An executive I respect very much last night told me the following: with the music industry growing so quickly, it’s become all about money… So much so that in his view nobody even knows how to talk about it.

He went on to explain we see the massive deals getting written about in the press… But we also know the strong majority of deals are not on that level. He alluded to the extreme range in terms of defining the “financial value” of a deal.

Acts, their teams, and the press consistently boast large round numbers being offered to them or even executed as the deal.

So what is a million dollar deal?

Is it $1MM upfront in an advance payment?

Does the number include the recording fund?

Should committed marketing dollars or a guaranteed radio promotion fund be included?

Is it the advance on just the first album cycle or all album options in the deal?

I don’t see this language getting standardized anytime soon as story building is innately intertwined to our industry.

Everybody has their own definitions, but to me, a million dollar deal is the amount of money the artist takes home from the deal upfront – maybe it includes the recording fund as well. In my view, it doesn’t include the marketing or tour support fund or multiple albums (even if they’re committed), unless otherwise stated.

I don’t typically think of a $350K advance with a $250K recording fund and $400K in marketing commitments as $1MM deal… And think others should only describe it as such if they explain the structure of the entire fund.

Hypothetically, maybe a $1MM deal should be defined as the entire amount the label commits to spend on artist throughout the first cycle, but I just have never thought of it that way – I have always viewed a marketing or tour support commitment as on top of the deal and an indicator of the leverage and demand for the artist.

Every deal is different. Each artist has priorities that are important to them in a deal, whether it be a profit split, rights reversion, or a tour support fund. They want different structures and have various amounts of leverage determining if they can get what they want. Labels too have thresholds as far as what they are able to do. Today more than ever they can feel trajectory and define it with data.

It’s the balance of where these two meet that a deal happens.

Luckily, with the digitalization of distribution, artists have more options than ever before… So for both sides, it’s even more important to know what you want in a deal.

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