According to the American Bar Association a 360 Deal is a recording contract that allows the record label to receive a percentage of the earnings from all of an artist’s activities rather than just earnings from record sales. These deals also called “multiple rights deals” take a percentage of an artist’s ancillary rights, which could be the earnings for anything from concert sells to merchandise to any endorsements an artist might land. The record label basically becomes the artist’s manager and is basically in charge of pretty much every aspect of their career – to include those non-musical endeavors as well.
While 360 deals are still relatively new, having gained popularity among record labels in the early 2000s when music revenues began to fall, they have kicked up quite a storm in regards to what many deem as an “unfair” set up for artists, particularly those just starting out. Often described as a “money grab” on the behalf of the label, the 360 deal reflects the fact that much of a musician's income now comes from sources other than recorded music, such as live performance and merchandise. Notable artists who have 360 deals are Lady Gaga and Jay Z and Madonna who are both signed to Live Nation.
Despite the bad rap that this type of deal gets, 360 deals can be beneficial to an artist, but only if properly negotiated. It is important to know that there is no such thing as a "standard agreement". There’s room for negotiations, however the less established you are as an artist the less leverage you have. If not properly negotiated, a 360 Deal could spell heartache for a new artist who may not be privy to the fact that they could quite possibly be signing all of their rights away. It’s best to allow an entertainment lawyer to look over any contracts presented to you. The best way to avoid getting got is to know your stuff, research and keep in mind what it is you want from a record deal. You may find that one of the other deal structures is more suitable for you.
By Lisa Early