behind legalese and sky-high advances. These practices — default in the industry — could snuff out a career before it got a chance to take off, or constrain an artist if they got bigger later on.
Muñoz and Cuco decided to turn down all his contract offers in 2017, and they inked a straightforward deal with the independent distributor AWAL instead. Cuco spent the next year building momentum with his EP, Chiquito, and playing festival sets. In 2019, he finally signed a label contract, with Interscope, but made sure the deal let him own all of his original recordings.
Cuco’s story is a rarity, because the majority of fresh artists don’t know to question the paperwork and cash piles that get dangled in front of them. Another question, then: Is there such thing as a fair record deal at all?
“I promise you, as it stands today, any record executive — if they had a child who was about to enter into a major recording deal, they would probably advise the child against it,” says Chris Anokunte, an independent manager of artists, who used to handle A&R at major labels and has been vocal in his disdain for exploitative label deals. “So if you wouldn’t even let your own child sign those deals, why do you continue to put those deals in front of other people’s children?”
The crux of a record deal is ownership. “When you own and control your own intellectual property, you have a lot of flexibility to run your business,” says lawyer and artists’ rights advocate Dina LaPolt. “I have clients that will call me up with all these great ideas, whether it’s a non-fungible token or a TV show that uses their music, and I have to say, ‘We have to get permission from the record company.’”
Laying claim to artists’ work is the multibillion-dollar bedrock of the record business, and wresting control of something so precious seems to have given labels the chutzpah to try to siphon anything else they can, such as merchandise, touring, film deals, or other intellectual property. Terms tend to be unfriendly even around the music itself: It’s not uncommon that artists are the sole creators of work but get compensated with only a fraction of the revenue stream. (Say you get 15 percent of what your album earns — but from that 15 percent, you’re still covering production and distribution fees, and paying back your advance to the very people grabbing the other 85 percent.) Many multi-album deals also give the label ownership of, and sometimes creative discretion over, works the artist has not yet made, as well as the power to randomly drop the artist or let their songs sit on a shelf forever while shackling the artist to the company. Because labels are the ones taking the risk on unproven talent, these skewed terms are known as just “the way it’s done,” a refrain automatically passed down from label execs and attorneys to green artists.
Maybe one day it won’t be.
In 2019, Taylor Swift went to war with label boss Scott Borchetta for selling her catalog to her enemy, Scooter Braun, without her say-so. Then, last summer, Kanye West tweeted out his Universal Music contract, slamming the label for locking him into strict terms; artists like Hit-Boy, YG, Russ, and Logic shouted their support. This superstar revolt over bad contracts happened to take place as social protests roiled the world, calling for the end of police brutality and systemic racism. Instagram protest #BlackoutTuesday was also started by two black workers at music companies.
In response to the latter issue, for the very first time, the record industry took a stab at restorative justice. Some companies vowed to review historic contracts of black artists, potentially wipe unrecouped debt, or return to the negotiating table (one year later, on June 11th, Sony Music finally followed through, announcing it would write off the unrecouped balances of legacy artists). But others in the industry just took shelter in charitable donations, broad platitudes about equality, and black squares on Twitter. Yet one thing was clear: Artists were fed up with the industry — and they demanded change.
In conversations with Rolling Stone, managers, lawyers, and other industry leaders say they have seen a shifting landscape of power, though many obstacles remain.
“Now the cat’s out of the bag,” Anokunte says. “You can’t say you want to do better and then not do better. The wrongs they wrote over the last hundred years? Too late. But those wrongs will keep these companies in the multibillion-dollar price range, as far as their stock. When you own masters on Madonna, the Beatles, fucking Tracy Chapman, Alanis Morissette — these are evergreens that will earn for the next 300 years, hopefully. So the next five to 10 years, why not do better deals?”
Anokunte notes the three major labels (Universal, Sony, Warner) are all public companies beholden to shareholders, who would be livid if labels relinquished their most valuable assets. So in cases like that of Anita Baker, an artist who recently told fans to stop streaming her music as she tries to get her masters back, labels will likely just point a finger toward Section 203 of the Copyright Act, which gives artists the chance to ask for their copyrights back after 35 years. (Success in these cases, it should be noted, is never a given.)
But as labels usher in the next generation of talent, a new type of deal, with different kinds of terms, is starting to appear.
The industry’s long-used “in perpetuity” label ownership deals are giving way to licensing deals, which revert copyrights back to artists after a certain period. Anokunte’s client Curtis Waters used the leverage of his explosive TikTok hit “Stunnin’” to negotiate a shorter licensing period.
Cody Fitzgerald, frontman of indie band Stolen Jars and a member of the Label Relations Committee of the newly formed Union of Musicians and Allied Workers (UMAW), says this should be standard: “The idea of someone owning your music in perpetuity is absurd. Most of the money you’ll make on the record is going to be within the first 10 years, unless you’re someone like Adele — and the average artist is not.”
Other new provisions include net-profit splits, as opposed to royalty payments, where artist and label can share profit 50-50 after all expenses are recouped. Jacky Tran, another UMAW member, says labels are more open to single-album deals, which don’t “obligate artists to chase losses,” and instead “make the label accept that they may have to renegotiate and offer more competitive deals.”
Don’t know what else to do pic.twitter.com/1uBrXwviTS
— Taylor Swift (@taylorswift13) November 14, 2019
The newly agreeable nature of the curmudgeonly labels has as much to do with public image as it does with the fact that the music industry’s revenues are finally on the upswing, after 20 brutal years. (LaPolt notes the last time contracts were especially abject was the mid-2000s, post-Napster but pre-streaming, when labels were compensating for losses with 360 deals that took a cut of everything.)
But many labels are also furiously wooing creators of viral hits right now. To guard against the risks in those gambles, one industry professional, who requested anonymity, says labels are adding all sorts of “paternalistic provisions” to contracts that allow them to pick producers and make creative decisions, or ensure legal “outs” if a relationship sours. Those protections are not afforded to artists.
“If you have to do a whole bunch of things to protect yourself, then you probably shouldn’t be doing a deal with that entity in the first place,” the source says.
The source acknowledges that forcing labels to shoulder more responsibility would be a big ask, noting that if labels had to stick with a bunch of overly expensive artists, they might go bankrupt. A compromise, however, could be a fundamental change to the notion of the advance.
They suggest labels get rid of advances, which are essentially huge loans, and offer equity investments instead: “What I would like is for artists to have a sense of equity in the art they’ve created. It’s not so much about ownership of the master, it’s about having the ability to participate in how revenue is generated and how the master is exploited. There’s no reason an artist can’t be equitized at the same time.”
“I swear, I’m not exaggerating, it’s the most fucked-up contract I’ve ever seen in my life. The second page is an NDA”
Adam Bainbridge, who makes music as Kindness and also sits on UMAW’s Label Relations Committee, was recently asked to look over an acquaintance’s contract. The lengthy document was packed with contradictory language: It promised the artist retention of their rights, but stripped away those promises elsewhere.
“I swear, I’m not exaggerating, it’s the most fucked-up contract I’ve ever seen in my life,” Bainbridge says. “The second page is an NDA!”
Bainbridge showed it to a lawyer — who said that contracts like these were totally enforceable, typically in favor of the label.
“Even where someone’s written a deliberately manipulative or ambiguous contract, there’s pretty much nothing you can do about it,” Bainbridge says. “The court of law very often finds on the side of the label owner who has this piece of paper that says, ‘You signed this to me and you should’ve gotten advice before you signed this document.’”
This inherent power imbalance, between the lawyered-up corporate labels and the scrappy, wide-eyed artist, can’t be solved by just putting an attorney on the artist’s side — because attorneys hired on commission often just want a deal done as fast as possible. They might have a relationship with the label, as well. “It’s not a [legal] conflict of interest, but is a philosophical conflict of interest,” the industry professional says.
“A lot of these artists don’t read these fucking contracts — they’re 90 pages,” adds Anokunte. “The lawyer should educate the artist on why the deal is a bad deal, instead of saying, ‘This is customary.’ [But] the lawyers have a lot to do with the way these deals are, because they wrote the deals on the inside and they negotiated them on the outside.”
Asking seasoned attorneys to alter their business is probably out of the realm of possibility right now. But as the music industry soars to financial heights unseen since the glory days of CDs, individual players are increasingly hunting for ways to ensure artists are properly compensated. The top priority for UMAW’s Label Relations team is providing resources like glossaries, sample contracts, and a confidential service to review royalty terms. It’s developing “label love-in” events, where artists on the same labels can get together and share valuable information about their contracts without the usual awkward stigma. (Bringing up contracts among artists is typically a sensitive matter, “a bit like talking about sex with your friends,” Bainbridge jokes. “You kind of want to do it, but you don’t know how much detail you want to share.”)
“The music industry pits artists against each other. That’s the way that it’s always been,” says Zachary Cole Smith, frontman of indie rock band DIIV and a Label Relations member. “We don’t share a workplace. We’re all over the world. But a community where it’s normal to share your contract information is really important — because that gives you leverage over the systems of power.”
Similar conversations are taking place in the upper echelons of the music business, the anonymous professional says, with managers sharing more information than ever before.
Waiting for the industry to reform on its own, however, can feel like fodder for a Samuel Beckett play. Real change will invariably come when outsiders unite against the power center.
Muñoz, Cuco’s manager, says she found Cuco’s lawyer through a women’s circle formed by a friend. “My priority was building a team of people of color,” she says. “As POC in the industry, you know how it feels to be on the other end of the stick.”
In March, Muñoz launched a mentorship program, Casa Mija, to help young people learn about the intricacies of the music industry. “It really has to come from within,” she says. “Cuco knew how fast things were growing and he was creating this wide-open lane for other artists, like Omar Apollo and the Marias. Imagine if we were super tightfisted about our resources and relationships? Who knows what would have been of their careers? There are sharks in the water. But there are some gems in there that allow us to look out for each other.”