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Major Label Revelation Wrought with Constipation
The below document contains a "Major Label vs. Indie Artist Comparative Budget
Analysis" that Artist Manager Larry Scott recently submitted to me. The only Artist Manager
that I personally know WITH a bonafied "Business Management" degree, Mr. Scott reveals
horrible figures that most artists, whether signed or unsigned, never realize, much to the
advantage of the Major label, but to the disadvantage of the artist.
Yet, these figures (based on sales of 250,000 units) are figures that EVERY artist, signed or
unsigned, should be staunchly aware of. They are also figures which, upon their review, caused
such a migraine headache, I was forced to seek Motrin Extra Strength PM/AM, a product that is
not even in existence, except only in the world of Science Fiction.
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. income is
underlined, expenses are not.
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Advance:
Manager's cut:
Legal fees:
Recording Budget:
Producer s advance:
Studio fee:
Drum. Amp, Mic and Phase "Doctors":
Recording tape:
Equipment rental:
Cartage and Transportation:
Lodgings while in studio:
Catering:
Mastering:
Tape copies, reference CDs, shipping
tapes, misc. expenses:
Video budget:
Cameras:
Crew:
Processing and transfers:
Off-line:
On-line editing:
Catering:
Stage and construction:
Copies, couriers, transportation:
Director's fee:
Album Artwork:
Promotional photo shoot and duplication:
Band fund:
New fancy professional drum kit:
New fancy professional guitars [2]:
New fancy professional guitar amp rigs:
New fancy potato-shaped bass guitar:
New fancy rack of lights bass amp:
Rehearsal space rental:
Big blowout party for their friends:
Tour expense [5 weeks]:
Bus:
Crew [3]:
Food and per diems:
Fuel:
Consumable supplies:
Wardrobe:
Promotion:
Tour gross income:
Agent's cut:
Manager's cut:
Merchandising advance:
Manager's cut:
Lawyer's fee:
Publishing advance:
Manager's cut:
Lawyer's fee:
Record sales: 250,000 @ $16
Gross retail revenue Royalty
[13% of 90% of retail]:
Less advance:
Producer's points [3% less $50,000 adv.]:
Promotional budget:
Recoupable buyout from previous label:
Gross royalty to Band:
Less Recording and Video Production Cost:
Less Deficit from Tour:
Net Income to Band: (deficit)
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$250,000
$37,500
$10,000
$150,000
$50,000
$52,500
$3,000
$8,000
$5,000
$5,000
$10,000
$3,000
$10,000
$2,000
$30,000
$8,000
$5,000
$3,000
$2,000
$3,000
$1,000
$3,000
$2,000
$3,000
$5,000
$2,000
$15,000
$5,000
$3,000
$4,000
$1,000
$1,000
$500
$500
$50,875
$25,000
$7,500
$7,875
$3,000
$3,500
$1,000
$3,000
$50,000
$7,500
$7,500
$20,000
$3,000
$1,000
$20,000
$3,000
$1,000
$4,000,000
$468,000
$250,000
$70,000
$25,000
$50,000
$73,000
$185,500
$-875
$-113,375
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Record Company Income:
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Record wholesale price
$8.65 x 250,000
Artist Royalties:
Manufacturing, packaging and distribution @ $2.00 per record:
Gross profit:
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$2,162,500 (gross)
$468,000
$500,000
$1,194,500
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The Balance Sheet: This is how much each player
got paid at the end of the game.
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Record company:
Producer:
Manager:
Studio:
Previous label:
Agent:
Lawyer:
Band member net income each (3):
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$1,194,500
$120,000
$72,225
$52,500
$50,000
$7,500
$12,000
$- 37,792
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The band is now 1/4 of the way through its contract, has made the music industry more than 4 million
dollars richer, but is in the hole $112,500 on royalties. The band members have each lost about twice as
much as they would have earned working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time
and money on it. Since the previous one never "recouped," the band will have no leverage, and will
oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and
the band, strangely enough, won't have earned any royalties from their T-shirts yet. Maybe the T-shirt
guys have figured out how to count money like record company guys.
These figures are representative of amounts that reflect what an Independent Band would be looking at if
given that they put their own record out with a National promotion campaign, set up their own Publishing
Company for their own Royalties, worked with an independent national distributor, and booked a 75-100
city initial tour in support of the album's release.
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Advance:
Legal fees:
Recording Budget:
Studio fee:
Recording tape:
Lodgings while in studio:
Catering:
Mastering:
Tape copies, reference CDs, shipping
tapes, misc. expenses:
Video budget:
Crew:
Processing and transfers:
Off-line:
On-line editing:
Copies, couriers, transportation:
Director's fee:
Album Artwork:
Promotional photo shoot and duplication:
Band fund:
New fancy professional drum kit:
New fancy professional guitars [2]:
New fancy professional guitar amp rigs [2]:
New fancy potato-shaped bass guitar:
New fancy rack of lights bass amp:
Rehearsal space rental:
Big blowout party for their friends:
Tour expense [15 weeks]:
Bus:
Crew [3]:
Food and per diems:
Fuel:
Consumable supplies:
Wardrobe:
Promotion:
Tour gross income:
Agent/Promoter's cut:
Manager's cut:
Merchandising advance:
Manager's cut:
Lawyer's fee:
Publishing advance:
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$-0-
$5,000
$12,650
$8,000
$700
$1,200
$1,500
$750
$500
$4,700
$1,000
$2,000
$500
$500
$200
$500
$750
$500
$15,000
$5,000
$3,000
$4,000
$1,000
$1,000
$500
$500
$25,000
$2,000
$7,500
$4,800
$3,200
$3,500
$1,000
$3,000
$300,000
$45,000
$45,000
$-0-
$3,000
$1,000
$-0-
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Band-Owned Record Company Income:
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Record sales: 250,000 @ $16
Gross retail revenue Royalty
[100% of 90% of retail]:
Less Manager's Fee:
Producer's points:
Promotional budget:
Recoupable buyout from previous label:
Record wholesale price: $8.65 x 250,000
Manufacturing, packaging and distribution
@ $1.65 per record:
Gross profit:
Less Recording and Video Production Costs:
Plus Net Tour Income:
Net Income to Band:
Net Inc. to Band (3-piece band)
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$4,000,000
$3,600,000
$588,000
$ -0-
$5,000
$N/A
$2,162,500 (gross)
$412,500
$1,750,000
$17,350
$185,000
$1,324,650
$441,550
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The Balance Sheet: This is how much each player
got paid at the end of the game.
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Manager:
Studio:
Agent:
Lawyer:
Band member net income each (3):
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$588,000
$8,000
$45,000
$12,000
$441,550
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More information can be obtained regarding Larry Scott by sending an
Email request to lsmgt@smartbotpro.net or by visiting the web site at
http://www.geocities.com/scottmgt/. Information regarding Kenny Love's National
back
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