The 10 Most Insane Music Industry Contracts
In the 1990s, a new wave of female singer-songwriters rose to prominence like PJ Harvey, Alanis Morissette and Poe. Never heard of Poe? In 1996, her debut, “Hello,” was praised by just about everybody, and her 2000 follow-up, “Haunted,” was even better. But when her record company was bought by Time Warner, her individual deal ended up being sold off to an oil executive named Robert M. Edsel, who basically made it impossible for her to release music or even perform. Why exactly Edsel kept her off the market for a decade is unknown — he probably just didn’t want to lose money on his investment. It took 10 years for her to legally extricate herself from the deal, but by then her career was pretty much dead in the water. She’s trying to make a comeback, but it’s going to be an uphill climb.
Unlocking The Truth
A common thread you’ll see in these contracts is that most of the musicians sign them when they’re young and inexperienced. One extreme example is metal band Unlocking The Truth, who came to viral fame in 2014 when it was revealed that the members were all in eighth grade. The trio signed a $1.7 million deal with Sony, which seems pretty good until you learn that they only get paid if they sell a quarter of a million albums — a feat that even top-level bands like Korn can’t pull off these days. If they don’t hit that sales mark, the kids will be on the hook to Sony for their $60,000 recording advance. Needless to say, the band is currently trying to get out of the deal. I guess it’s better to learn about this stuff when you’re young.
When you’re a young rapper just coming up and you get offered a deal, it’s way too tempting to just sign it. But plenty of MCs have found themselves tied to labels and managers who don’t have their best interests at heart. One of the most recent examples is Young Thug, the Atlanta rapper who many think could be the next big thing. In 2013, Thug signed a low-level deal with an Atlantic Records subsidiary for a paltry $15,000 advance — virtually nothing for a 360 deal that gave the company money from performances as well as records. That was before he broke through with “Danny Glover,” the huge underground hit that brought Thug to the attention of big names like Kanye West. For over a year, Thug’s label status was in limbo, making him unable to take an opening gig for Danny Brown’s tour or release official albums. With the help of some high-powered industry folks, the rapper was able to renegotiate, but the bad deal could have sunk his career.
Signed to Apple Records, British rock group Badfinger was positioned to be the next Beatles, with catchy, compelling songs written by members of the Fab Four as well as bandleader Pete Ham. But behind the scenes, the band was being ripped off by manager Stan Polley. He had arranged a contract where Badfinger’s royalties would be put into an escrow account and then disappeared with the money, leaving the band literally in poverty. Pete Ham was driven into deep despair by the collapse of his musical dream and committed suicide in 1975. His suicide note explicitly named Polley as the cause of his ruin.
When you read tabloid headlines about famous musicians going bankrupt, it’s hard to empathize – after all, they made more money than we’ll ever see in our lives. But when you examine matters more closely, things are a little less black and white. R&B songstress Toni Braxton was on top of the world in the ’90s, selling $170 million worth of records and taking home a pile of Grammys. But Braxton only saw a tiny fraction of that money — her first royalty check was barely over a thousand dollars. Sure, she spent more than she should have, but as her recording costs increased, she ended up deeply in the hole to her label. Lawsuits and negotiations ensued, but Braxton came out significantly poorer and even had to sell off some of the copyrights to her most famous songs.
One of the most popular boy bands of the 1980s, New Edition launched the careers of Bobby Brown and Bell Biv DeVoe, and paved the way for dozens of other groups. However, during their time together they sold millions of records and barely made a dime. The quintet was discovered by impresario Maurice Starr, who signed them to his Streetwise Records. Their debut sold like hotcakes and the group went on tour, but when the grueling concerts were over each member was given a check for $1.87, with Starr claiming that “expenses” ate up the rest. Things didn’t get much better for New Edition after they split from him — each member had to borrow $100,000 from MCA Records to get out of their contract, which left them in debt to the label for the rest of the decade.
When you’re first offered a record deal at the age of six, your perspective is bound to be a little warped. For singer JoJo, the deal she made with Blackground Records in 2003 would end up being one of the biggest mistakes of her career. Several artists on the now-defunct Atlanta label (which launched Aaliyah to stardom) have complained about the brutally bad terms they got on their deals, but JoJo’s was possibly the worst. The label sold a million copies of her first album and three million of her second, but when it came time to release a follow-up they kept delaying it for unknown reasons, despite dozens of songs being written and recorded. Because she was inked to a seven-album deal, JoJo was prohibited from releasing anything without the label’s approval, and eventually matters got so bad that she sued for her release, which she won in January of 2014.
One of the most essential artists from the early days of rock & roll, Little Richard blew the doors off the industry in 1955 with the release of “Tutti Frutti.” The song was a revelation, bringing Black vernacular into popular music in a way that had never been done before, and it’s widely considered one of the most important tracks ever recorded. But Richard was given just $50 for the publishing and performance rights to the song, meaning that the only money he gets from the track is 1/2 a cent for each album sold. Considering that “Tutti Frutti” has been licensed to sell tons of products and been covered by hundreds of artists over the last half-century, that’s an insane amount of money that he doesn’t get for his song.
The Rolling Stones
Even some of the biggest names in rock music history got conned by contracts. If legendary representative Allen Klein was on your side in the 1960s, he could certainly make big things happen for you, like he did for the Beatles. But Klein was also very much in it for himself, and he’d squeeze every penny. When Stones manager Andrew Loog Oldham basically sold the band to Klein in 1968, the other members started looking harder at Klein’s decisions. They discovered that they’d signed off on some pretty awful things. One example: in England, the Stones had a company to manage their publishing called Nanker Phelge. Klein incorporated Nanker Phelge USA in the States to do the same thing, but declared himself 100 percent owner of the company, and, by association, all of the Rolling Stones’ material. It took the band decades to extricate themselves from Klein’s mess.
One of the most iconic girl groups of the 1990s, TLC kicked out hit after hit for nearly a decade. But behind the scenes, no matter how hard the three singers worked they only brought in a miniscule $50,000 a year. The contract that the band members signed with manager Perri “Pebbles” Reid gave Reid ownership of the band’s name, a percentage of their publishing and bound them to her for eight entire albums. Reid, along with her husband Antonio “L.A.” Reid, put the group in a “360 deal” that gave the Reids a chunk of every penny TLC made. One of the biggest warning signs should have been that the lawyer representing TLC during the signing was Reid’s own lawyer, but by then it was too late. Eventually, the three singers had to pay Reid $3 million just to get their own band name back.