Gaga's Recording Contract

[Economy 47,759]

2 hours ago, gagzus said:

Also I’ve just realised that because of her contract, her net worth is the money she makes in a year from everything combined but most of that goes to her record label and then with taxes she probably only earns 10-15% of her net worth per year (so about $30m take-home after tax) 

Honestly tho... 10% to 15% is a very standard profit margin for businesses and Corporations

 

So if Gaga's take-home pay of her career brand is truly 10% to 15% and that's after taxes... That's actually pretty good

[TheSlash 14,539]

So, at least at the time of that version of the contract, Interscope could extend the contract indefinitely if her albums sold enough units  . Who needs a deal with Satan when Gaga is literally bound to them forever  .

Spoiler

Jk, Interscope seems to be OK  

And at least they don't force Gaga to release an album every X months/years  

[Mr S 8,373]

Thanks for the summary!
 

It makes me wonder how something like Artp0p happened if the label had that much control.

Personally, I'm ok with some of these restrictions. While I love her, she does seem to wander too much "out there" and get too spontaneous with her ideas. She does needs someone to say no sometimes. Control is not meant for every artist.

[gagzus 15,103]

16 minutes ago, Economy said:

Honestly tho... 10% to 15% is a very standard profit margin for businesses and Corporations

 

So if Gaga's take-home pay of her career brand is truly 10% to 15% and that's after taxes... That's actually pretty good

Oh absolutely but I mean for someone who does all the work and is the face of her brand I would expect her to get at least double or even triple. But I know that won’t happen

[Economy 47,759]

6 minutes ago, gagzus said:

Oh absolutely but I mean for someone who does all the work and is the face of her brand I would expect her to get at least double or even triple. But I know that won’t happen

What I'm trying to say is most of the revenue for any type of business goes to expenses... Only a fraction is the actual profit margin

 

The 85% the record label keeps is not like it's pure profit for them either. Most of it ends up being gone in bills too

 

So if a typical business gets 10% to 15% in profit margins, and that is what Gaga is getting, that's very good. Because even if her label has an extremely high profit margin of 30% over all which is rare (a few companies like Apple sometimes hit that but it's rare) then her label is not keeping more pure profit for themselves than what Gaga's share is

 

Of course the music business is so hit and miss with their margins by each release that it's near impossible to calculate a rough estimate of how much profit is actually made on average by artist unless u have a history of all their accounting

[TortureMeOnReplay 5,880]

47 minutes ago, Economy said:

I find it interesting how the 3rd album (if they count TFM as an album that means they mean Born This Way) got such a massive increase in fund budget

 

Perhaps the $575,000 to just over $1M contract was made at a time they didn't anticipate Gaga to become so huge hence the surge to $14,000,000

Just about every amendment to her contract gave her more money because she did better than they expected. They were skeptical of TFM doing well so they put clauses on whether or not it would count or not. The next amendment they wanted more albums. Then they gave her $14million for BTW and then $20million for ARTPOP. I'm not sure what happened with Joanne though because it's a oddly specific number. The $575,000 to $1M contract was before she released any music and named her songs things like Brown Eyes and Yeah Yeah lol

[DontCallMeAlice 1,577]

Why can’t she re-use old songs for a new album? Like why Interscope would prohibit her from doing it? I don’t get it. 

And why can they have her life insurance?  

[gagzus 15,103]

52 minutes ago, grigioboi said:

Why can’t she re-use old songs for a new album? Like why Interscope would prohibit her from doing it? I don’t get it. 

And why can they have her life insurance?  

The life insurance is because she is an investment and if they invest money in her and she were to die mid-album cycle they are entitled to compensation for their investment not being fulfilled, if she didn’t have life insurance then just like any other debt her next of kin (her husband or children most likely at the time) would have to repay the debt to Interscope. Basically the money they give her in each contract is essentially a loan to make the album and it’s campaign actually happen, like if you get a mortgage to buy a house, and she has to repay it in revenue and profits from her music, tours and brand deals every album cycle. And she gets a cut of the profits, but basically no more than 22% I think before tax.

And they own her masters so any song that she produces whilst in pre-production of her album Interscope owns and can decide if she can release it or not. She can suggest and pitch it but Interscope ultimately gets the final say on her tracklist content and length.

[DontCallMeAlice 1,577]

3 hours ago, gagzus said:

And they own her masters so any song that she produces whilst in pre-production of her album Interscope owns and can decide if she can release it or not. She can suggest and pitch it but Interscope ultimately gets the final say on her tracklist content and length.

I wish she owned her masters... Could she buy them to Interscope if she wanted to? 

[numb the flame 7,319]

What does it mean for Gaga because she doesn't own her own masters?

[auburn 1,072]

On 5/17/2020 at 11:47 PM, justhislife said:

Interscope must then release the album within 60 days of receiving this request and this period is referred to as "the Cure period" (8.06a).

So this is what The Cure is really about

[ToxicHot 6,438]

Wow, what an interesting read! Thank you for taking the time to write it out.  

[ToxicHot 6,438]

13 hours ago, gagzus said:

The life insurance is because she is an investment and if they invest money in her and she were to die mid-album cycle they are entitled to compensation for their investment not being fulfilled, if she didn’t have life insurance then just like any other debt her next of kin (her husband or children most likely at the time) would have to repay the debt to Interscope. Basically the money they give her in each contract is essentially a loan to make the album and it’s campaign actually happen, like if you get a mortgage to buy a house, and she has to repay it in revenue and profits from her music, tours and brand deals every album cycle. And she gets a cut of the profits, but basically no more than 22% I think before tax.

And they own her masters so any song that she produces whilst in pre-production of her album Interscope owns and can decide if she can release it or not. She can suggest and pitch it but Interscope ultimately gets the final say on her tracklist content and length.

This left me shook! Lol, thanks for explaining. I was wondering why they would have her life insurance, like idk why but it made me gasp when I read that. 

[Supersonic 49,376]

17 hours ago, Economy said:

I find it interesting how the 3rd album (if they count TFM as an album that means they mean Born This Way) got such a massive increase in fund budget

 

Perhaps the $575,000 to just over $1M contract was made at a time they didn't anticipate Gaga to become so huge hence the surge to $14,000,000

I think that assumption is correct and I also think that the huge success of The Monster Ball was a contributing factor of the huge budget increase. Not every debut arena tour of a new recording artist grosses $250,000,000. Interscope basically hit the jackpot: she sold albums like hotcakes, she sold singles like hotcakes, radio loved her (at that point) and her tour tickets sold like hotcakes AND she was critically lauded for her live vocal abilities and showmanship.

Even her least commercially successful album so far (ARTPOP) spawned an $83,000,000 grossing tour.

[TortureMeOnReplay 5,880]

10 hours ago, grigioboi said:

I wish she owned her masters... Could she buy them to Interscope if she wanted to? 

They would have to make a separate deal, but there's nothing in her contract that would give her the right to.

55 minutes ago, spamuelbtanner said:

What does it mean for Gaga because she doesn't own her own masters?

Interscope owns her songs, even if she left them.