Behind the Music: The Anatomy of the Record Deal

So you want to be the next Jay-Z, huh? You don’t have a music deal; but you’ve got a dream and a demo. You can’t afford tracks by Swizz Beatz, but your homeboy has dope beat-making skills and has agreed to front you for free on studio time. Plus, you’ve got a gazillion Facebook friends and Twitter followers, some of whom have even dropped a few bucks to download some of your music.

Now what?

As part of our continuing coverage of the business of music for Black Music Month, we asked music business insiders for the answer to that question.

Before you try and set up that appointment at Universal Music, entertainment lawyer Corey Boddie–who has repped producer Jermaine Dupri, reggae star Wayne Wonder, rapper Black Rob, R&B singer Ginuwine

and others–says you’ll need to decide what you’d rather be: famous or rich?

“I always ask my [new music] clients, ‘Where do you see yourself in 10 years?” says Boddie, who currently reps Suzie Ketcham and Jennifer Williams of VH1’s Basketball Wives. “If being famous is your main goal, a major label [like Sony or Universal] is probably your best route, but it’s a risk. More than likely you’ll get a 360 deal, where thegives you a modest advance and will pay for your marketing and publicity and other expenses but will own your music outright. If you’re looking to make a lot of money on the business end through a variety of avenues–say you’ve been writing and producing your own music and have created a serious buzz for yourself via social networking –an indie label [from G. Unit to Hidden Beach] may work better for you. They may not have a big budget for you to work with, but they’ll split everything with you–album sales, touring, etc.–so you’ll make more money and still possibly retain your own masters.”

Music executive Kedar Massenburg

, president and CEO of Kedar Entertainment (Joe, Ginuwine) and former president of Motown Records–famous for everyone from Stevie Wonder and The Jackson Five to an artist he discovered, Erykah Badu–says one of the biggest keys to securing the best deal possible is finding the right people to advise you.

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“Having a lawyer who knows how to read record company contracts and negotiate music-specific issues like royalties is essential,” he advises. “He or she must be able to read and understand the type of boilerplate contracts you will offered and understand what the standard amounts are for a new artist to make. Just any old attorney won’t do.”

Plus, adds, Boddie, you’ll need your attorney to negotiate contracts between you and the other key folks on your team–your business manager and accountant.

“A deal is generally broken down

into three components,” Boddie explains. “The first is for the [music deal] itself, which covers album creation. The second is for touring and the third is for publishing. Whether you’re with a major or an indie label, they’ll want a piece of all of the action and so you’ll want to position yourself to be able to keep as much of the pie as you can.

You can do this, says Massenburg, by doing as much of the heavy lifting on your career before you get to the signing table.

“If you’re self-contained–meaning you can do things like produce your own songs, you’ve got own studio, have developed a fan base, are on the radio and/or have already recorded a quality, marketable album–you can leverage your position,” he says. “It’s possible for you to negotiate a 50/50 profit from your label, as well as retain ownership of your masters and other advantages. Ideally, a [major] label will just buy the album from you and then just kick in marketing and publicity, which gives you the benefit of having a huge machine behind you,” says Massenburg. “I’d sign with an indie as a last resort,” he adds.

But don’t rely on your own ears to tell you whether you’ve got a hit album on your hands,” he warns. Instead, he says, surround yourself with people who aren’t afraid of hurting your feelings because they’ll save you the embarrassment of attempting play hardball with a label for a deal when you only have a commercially sub-par product.

“As an artist, you’re not going to be objective,” he says. “Have a team around you that doesn’t fear you and isn’t scared of pissing you off because they’re on your payroll. Have a team that understands from a business, marketing and promotion perspective what will work. At the end of the day, no one cares about the message. Executives only care about your ability to sell.”