For many artists, a record deal with a major label is viewed as the proverbial pot of gold at the end of the rainbow. But as even the most casual music fan is aware, the days of tangible record sales, the advent of streaming, and the exploitative nature of '360 deals' has made signing on the dotted line anything but a sure thing for artists wanting to take the next step in their careers.
In the world of hip-hop, we continue to receive mixed messages in regards to signing a lucrative record deal. The famously unsigned Chance the Rapper and and Capitol's Lil Yachty both appeared on the list of the highest-paid hip-hop artists in 2017; the difference in their contractual positions effectively highlighted by their earnings, with the rappers making $33 million USD and $11 million USD respectively. However, rumors spread that Yachty was unaware of what his contract actually entailed (and whether or not he signed a 360 deal in 2016 which gave Capitol the right to collect royalties from each of his revenue stream).
Yachty would later clarify on Twitter that he was unaware of the term '360 deal,' and presented as fact that he owned his own publishing and had recouped a $1 million advance. It further fanned the belief that in the music industry today, artists are happy getting what they can versus what they deserve.
In recent weeks, two high-profile acts opted to join the major label fray; Lil Pump to Warner Bros. - for $8 million for a single project - and BROCKHAMPTON to RCA - for a deal which reportedly pays the 15-man collective $15 million for six albums delivered over three years, which doesn't touch any revenue associated with touring or merchandise.
BROCKHAMPTON figurehead Kevin Abstract assured the group's fans that, "Nothing changes we still in this living room making songs making out and all of that rca just gon help us push this gay agenda" [sic]. However, in a 2017 profile on the group in The FADER, Abstract made it clear that he aspires for the group to be as big as Cash Money, Roc-A-Fella, and Def Jam. "I just wanted to have my own dynasty," he said.
With all this in mind, what exactly does BROCKHAMPTON's $15 million deal mean? And does it help achieve Abstract's vision for the group?
Unfortunately, BROCKHAMPTON did not respond to requests for comment, so to shed light on the situation, we reached out to Jason Geter, an industry player who founded Grand Hustle Management in 2000 - which subsequently evolved into a record label in 2002 with T.I. as his partner. During the course of his career he's negotiated deals for artists like Travis Scott, Big Boi, Iggy Azalea, B.O.B, and DJ Drama for labels like Universal, Motown, Capitol, Atlantic, Columbia, and Epic Records. He wants to make it explicitly clear that he's not familiar with BROCKHAMPTON, their management, nor the particulars of their deal; however, his knowledge in the field still helps shed further light on how a record deal actually shakes out in the world of hip-hop:
"When you do a deal you have major line items: an 'artist advance,' 'recording fund,' 'marketing fund,' and, if you're lucky, a 'discretionary marketing fund' (which is a dollar carved out of the overall marketing fund that a manager/artist can spend at their own discretion without label approval)," he tells us.
Wendy Day, who founded the Rap Coalition - an organization which helps negotiate deals for hip-hop artists - and can count Eminem, Cash Money, and Master P as past clients, has written about artist deals for over a decade and has proven instrumental in shining a spotlight on the nuts and bolts aspects. Specifically, she points to a standard "artist deal" as being the worst an artist can sign.
"This is where money is advanced (usually $125,000 USD on the low end, to $500,000 USD on the high end), recouped, and then the artist receives between 12 and 15 points," she says. (To clarify, an advance is essentially a loan; if and when an artist can recoup the initial payment, that's when money can start to be made for both the artist and label alike.)
In one of Day's examples, if an artist on a standard deal actually recoups their advance and makes a label $500,000 in profits - stemming from $50,000 in marketing costs - it results in a meager $10,000 for the artist to actually take home.
Both Geter and Day are in agreement that a distribution deal is the most coveted record deal an artist can sign. "[An artist] maintains ownership of their 'masters' and all of their rights," Geter says. "Remember what Master P said about turning down millions in exchange for a distribution deal."
Geter is referencing Master P's unprecedented distribution deal with Priority Records in 1996, where he maintained 80 percent of his masters by actually paying the label $200,000 as opposed to receiving any money up front. "This is the real way to get paid with success and maintain control of your career, he says. "Which may mean taking a minimal advance and often even coming out of your pocket and covering certain expenses. With distribution you are paying the label or distribution company a percentage to administer (help exploit and collect earnings on) your music."
Of course, Master P's deal is certainly the exception and not the rule. Most splashy deals are much more similar to Chief Keef's 2013 deal with Interscope for $6 million - which upon closer examination revealed that the label gave him a $440,000 advance, $300,000 to cover the cost of recording Finally Rich (which sold 50,000 copies during the first week it was released), and another $440,000 to establish his own label, Glory Boyz Entertainment.
Let's consider that BROCKHAMPTON's RCA deal is comparable to Chief Keef's in terms of the advance received versus the announced deal. At four percent, BROCKHAMPTON could potentially be receiving a $600,000 advance and another 5 percent ($750,000) for the cost of recording an album.
With the shift in how we consume music, most artists' profits have fallen as a result of streaming. Whereas 12 percent of a CD - which retailed for $15 - isn't a mind-blowing number, it did expedite the process of recouping an advance. Now, take into account that Spotify, Pandora, YouTube and Apple Music each pay, respectively, $0.0038, $0.0011, $0.0006 and $0.0064 per stream. As for an entire project, it must be streamed 1,500 times for an album “sale” to be counted. That means that BROCKHAMPTON's catalog of RCA-funded songs will have to have 157,894,737 streams on Spotify to match the $600,000 advance, mostly culled from the group's 2,575,494 monthly listeners.
While one might think that BROCKHAMPTON's real coup is their ability to control their income from touring and merchandising, Geter tells us that every deal he has negotiated has included something similar. "Every artist should fight to maintain their rights to touring and merch," he says. "This is one of the biggest earning components of an act's career. The labels will often write in a 'first right of refusal' on your merch. Which means that it's yours, but as soon as you are ready to do a merch deal they have 'first rights.' Sony has a merch arm with 'The Thread Shop' and Universal has 'Bravado.'"
Although it's impossible to decipher if BROCKHAMPTON's record deal with RCA is a good one or not without knowing exact details, it still brings into question what a label can provide them that they couldn't have achieved themselves - especially given their desire to continue producing music and content in-house.
“[RCA] understood that we wanted to be the biggest boyband in the world and I’m a firm believer in not being able to do everything on your own,” Kevin Abstract said. “Find people whose morals and vision align with yours and follow that. Apple had to get out of the garage at some point. Thanks for giving a fuck and thanks for my management for guiding us in the best possible direction yeehaw.”
BROCKHAMPTON is managed by husband and wife duo Christian and Kelly Clancy (also unavailable for comment for this story), who helped shape the career of Odd Future. It's particularly interesting that when negotiating a similar deal for that collective back in 2011, they opted for a distribution deal with RED Distribution/Sony instead of an artist deal.
“It’s based on getting the distribution deal we’ve always envisioned that allows the group to ‘sign themselves’ to their own company and keep their masters, Christian Clancy said at the time. "They will have 100% creative control of all aspects of their music, art, and release schedule with no third party participation in outside business. Freedom and ownership was the whole point. Red and Sony know that it’s in everyone’s best interest to maintain the group’s authenticity and control. They built it, they deserve it. There’s no cheesy hooks or fluorescent liquor product placements in the works. It’s about to be fun... and different.“ Tyler, The Creator's sentiments at the time seemed to echo what Kevin Abstract hopes to accomplish with RCA, saying, "Same People, Same Shit, All in House."
BROCKHAMPTON already seems to be having an identity crisis before they've even released their first major label album. On one hand, they've made it abundantly clear that they don't aim to seek outside "magic" from labels who often invest $1 million for a single song that they believe can catapult an artist into the stratosphere. Yet Kevin Abstract seems to want that level of notoriety for the group, saying, "When you mention Bieber, Lorde, One Direction: I want to be on that list."
Chance the Rapper seems to be one of the only artists of his generation who ascended to superstar status without a music label backing him. It remains to be seen if BROCKHAMPTON can achieve a similar status by both embracing the label system and simultaneously rejecting the creative influence that comes with such a structure. Right now, it's a $15 million experiment where value is hard to quantify.
For more in-depth pieces, read our take on why Cardi B's "Get Up 10" is her best song yet.