The Breakdown of Drake’s Record Deal with Cash Money/Universal

Canadian hip hop superstar Drake

I’ll be the first to admit that I was disappointed when I found out Drake signed with Young Money/Cash Money.

Nothing against Cash Money but they have a horrible reputation with handling artists’ money. Cash Money drove away the Hot Boys (Juvenile, BG, and Turk) and Mannie Fresh–the producer who single-handedly built the sound of Cash Money Records–because of alleged financial mismanagement. Sorry, but if four different dudes leave your label for the same reason then something fishy is definitely going on.

Needless to say, I was skeptical that Drake would get a good deal signing with Young Money. After reading an L.A. Times Music Blog article detailing the mechanics of Drake’s deal, my skepticism has been put to rest. I’m actually pretty impressed.

Here’s the breakdown of Drake’s record deal:

• Drake is signed with Aspire/Young Money/Cash Money Records and is distributed by Universal
• Drake got a $2 million advance (I’ll give you a moment to read that again)
• Drake retains the publishing rights to his songs and only pays 25% of his music sales revenues to the label as a “distribution fee”

As you can see, Drake got a helluva deal. It’s one of the most lucrative deals I’ve seen recently, especially for a hip hop artist. This deal is a complete reversal of a typical record deal where the label earns the lion’s share of record sales and the artist struggles for years to get out of his/her financial debt to the label.

$2 million is a big advance to pay back but considering that Drake’s first album Thank Me Later will probably be the best-selling R&B/hip hop album next year, I don’t think he’ll have much trouble clearing his debt.

Major props to Drake’s management team (Hip Hop Since 1978 and Cortez Bryant) for negotiating a fair deal for their client. Cortez Bryant also manages Lil Wayne and Hip Hop Since 1978 represents Kanye West. Clearly Drake has a great group in his corner. With that kind of backing, Drake’s career is only just beginning.

Lesson for the Day

Here’s the lesson I want you to take from Drake’s record deal:

Record labels do not control the music industry anymore. Artists (once they have proven their talent and profit potential) are in a position to strike the kind of deal that fits their goals and their vision. Drake proved his profit potential with the 600,000+ digital sales of his single “Best I Ever Had”, which was available for free (on his mixtape So Far Gone) four to five months before it was released on iTunes.

Essentially Drake hired his record labels (Universal/Young Money/Cash Money/Aspire) to distribute his music in stores. Drake’s record labels do not own the masters to his music and they do not control his career, he does (with help from his management team, of course).

Obviously Drake did not sign the first deal that was offered to him. If he did he would have regretted it and he never would have gotten the spectacular deal he has now.

You might not have Drake’s management team but you do have common sense.

With that in mind, would you sign a recording contract that leaves you with 0-50% ownership of YOUR masters and YOUR publishing rights? Would you sign a deal that says you only earn 10-18% of YOUR record sales? Would you sign a 360 deal that allows your record label to automatically earn 50% or more of YOUR touring, merchandising, and film/TV licensing revenues?

OF COURSE NOT!

But you know what? All of those things I mentioned come standard in a typical record contract. The powers-that-be in the music industry set this whole system up in their favor, not yours. But while their minds were busy focused on screwing artists (that’s you!), they forgot one important little detail:

Record labels need you–you don’t need them. No record label can operate without an artist roster (or at least a catalog of past hits). What can a record label do if they have no arists to market and no music to sell?

See how badly they need you?

With the internet (and a little bit of money to invest in your future) you have all the tools you need to record, distribute, and promote your music. So why would you ever pay a record label over 75% of the record sales for songs/albums you write?

Be smart. Don’t do it.

Alright students I hope you’ve learned your lesson for the day. Now go out, be independent and make some music!

AUTHOR:

Dexter Bryant Jr. (DbryJ)
DbryJ Music Media

Source:

The L.A. Times Music Blog