Droppin Jewels: Million Dollar Deal

Nowadays in the Industry you hear all this talk about "Million Dollar Deals." 50 Cent got a deal worth a million, Karina Pasian of Def Jam got six figures, Alicia Keys, etc. You may have also heard the word "Advance" thrown around a few times. What you don't hear about is the fine print and that word recoup. Let's make one thing clear advance and signing bonus are two totally different things. A signing bonus is or was the labels way of saying "thank you" to the artist/band for joining their company. It was an incentive. An advance is for a lack of better words a LOAN!! This is where the music business becomes a business.

Typically an advance is given to an artist/band once a contract is negotiated. This advance is sort of a budget that includes a bonus for the artist/band. That way if the artist/band goes over budget it will cut into their earnings and not the companies. This operates as a double edged sword. If the artist/band stays under budget then it is a huge perk for them. If not they will suffer what many artist in the industry become victim to.

Now what does an advance cover? Well, the purpose of the advance is to help sustain you as an artist until your royalties and publishing checks come in. It is also used to fund your project. Now here is the fun part. After an album is released, before the artist/band sees a dime from royalties etc. the record company must recoup, or get back all the money it extended to the artist/band. Ultimately, if the album does not perform to the expectations of the label, the label will more than likely drop the artist/band due to the fact they cost them money.

In short, be mindful and careful in the industry as everything that glistens is not gold. If you are able to provide most of the financial backing for your own project do so. The struggle may be harder but the reward is much greater. If you must use a major record label, negotiate a reasonable advance in your contract, or don't take one at all, as you will have to payback what is put out.

- Imani