Note: This piece was originally a guest editorial for DJBooth.
The hip-hop world was buzzing last week after video of LA rapper Blueface’s appearance on The Breakfast Club made it seem like he didn’t know much about his own record deal.
You can check out the video here, but the important moment happens when show co-host DJ Envy asks Blueface about getting signed “through Cash Money. . . Through Birdman.” Blueface shrugs, replying that he is signed to Cash Money West, saying specifically, “all I know is Cash Money West and Wack 100. . . You gotta ask Wack about the other people involved.” In the video, Charlamagne Tha God’s face is incredulous; he follows up, asking Blueface, “You haven’t seen your own paperwork?”
It sounds like Blueface has put his trust in Wack 100 (also Game’s manager), and that’s the most important part of any artist-manager relationship. However, his lack of specifics or knowledge of anybody beyond Wack 100 and Cash Money West (including their connection to Universal Music Group, Republic Records, and even Cash Money Records—all parties to this deal) made many ask how it was possible that he didn’t understand his own contractual situation. Others seemed surprised that he could be under contract to four different entities, and worried that it was unwise to sign such a deal.
This points to an important lesson: if you’re an artist, you need to understand what the contracts say and what their implications are. Blueface’s situation is all too common in the music business.
Signing a record deal is a major accomplishment. As an artist, having company support can make your career. But “getting signed” is not as simple as it sounds, and leaves out a lot of details about how the business actually works. Without a solid understanding of this, artists can get themselves into trouble.
To better understand Blueface’s situation, let’s first look at a basic principle that underlies the music industry: certain rights (most importantly, master recordings, music publishing, and name and likeness) are valuable enough to be traded in exchange for money. Performers and songwriters have these rights, but they don’t always know how to make money from them. Record companies and music publishers do.
Before we go any further, let’s define some terms, starting with Companies, Labels, Majors, and Indies. We create confusion by throwing these terms around loosely in the music business, but each has a specific meaning, and it’s important to understand them. I like to describe the difference between these four terms as a matter of personnel and distribution. (These are simplifications, but for the most part, they hold up.)
The difference between a company and a label comes down to personnel. A full-service record company has all of the necessary departments and staff (A&R, Marketing, Promotion, Finance, Business & Legal, Production, etc.) to make, market and sell records. A record label usually does not. Labels can be thought of as brands, and a record company may own several, each working on different releases. As the staff grows, it is better equipped to help artists, and labels will often look to do deals with companies in order to offer better service. Record companies can do this because of their size, and they can work with a diverse number of labels (brands) while consolidating their “back-office” to save money.
Companies and labels are not necessarily the same thing, but they can be related. Universal Music Group (the record company) owns Republic Records (the label), so if an artist signs to Republic, the contract will actually say that the artist is signed to Universal. To make things even more confusing, sometimes the label will deliberately obscure its relationship with the company to make it seem more “indie” than it really is.
As for majors and indies, the difference comes down to distribution. While digital distribution has upended everything in the music business, the primary distinction remains: majors “own” their distribution and indies don’t. Distribution is important, especially considering the promotion, marketing, and sales strength that comes with it, and the three major record companies (Universal, Sony and Warner) each own massive distribution enterprises. They also own multiple labels that use that distribution. This is a primary reason why the majors (and their owned labels) are so powerful: easy access to distribution on a worldwide scale. Indies (and indie distribution) just can’t compete in terms of size. And when you remember that every indie must find its own distribution, you can see how a major label is well ahead of the game.
Artists don’t always get signed directly. Since they are flooded with performers who want deals, majors often attempt to ease the process of finding talent by relying on connections. It is easier and more reliable for the major label to sign a deal with a production entity that furnishes an artist’s services than dealing with an individual artist. Third party involvement is also a sign that the artist has been vetted, and that investment has already been made in him or her.
While this may be good for a major, it may not be as good for the artist. The artist can say that he or she “got signed,” but it’s actually the production entity with the record deal. Those entities just pass along the artist’s rights and take a bigger piece of the pie. Since the artist has no direct contractual relationship with whoever is releasing their music, he or she can get held up if the relationship between the major and the production entity sours.
What does this mean for Blueface?
We know the following: Wack 100 manages him; Wack and Birdman (part owner of Cash Money Records) have an agreement involving their stake in Cash Money West, a subsidiary of Cash Money Records; Cash Money has distribution through Republic Records, and Republic is owned by Universal Music Group.
How is this possible? Contracts. They are the means by which rights are exchanged for money. At their most basic, record contracts cause performers to give away the rights to their master recordings in exchange for a share of the revenue generated. This is known as a royalty. Those rights can be resold—sadly, sometimes without the artist’s permission. Each entity in the chain has something that the next entity wants, and each time a deal is made, the rights get passed along with it. Each entity takes a piece, passing what remains back down the chain.
This is where Blueface’s lack of knowledge becomes apparent. If he doesn’t understand the contracts that he signed and isn’t aware that other people are involved in the deal, how can he know if he will make money? His deal with Cash Money West actually means that Universal Music Group gets the rights to his masters. Each of the entities involved takes a cut, which lowers his take at the end of the day.
If you made it through all of this, it should be clear that the music business is complicated! The language of the music business can be misleading, and deal structures can be confusing. Signing a record deal is not necessarily a bad idea, but its implications MUST be understood.