Is that typical, that you go on tour, and it is a giant “pay-to-play” gig? It seems to me, with the “pay-to-play” concept, you are lucky if you break even, unless you have a big following.
Well the major labels are not charitable organizations, they have highly trained people spending their careers carefully focused on the bottom line only. I think of the music business like I do the lottery; we all see the big winners and rush out to buy tickets.
Edit: By the way, this Saturday’s Powerball is at $304 million . . . .
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Do they allow the artists and their representatives a chance to read the contracts before they are signed ?
That’s a not an accurate assessment of what’s going on here. I mean it really comes down to the fact it takes money to make money. Ya know? Both sides have a lot of risk involved. The artist is risking their careers when they sign that deal, the labels are risking their cash. Is more symbiotic than it is a one sided rip-off. You can’t build a huge super star level career without the access to the infrastructure and of a partnership with a label. I understand this ‘partnership’ is not the way to go for all artists. And that’s ok. I guess its just how you look at it 
Let’s be realistic: there is no risk for the artist. The number of artists that would have a ‘career’ without signing a deal is so low it’s hardly a factor, so the only risks they take when signing a recording contract are related to their own bottom line.
But sometimes there is. We’re taking about scaling a commodity. Anytime you have a growing business and attempt to add someone to a partnership, there’s always risk for both sides. I agree with you, but only in the case of a total nobody who has nothing to loose getting signed and receiving a huge break. Then the investor is taking the entire risk.
But consider a deal where someone has 3 successful restaurants running in a region and a chain approaches them to buy rights to implement franchise licensing across the country. You’d think the restaurant network wouldn’t have much to loose, but really bad things can happen if they loose control of the brand. Or if the partnership goes south, one party defaults on the agreement, both parties can start taking serious financial damage and not necessarily have a way out.
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This seems to confirm that. They say they went Platinum (1 million sold) and had to then record another album right off that tour. They mention $2 million in debt.
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Stan_Halen,
Thank you for sharing! Glad I didn’t have a false memory. It cracked me up that David Lee Roth says his relationships last 20 minutes. I talked to him for a minute at a restaurant in Pasedena: he clearly wasn’t thrilled to talk to me, but he liked talking to the waitresses! My dental hygienist said her friend was driving down the freeway, and a limousine pulls along side her car. Then David Lee Roth is hanging out the window and hitting on her. She would have gone for it, but she was picking up her mother at the airport. At another time, I knew this coworker at this place I worked at in Los Angeles. She lived in Pasedena, and ran into David Lee Roth in a grocery store. He was totally hitting on her, but she was not interested. She even said she liked me better!
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Jeez, sounds like Dave got more leg than Gene Simmons. You’d think a famous stud wouldn’t be so quick to grab every piece of tail he laid his eyes on. Are these stories from back in the late 70s and through the 80s? Hopefully Dave isn’t still doing that kind of thing. 
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I heard these stories roughly 10-15 years ago, and not sure when they actually took place. Though I remember hearing (long ago) David Lee Roth had paternity insurance with Lloyds of London in case he got anyone knocked up.
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Yes, I read about that a long time ago and I assume it was true.
Ok, I will (over) simplify this. The band pay ALL the recording costs /mfr. expenses out of THEIR 50% share AFTER all outgoings. Let that sink in for a bit…
So If the band owe $1.8 million just to RECOUP, then that means the album must make $3.6M after mechanicals etc. which are paid out on pressing actual product, NOT sales. Hence the reason the songwriter - whether in the band or not - can be a millionaire before the band technically earn a penny (not withstanding any advance, which is effectively just a very expensive loan anyway); sorry for the very rough analogy…
nb. Stan, no offense meant if you already understand this, its kind of a more general statement for all readers 
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I don’t understand as much as I’d like to think. 
But I’m learning. Thanks for the clarification.
No biggie, Stan but thats why, when they (van halen) say ‘we owed a million… no, 3 million, well maybe 2 million’ - within about a minute… its all probably pretty accurate, when you think about it
Like Jonathan said, the record company is taking ALL the risk… so yeah, it only matters when it pays off
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vtr,
Is that just an example? I would be surprised if Van Halen initially made 50% of anything. I remember reading or hearing Michael Anthony saying they initially had “the worst record contract ever”. Probably not literally true, but I’m just saying…
Back in the 70’s, Grand Funk Railroad covered the song “The Loco-motion”. It seemed like a huge hit back then. A black woman originally wrote the song, and I read she made a grand total of $200 in royalties. I’ve had 20 songs get radio play and have received zero royalties, which I hear is typical. Each song probably only got played once, so it’s not like it’s worth it to me to be with BMI or ASCAP or similar.
Mechanical royalties are not artist royalties.
Mechanical royalties are paid by a publisher to the owner (usually the writer) of the song itself.
Artist royalties are basically sales revenue.
Neither are paid by the item pressed, they are paid after the fact, based on actual sales, sometimes up to a year down the line.
It’s true that with some licences, the record company must pay by the item pressed rather than actual sales, but these are normally small producers who have not been able to prove their creditworthiness to the licensing agency.
The above is UK law, I’m not sure how it works in the US.
Either way I’m struggling to understand why they owed so much money, they only spent a few grand actually recording the albums. It may be the case that they had taken large advances from Warner.
Then she is owed some money. You can’t just ‘not pay’ someone you owe money to for use of their intellectual property, that’s what the law and the collection agencies are set up for. It may be the case that she chose to sell the rights up front, or that she was working for a song writing company who automatically owned anything she wrote. (Like the guy who invented Post-It Notes).
It depends which radio station. If it’s not a national station broadcasting to millions of people then that would be about right.
AJ113 and others,
I’m no expert on the topic, but I’ve read it all comes down to the record contract you sign, and I’ve heard record companies know most musical artists will sign any record contract they are offered. That’s why it is important to have a lawyer who specializes in that sort of thing to go over the contract. So many contracts are written in legalese that only a lawyer would understand. If you sign a contract saying you will make a penny for every CD you sell, and have to pay tons of expenses you will probably lose money. I think a lot of musical artists think that all they need is a record contract, and they will be rich. I read New Order (one of my favorite bands) made an album, and they insisted it have some sort of expensive artwork on the cover. I heard they lost money on every copy sold for that particular album with that artwork. The woman that wrote “The Loco-Motion” might have had a contract that said the record company will pay her $200 for every hit song she writes, and that is what she would legally receive. Though I have no idea what her actual contract said. The first song of mine that got played on the radio was on the Radio BBC. It is my understanding it got played in all or most of the United Kingdom and much of Europe (and I heard it live on the world wide web). Before they played it, Tom Robinson asked (via email) for permission to play it. That probably means I gave away my right to any royalties, but I doubt they would have played it if I insisted on receiving a royalty. Later, a radio station at the Southern tip of Texas played 18 of my songs in a one hour radio (NPR, I think) show. I live near Los Angeles and the radio show was not on the internet. The DJ sent me a CD recording of the radio show, and the radio station was pretty vague about the truth that it actually got radio play (I called the radio station on the phone to verify the DJ wasn’t making up stories). I don’t recall giving any sort of permission to get played for free. The most recent was 106.7 FM KROQ in Los Angeles, and it was on their podcast for a long time. I have no idea how many people heard it, but in theory it could have been millions of people (probably much less though). They only played about 15 seconds of the song, so that’s probably how they weaseled out of paying royalties on that one. I listened to the Grammies once where an artist (on TV) complained about not receiving royalties they were owed by radio stations. But if you complained too much, they would probably just stop playing your music.
Not the ones I’ve seen. It was maybe a thing in the past.
Firstly, it’s not always necessary, because (at least in my experience) the wording is perfectly understandable, and it’s just a case of whether the artist agrees to the terms or not. Further, lawyers are very expensive, and involving one might make a big dent in the remuneration.
Of course you would, but who would be stupid enough to sign such a contract? And which record company would be stupid enough to think they could get away with such a contract without legal and judicial recrimination?
Ok, but that’s clearly the band making its own decisions and taking responsibility for them accordingly. It’s not really what we’re discussing, which is (alleged) mistreatment of artists by record companies.
That’s not how it works. The BBC fully expects to pay whatever is due in royalties, in fact it has a reputation to uphold and cannot be seen to be mistreating artists. You did not sign anything away by granting permission - far from it, you granted yourself the right to earn some money by having the BBC play your song on national radio. You say you didn’t get any royalties, did you try to collect them?
FYI Tom Robinson broadcasts for BBC Radio 6. You should be due about £5 - £8 per minute of airplay.
Again, that’s not how it works. They don’t need your permission. They play it - you (or your publisher) collect the royalties.
When you say ‘weasled out’, what actually happened?
Again, that’s not how it works. You claim from the collection agency, not the radio station. If these artists have not received royalties that are due as a result of airplay, then they need to get themselves a new publisher.
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OK but if you’ve got three successful restaurants with a national rollout deal on the table you are going to get a shit hot lawyer involved to secure your position within that deal.
AJ113,
I was thrilled the Radio BBC played my song, so to me it is not worth getting all riled up over $30 or less, and demanding a check for that amount. As far as KROQ playing one of my songs, they were playing local artists (some were already famous) that had songs with a Halloween theme. I don’t know the laws regarding this, but I assumed that perhaps they don’t owe you a royalty if they just play a portion of the song? Or if they only pay you a few bucks per minute, then I’m entitled to less than a dollar? Not worth pounding on KROQ’s door for that amount of money. I was just excited they played my song. I have no idea what royalty rate Van Halen made on their first album or two, but it must have been very small. I read a book about the music recording business, and it recommended getting a lawyer to read the contract. I doubt a talented group like Van Halen thought they’d be ~$2 million in debt after selling a million or more albums. I have a couple of friends that got a little bit of radio play with big Los Angeles radio stations (including KROQ), and they received no royalties. That reminds me of a story. I heard this from my dental office also. This singer goes to a Christian (!) radio station and attempts to get the station to play her music. They said they wouldn’t play her music unless she paid the radio station money! I’m sure that is illegal, but that does not stop things like that from happening.