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How to Get a Record Deal
February 10, 2003

By Wendy Day
Founder of the Rap Coalition

This is the question I am asked most frequently-- obviously by people who don't know me, because those who do know me ask me how they can sell more records on their own, not how can they get into a slave contract and become a sharecropper. But once again, for those who don't want to do for self, I will attempt to break it down from my vantage point. I see three ways to get a deal in this industry; and let me preface this by saying that I'm talking about a rap record deal with a reputable record label that has a track record and that has experienced some success in the rap music industry through selling records. I'm not talking about the bogus labels that spring up daily all over the country and decide "Poof! I'm a record label." These should be avoided at all cost until they have a proven track record, as most of them can't even do as much for an artist as the artist can do for him or herself. And I'm certainly not talking about the labels that already exist within the industry yet can't seem to sell more than 30,000 records, even with a talented artist.

So, I see three ways to get a deal (that you'd want to have) in this industry.
1. Get put on by an established artist (but bear in mind that you may only be as successful as that artist. It's rare that someone puts you on and you blow up larger). This means coming up under Busta Rhymes, Fat Joe, Snoop, Missy Elliott, etc. With any luck, the artist who puts you on is fair and doesn't do to you what was done to him or her when they were coming up. The examples I listed above have all been fair to the artists coming up under them so far.

2. Create a buzz. In a perfect world, you want everyone in the industry and on the streets talking about you before you get signed. Thirstin Howl III is a perfect example of an underground artist with a strong buzz. The trick is to keep it going til you get signed and then turn it up a notch so that the whole industry is buzzing about when you're going to drop (Ja Rule was a great example of someone who kept up the buzz). This doesn't mean you have to be from New York, Crooked Lettaz from Jackson, MS had an incredible buzz in Baton Rouge and Jackson surrounding them, which is how the Source discovered them for Unsigned Hype (through journalist extraordinaire, Charlie Braxton in Mississippi, and Riggs in New York), which led to the industry discovering them.

3. Sell units. This is of course my favorite one, because it proves to the labels you can sell (which means you'd better) and you have more control over the "fairness" of your deal, and often a choice of labels you want to sign with. In a perfect world, you want to be with a label that not only believes in you, but has an experienced hard-working staff in every department that can really make your project happen.

The average record deal for a new artist starts around $125,000 and 12 or 13 points (which really means 12 to 13 per cent of the retail selling price after you pay back all the expenses). There's a joke in the industry that no matter how many points you get in your contract as a new artist, it comes out to about 80 cents a record, if you ever recoup (recoup means paying back all the expenses).

I can count on one hand the number of rappers I know who've ever even seen a royalty check (royalties are part of the "back end"). The way to increase the figures in any deal, in favor of an artist, is for the label to realize that their risk is reduced. A label takes a risk when signing any new artist (risk meaning that the label could dump hundreds of thousands of dollars into an artist's career and the artist might only sell 8,000 records, which means the label loses a lot of money), but anything that can reduce that risk is considered a plus, and rewarded. This even applies to established artists. For example, Snoop Dogg when shopping a new deal will be able to say: he has Dr Dre producing for him again, he is expanding his awareness into mainstream America by appearing in a full length motion picture in 2001, and he has an autobiography out now in bookstores called Tha Doggfather which is getting great reviews. That's the way to maximize opportunity.

Slick Rick is about to renegotiate his deal with Def Jam or leave. The way he is maximizing his opportunity is by obtaining letters of intent from other platinum rap artists and producers to appear on his record. I am also shopping a cartoon idea that will star a number of artists, one of which is Rick. I am also looking for film opportunities for Rick. Anything that increases his ability to sell records beyond the 550,000 units his last album sold at Def Jam will help the label to see that he is a low risk commodity, even though he is a rap icon and considered “old school.” This is how to get the little "extras" in a record deal. Those extras could include more up front money (this is a double edge sword because up front money is recoupable, therefore it is just more debt. You want to get up front money for a number of reasons: to invest in something that will bring you more money like a studio or real estate, to force the label to make your project a priority by being so far in debt with them that they have to work your project hard to get their money back, to make certain you make money from a record label that has a reputation for not paying royalties or back end money, etc), more points on the back end, a better “stat rate,” less stuff to recoup, etc.

If you have a deal with a reputable label that seems to believe in you and you are confident that you are a priority, you may want to reduce the front end advance in favor of a larger split on the back end. With Twista's former deal at Atlantic we took no money up front in order to get 50% on the back end. Of course Twista had just appeared on a Platinum single by Do Or Die, and the perception in the industry was that he blazed that song. His deal worked financially, but would have really worked to his benefit had there not been a production company in the middle collecting the money. When I negotiate a deal, there are also times where I secure money up front for the artist that will be dumped back into the artist's project because I know the label won't. For example, in almost every deal I've ever negotiated with a major label, I've gotten between $25,000 and $75,000 for the artist to hire his own street team to work his project. Most of the radio driven majors don't understand the importance of building the artist on the streets first, so very often the artist has to do this for self. This fund is never recoupable. An artist shouldn't be taxed for an area where the label is weak, nor should the artist be taxed for something that falls under marketing of the record, like a street team. But in order to negotiate something like this, the artist must have something that the label deems worthy enough.
I guess what I'm saying is that you shouldn't take just any old record deal, you should have a deal with as many extras to guarantee your success as the label gets to guarantee your profitability to them. You are taking a risk with the label as well, but they NEVER see it like that. They always see their risk.

Regardless of the level of your recording contract, you need to go into your deal with the attitude that the label is your partner (even if you never make a dime, because it is YOUR career), and even if they drop the ball, you should be able to pick up the ball and run with it. They have many artists on their label, but you only have one career. Don't let yourself become the topic of an article in Blaze about "whatever happened to..."!! Bear in mind that the REAL hard work begins after you get a deal. You set the tone with your label. If the label has 3 artists, and 2 are lazy and never show up to stuff that they set up, but one is hardworking and arrives on time to everything, guess which artist will get the best push REGARDLESS OF THEIR LEVEL OF TALENT! Human beings work at record labels and it is human nature to work whatever causes the least resistance and stress. If it's easier to work an Ice Cube record than a Ras Kass record then that is exactly what will happen. If it's easier to work a Master P record than an Ice Cube record then that is what will happen. It has nothing to do with the level of talent or the sound of the music. This is a business. That's why it's called the music BUSINESS.



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