"Just Sign Here."

“Just sign by the X,” says the record exec as he leans in towards the artist.  The artist, who appears to be a young man approaching his thirties, sits there contemplating, but only vaguely reading the lengthy contract as he turns page after page. 

Before the sweat on his forehead can be visibly seen, the artist reaches for the pen and begins to sign a contract that does nothing more than make the record label rich off of his successes.

Unfortunately, this is a scenario all too familiar for many artists. Knowing your business is something that all artists need to know.  This is the situation for many artists who come to the deal by themselves.  Having a manager who is a trusted advisor is like having a family doctor or dentist.  This is someone who you rarely question, because you know that they are making decisions in your better interests.  Having a manager allows you to focus on what you do best.  The manager can handle business while you focus on your music.  At the end of the day, you need a strong team around you.  Some people want to think that they don’t need anybody, but in all reality, we all need somebody.  As a music artist by yourself, you can be good, but with a team you can be great.

One of the best examples of artists who did not have a strong team around them is TLC.  As young artists these ladies had the talent to get them that rare opportunity that so many artists pursue.  The problem, however, for these young ladies was that they lacked the proper support team.  This ultimately led to them signing one of the worst record deals of all time.  This Grammy award winning multitalented trio of women sold millions of albums to only make peanuts.  Well…okay, they made a little more than peanuts, but not by much. 

As the late Lisa Left-Eye Lopes explained in their 1999 VH1 Behind the Music special:

This is how a group can sell 10 million records and be broke, and everybody get ready to do your math. There are 100 points on an album, TLC has seven; every point is equal to 8 cents. Alright, seven times eight is 56 cents. That means every time an album gets sold, TLC gets 56 cents. Sell 10 million records: $5.6 million. So, LaFace Records had to spend about $3 million on [CrazySexyCool], so that automatically gets deducted from the $5.6 million before we can see a penny. Now, we have $2.6 million dollars left to split between the 3 of us. Well guess what? When you have that much money you’re in the about the 47, 48, 49% tax bracket, so that immediately gets deducted to $1.3 million.

The profit is then split three ways, with the additional funds going to managers, lawyers, accountants, and others.  Each member of TLC took home approximately $50,000 that year.  This, ladies and gentlemen, is why you need to know your business.  Knowing your business will help you to understand the music business as well.  You can’t be in the “music business” without the “business”.