A modern record contract can claim a share of merchandise sales, touring income, publishing royalties and even book deals, not only the money an artist earns from selling recordings. Labels call this a 360 deal, and it began arriving as music piracy cut into record sales in the 2000s, promising artists more promotional and tour support in exchange for a cut of a wide array of their income.
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The scope of the deal shows up clearest in one contract that became public: the 27-page agreement Universal Music offered contestants on the Dutch-owned television format The Voice. Scandinavian label sources say the format’s owner wanted 50% of contestants’ record sales and 50% of songwriter royalties on any song they recorded. The 360 element gave the label 20% of the gross from every other income source tied to the artist, such as merchandise, biographies and performance fees.
Why labels reached beyond record sales
With the rise of music piracy in the 2000s, labels began insisting on 360 deals. These promised more promotion and tour support in return for a share of many artist income streams, among them downloads, merchandise and live performances.
That trade is easy to justify when an artist has no career yet and the label is the only path to one. Universal’s Swedish managing director, Per Sundin, defended The Voice’s terms on that basis, telling Swedish National Radio that contestants without an existing career had to pay for the opportunity by sharing “some types of income”.
Old deductions never went away
Some of what a label takes has nothing to do with the 360 structure. Van Halen’s original contract with Warner Bros. deducted 10% for “breakage” before calculating royalties, a term from the 1920s to 1940s when records were made of shellac that shattered easily in transit. The band members say that clause outlived the records it was written for. Packaging fees, another charge from the physical era, kept being applied even to digital downloads that came in no package at all. Alex Van Halen’s 2024 memoir “Brothers” recounts the band returning from a seven-month tour behind a debut album that had already sold more than a million copies, only to find themselves a million dollars in debt to the label.
What actually decides whether a deal is fair
Attorney Paul Schindler, a partner at Greenberg Traurig, says only four or five points in a record contract truly matter. The term should be as short as possible. The artist needs to know how they get paid, whether by royalty or net income, and whether they keep a stake in the master recording. The guarantees for advances and marketing spend matter, and so does the rate offered on publishing. An artist who succeeds can renegotiate, Schindler says, but one who does not “doesn’t matter what the contract says” because there is no money to divide.
When artists pushed back
The Voice’s terms did not survive contact with the artists asked to sign them. Swedish National Radio exposed the contract publicly, and the country’s musicians’ union called the terms absurd and unethical. Contestants on the Finnish version of the show contacted their own union, which pressed Universal to change several clauses. When the label’s first adjustments did not satisfy it, the union threatened to sue over seven of them, and some contestants quit the show rather than sign. Universal eventually agreed to break up the 360 deal in Finland and dropped its demand to also act as the artist’s manager, a role that would have put it on both sides of the same negotiation.
The deal an artist is still signing
Whatever a contract claims, it does not change the basic status of the person signing it. A recording artist is an independent contractor, not a label employee, so the label has no obligation to provide health insurance beyond its own staff. Singer Chappell Roan sparked an industry-wide conversation about that distinction at the Grammys in February 2025, calling on labels to treat artists “as valuable employees with a livable wage and health insurance.” Attorney Daniel Shulman, a partner at Eisner, said more transparency in contracts might have given Roan a clearer sense of that relationship.
