Expenses and Revenues of a Representative Record Contract


Excerpt from Steve Albini, “The Problem with Music.” The Baffler No. 5, December 1993

These figures are representative of amounts that appear in record contracts daily. There’s no need to skew the figures to make the scenario look bad, since real-life examples more than abound.

Advance: $250,000

Manager’s cut: $37,500
Legal fees: $10,000

Recording Budget: $150,000
Producer’s advance: $50,000
Studio fee: $52,500
Drum, Amp, Mic and Phase “Doctors”: $3,000
Recording tape: $8,000
Equipment rental: $5,000
Cartage and Transportation: $5,000
Lodgings while in studio: $10,000
Catering: $3,000

Mastering: $10,000
Tape copies, reference CD’s, shipping tapes, misc expenses: $2,000

Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Director’s fee: $3,000

Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000

Band fund: $15,000
New fancy professional drum kit: $5,000
New fancy professional guitars (2): $3,000

New fancy professional guitar amp rigs (2): $4,000
New fancy potato-shaped bass guitar: $1,000
New fancy rack of lights bass amp: $1,000
Rehearsal space rental: $500
Big blowout party for their friends: $500

Tour expense (5 weeks): $50,875
Bus: $25,000
Crew (3): $7,500
Food and per diems: $7,875
Fuel: $3,000
Consumable supplies: $3,500
Wardrobe: $1,000
Promotion: $3,000

Tour gross income: $50,000
Agent’s cut: $7,500
Manager’s cut: $7,500

Merchandising advance: $20,000
Manager’s cut: $3,000
Lawyer’s fee: $1,000

Publishing advance: $20,000
Manager’s cut: $3,000
Lawyer’s fee: $1,000

Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000 [to band]
less advance: $250,000
Producer’s points: (3% less $50,000 advance) $40,000
Promotional budget: $25,000
Recoupable buyout from previous label: $50,000
Net royalty: (-$14,000)

Record company income:
Record wholesale price $6,50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000
Deficit from royalties: $14,000
Manufacturing, packaging and distribution @ $2.20 per record: $550,000
Gross profit: $710,000

 

THE BALANCE SHEET

This is how much each player got paid at the end of the game.
Record company: $710,000
Producer: $90,000
Manager: $51,000
Studio: $52,500
Previous label: $50,000
Agent: $7,500
Lawyer: $12,000

Band member net income each: $4,031.25

The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.

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