Legal Drama, Music Business

EricMany Ltd. & Runtown Settle Dispute — 7 Deadly Sins Every Artist Must Avoid When Signing a Record Deal

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After what seemed like an all out war, Eric Many and Runtown have finally settled their dispute. See letter from EricMany Ltd. below. Artists, in case you missed it, listen or read my article on the 7 Deadly Sins Every Artist Must Avoid When Signing a Recording Deal.

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7 Deadly Sins Every Nigerian Artist Must Avoid When Signing a Recording Deal 
 
In the last few weeks, news stories of ugly clashes between record labels and artists have dominated headlines; as a result of record deals gone bad. Examples include Chocolate City’s M.I Abaga versus Milli, Runtown versus EricMany Ltd., and Skales versus Baseline Records. Below are seven (7) deadly sins every Nigerian artist must stop committing when signing a recording deal; to avoid the kinds of ugly clashes we have seen these few weeks:

  1. Being too desperate to sign a contract.

This has to be the number one deadly sin most Nigerian artists commit. Most are desperate to become the next big star like Davido or Wizkid that they are willing to sign their lives away. This kind of desperation can prove fatal and lead to situations like the recent case of Skales with Baseline Records; or the ongoing legal showdown between Runtown and his label EricMany Ltd. As an artist negotiating a record deal with a label, you must understand one of the most important rules of negotiation; don’t walk into the room desperate. If you do, 10 out of 10 times, you will walk out a slave.

  1. Having zero leverage at the bargaining table.

As an artist, you are the brand, the creator and the business owner.  Therefore, you must build and strengthen your leverage, before negotiating a record deal. This means you should consistently create good music, build your fan base, market, promote and sell your music before you think of signing a record deal. Keep track of your record sales, the number of live gigs you book, the number of fans you have etc. This data is critical and will help you maximize your leverage when the time comes to negotiate a record deal with a label.

  1. Having zero knowledge of the music business.

A few months ago, Seyi Shay who was previously managed by Mathew Knowles, father to Beyonce Knowles-Carter, was asked in an interview what  ‘EP’ meant. She replied ‘Electric Package.’ Her response went viral and industry heads, fans, and the public mocked her for not knowing that EP meant Extended Play. However, as a few pointed out, the truth is Seyi Shay’s situation is not unique. Most Nigerian artists lack basic music business education, even if they are successful, and are unwilling to seek knowledge. As an artist interested in signing a record deal, you must have a basic grasp of the music business and understand some of its basic lingo. This allows you to listen, and ask the right questions to gather the right information so you don’t sign your life away.

  1. Signing a cut and paste western record contract a label found online.

Nigerian record label owners please stop cutting, pasting and presenting record contracts you find online for your artists to sign; especially western record contracts. Artists, please stop signing these contracts. Instead, create and tailor your contract to reflect your music business environment much the same way Olamide and Lil’ Kesh have. In April 2016, Lil’ Kesh announced he was no longer with Olamide’s YBNL records and that he had set up his own label; the news created uproar among fans and the public. The duo, however, clarified that Lil’ Kesh signed a two year record deal, the term had expired and both agreed Lil’ Kesh should strike out on his own; although YBNL would still act as his management team. Olamide’s custom tailored contract deal is an example to follow.

This is because there are many key distinctions in Nigeria’s music market versus a western music market; and many of the terms in western contracts are completely inapplicable in Nigeria’s music business. For example, a record contract in the west can range from 75-100 pages because of the traditional and long-standing music business infrastructure in western society, including control of distribution channels. Nigeria has no such infrastructure or history. Instead, Nigeria’s music industry is deeply fragmented with one-man, one-woman record labels. Further, labels do not control distribution channels; which means songwriters and recording artists have been unable to earn income (royalty payments) from music publishing or sales of recorded music. They earn their living strictly from live entertainment income (concerts, sponsorships, and endorsement deals).

In fact, most labels have no way of distributing your music nationwide. That power still belongs to Alaba marketers (for sales of music in physical formats i.e. CDs), and in recent times telecommunications companies, both of whom directly negotiate with artists, just like they do labels. Most Nigerian labels also do not have the funding to carry out their primary function of marketing, promoting and selling records.

So, if you are operating or will operate in the Nigerian music market, don’t sign a copy and paste western contract filled with terms that are simply inapplicable to Nigeria. It makes no sense. Think outside the box and create a contract tailored to your industry, a hybrid, with room to renegotiate the terms when the contract expires.

  1. Failing to research the background of a label or investor.

“Be careful who you get in bed with,” is a common entertainment business advice. Do your research. Does the potential record label owner you want to do business with have experience operating a record label? Do they really have the industry connections to secure collaboration for you with Nas, Usher or Nicki Minaj like they promise? Is your potential label owner prone to violence? Will he pull a gun to your head when you ask for an accounting of record sales? Has he or she been convicted of fraud? Don’t wait till there is a falling out with your label to do your research. Do your due diligence before you sign the dotted line.

  1. Receiving an advance and not expecting a label to recoup its investment.

A record company is a business, just a larger business when compared to you the independent artist who is a small business owner. As a business, a record company invests in a specific type of product i.e. records; and expects a return on investment. Therefore, stop signing record deals, receiving a new luxury car, moving to a mansion in Lekki Phase 1 or Banana Island and expecting the label to not recoup its investment. Think of a record label as a bank that agrees to give you a loan to purchase your new home. The money is not free. The bank typically wants some kind of collateral, and expects a return on its investment. The collateral here is the ownership right in your music that the label can exploit. However, the difference is that the money you receive from a label IS NOT a loan. It is an advance and the label will recoup its advance, during the term of your contract; before you receive any agreed upon royalty payment for the sales of your recordings. If your contract expires and the label is yet to recoup all of its investments, the label swallows the investment costs.

7. Not hiring a competent entertainment lawyer: This is self-explanatory. Don’t wait till a record label accuses you of fraud, or obtains an injunction against you in a court in Nigeria; and the U.S. before you think to get a lawyer. Get a competent entertainment lawyer from the start.  Also, not all lawyers are created equal. A human rights lawyer, no matter how famous, is not an entertainment lawyer.

 

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Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia.

Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine. She is also an Adjunct Professor at the prestigious Academy of Arts University in San Francisco.
For legal representation inquiries, please email (uduak@ebitulawgrp.com). For blog related inquiries i.e. advertising, licensing, or guest interview requests, please email (africamusiclaw@gmail.com). Thank you for visiting Africa Music Law™.

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