by Bob Donnelly, Esq.
Lommen Abdo Cole King & Stageberg
What's Wrong With 360 Deals ?
Let's focus on the terms of 360 deals, and I will explain why I'm so passionately opposed to them. First of all, in many of these 360 deals the record company will demand that their earnings come out of the gross revenues, meaning that, if the cash that the labels actually receive has been reduced by any parties in the middle of the transaction (even if those parties themselves add value, as, for example, many music publishers do), then the label will add those amounts back in before calculating the percentage of revenue they retain. Think about that for a moment. The manager doesn't get paid on gross, and the artist certainly doesn't get paid on gross why then should the record company be paid on gross?