Contacts and contracts – why an artist can go gold one day and be flipping burgers the next (I)

“Today I want to talk about piracy and music,” Courtney Love told the industry-ites, artists, and computer music gurus at the Digital Hollywood Online Entertainment Conference (ironically, held in New York City).

What is piracy? Piracy is the act of stealing an artist’s work without any intention for paying for it. I’m not talking about Napster-type software. I’m talking about major label recording contracts. Artists want to believe that we can make lots of money if we’re successful. But there are hundreds of stories about artists in their 60s and 70s who are broke because they never made a dime from their hit records. And real success is still a long shot for new artists today.

Hank Shocklee had similar things to say. The producer of albums like Public Enemy’s It Takes a Nation of Millions to Hold Us Back, Shocklee took a position as the senior VP of A&R for MCA Records. Then after a few years he left the post:

I got tired of signing these kids, watching them make the record, then start taking limousines and stuff on the record company’s dime, forgetting that it was getting billed back to them out of their royalties. Six months later, they’d be sitting in my office saying, “Yo, what the fuck is up with this? My record went gold and I’m back flipping burgers.”

It all comes down to the contract, the holy grail of so many unsigned musicians. Many younger, less experienced artists get slammed here. Shocklee himself recalled getting grossly underpaid by the standards of the day for his first production. But it was a shor-term contract, and he could regard it as a learning experience in his career. A recording artist’s contract can last seven years or longer, which doesn’t allow for much of a learning curve if the artist expects to earn something from recording, even a name.

“One has to be very careful in contractual arrangements,” warned veteran music business attorney Jeffrey Jacobson. “Little provisions like mechanical royalties [the money paid to songwriters for every song on every album sold] not being subject to recoupment [of advances] can result in significant income to the artist. Cautions in these seemingly minor provisions can enable the debut artist with sales to eat.”

“Signing isn’t trivial,” added English music business visionary Rob Cumberland. “It can tie up your songs, your recordings, and your band (or you) for years if you get it wrong.”

For most artists, getting offered a contract is like a ballplayer making it into the big leagues. It tells artists that after however many years of struggling, honing their craft, finding their voice, someone wants to help them get their art to the masses, someone with the proven ability to do so.

What might not occur to the artist is that the only reason for a record company to sign an artist, from the days of Enrico Caruso, the first artist to demand and receive royalties in the early 1900s, until noon tomorrow, is that the record company is convinced it can make a profit. Record companies, like art galleries, are not in business for the art. For them, a contract has to make sense from a financial standpoint. Since many artists don’t think in terms of a financial standpoint, the contract is a means to an end. Sometimes, their end.

One music industry expert explains; the following contract came into my possession along with a box of other legal papers when I did research for another project. It has haunted the artists who signed it for the rest of their careers. While we’ve discussed the economics of being a recording artist, here we’re going to get down and funky, digging into the potential practical pitfalls and pratfalls inherent in signing a recording contract. I’m going to walk you through some of the contract’s most notable elements, both common and unusual. These pieces of paper and ink can, as Jacobson noted, determine whether artists get to develop their art, reputation, and bank accounts.