Owning A Label

J

JMD_Music

New member
To some of you this question may sound stupid, but I was wondering if it’s possible. So let’s say you run an independent record label. You have 4 very good, popular, and mainstream acts. All 4 release an album in the same year. Let’s say after a year, each album has sold approximately 500,000 units. And each cd costs over $10, so in revenue, you got around $20 million total from all artists (I know these numbers are high and unrealistic. Don’t pay attention to the numbers, just the situation) The artists all have a 360 deal so you got a cut of everything. Is it possible to just say you don’t want to run the label anymore, give the artist what they’re owed, and just take all the money that belongs to the label?
So basically what I’m asking is, imagine over time the label has a couple million in the bank, and the contracts of all your artists has run out, are you then able to close the label and just take all the money since you’re the CEO?
 
I just wanted to make sure cause it might seem selfish or something. It would be an opportunity to retire early and invest. And what if you have a staff of maybe 10-15 people?
 
contacts have run out!!! so the parties that signed the contracts are free to resign addditional paperwork or move onto a different business venture
as far as staff ppl in the music/media/ent. business understand its a high turn-over/risky job that may not last long depending on the company's success
most successful indie labels don't close they sell the record label off to another party and don't close the doors..now if the party that buys the label wants to bring it their own staff then yeah they have just lost their job...can we say steel workers,detroit auto makers

time to study standard business practices, JDM I know you have it in you
have you structure your plan yet with a timeline???



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JMD_Music said:
To some of you this question may sound stupid, but I was wondering if it’s possible. So let’s say you run an independent record label. You have 4 very good, popular, and mainstream acts. All 4 release an album in the same year. Let’s say after a year, each album has sold approximately 500,000 units. And each cd costs over $10, so in revenue, you got around $20 million total from all artists (I know these numbers are high and unrealistic. Don’t pay attention to the numbers, just the situation) The artists all have a 360 deal so you got a cut of everything. Is it possible to just say you don’t want to run the label anymore, give the artist what they’re owed, and just take all the money that belongs to the label?
So basically what I’m asking is, imagine over time the label has a couple million in the bank, and the contracts of all your artists has run out, are you then able to close the label and just take all the money since you’re the CEO?
Click to expand...

The answer to your question is completely dependant on the terms and conditions of the 360 deal. In each contract, there should be escape clauses which allow for any party to leave any agreement, at any given time. To put it simply, if you sign a contract as the CEO of a label, and the terms are written in such a way that you're allowed to exit the terms and conditions of the agreement, the sernario described in your original post may work out that way.

However, you'd also need to be the majority stock holder within the label and have the support of the other decision makers within the label's corperation. Unless your the exclusive owner of the label, your options for closing business indefinately are limited. On the other hand, it would be better to sell the company, or your portion of it, to someone who wants to own a record label; or your portions of it.
 
I'd be the exclusive label owner. And if there were a good amount of staff, they would all receive compensation if the label were to close. This would basically be an option if I had enough money in the label to retire early with.
 
JMD_Music said:
I'd be the exclusive label owner. And if there were a good amount of staff, they would all receive compensation if the label were to close. This would basically be an option if I had enough money in the label to retire early with.
Click to expand...

you maybe the owner but you'll probably have at less one investors if not more
this is just the way business capitals are raised even at a small ground root level
just like Jay-Z and Damon Dash

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ItsSnow said:
How exactly does a 360 deal work?
Click to expand...

the record label get a certain percent out of every business venture that artist(s) is involved in
which can be
1.record sales
2.tours
3.clothing line
4.commercial appearances
5.movie roles that artist lands
6.anything the artist gets paid to do
the label gets a cut till the contract runs out

360 deal - Wikipedia, the free encyclopedia

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JMD_Music said:
If you have a 360 deal but the artist has a manager that gets them shows, do you still get a cut out of that?
Click to expand...

the artist still has to play their manager/their lawyer/their account out of their share out money

I don't see why you don't understand the Label gets a certain percent in every business venture the artist gets involved in period
this is set in stone in the contract the artist signs
if Lil' Wayne had a 360 deal and started selling clothes called Weezy the label would get a cut
until the contract expired

with these 360 deal you do get an advance which you should be using to buy a home, two nice cars, and invest in your career and other business ventures so you can make the most money possible and then continue to have a good relationship with your label and they will continue to push your main product your image as a musician
which should gain you other image related ventures acting,endorsements etc....
more money you make the more money they make
which could be a big push for them to invest in you more


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JMD_Music said:
Well then a 360 deal with a new label is stupid because the label wouldn't have the funds to give an advance.
Click to expand...

Depends if it's a new label started by an established artists/record executive producer who worked or was signed to another label like
Aftermath with Dr. Dre

indie labels don't have the pull to get ppl to sign to 360 deals unless the artists are uneducated and just sign the paperwork
 
This does sound a little silly.
Guy makes 20 million with his label and then CLOSES IT.
As opposed to hiring a new CEO, staying on permanent vacation and ALWAYS having an income- even after 20 mill.
 
How would you stay in permanent vacation and still have an income if you're not doing anything?

You already did it well enough and long enough = You can now hire someone to do what you used to do and be free to do other things.
If you're ambitious that might involve flushing out new opportunities and avenues and GROWING and EXPANDING the the business instead of TENDING and to it.
If you are done, that would would mean sitting in your office, surfing the internet, updating facebook, reading twitter, playing angry birds and arguing on forums- probably not music ones since those would be people arguing about you.

Or you might be on a golf course just getting updates and saying yes and no to that guy who is so much like yourself when you were young, eager and willing to grind at something for 24hrs a day. That's pretty much the END GOAL of everyone.

Getting MORE done by DOING LESS.
Pure economy.
Being more productive while spending less time, energy and effort.
It's why companies use overseas labor.
It's why companies have interns.
It's why the superhero has a sidekick.
 
by evolving your company into a scalable business model as much as possible
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