Negotiating a Record Deal

Negotiating a record deal can be divided into three distinct steps: contacting, approaching, and negotiating.

Contacting and Approaching

While e-mail is quick and convenient, it is much easier to talk than to type and easier to decipher reactions through verbal contact making the phone a very efficient tool. More important, e-mail, like other written communication, deprives the recipient of nonverbal cues. When you consider that experts believe as much as 90 percent of face-to-face communication is conveyed through body language and vocal cues, relying heavily on e-mail can be a bad idea.  Without direct contact, contacts can be weak, which makes it tempting to take uncooperative positions.

Negotiating

This step can be broken down into smaller guidelines: 

• Always maintain a balanced commitment – Every time you do something, you must ask your prospect to do something of equal or even greater value toward making that commitment of working with you. This way, both parties build equity and loyalty within the relationship.
• Ask directly for direction – For instance, say, What do you think we should do next? Chances are your prospect loves to issue orders.
• Never make claims that you’re uncertain about something – Use language that sounds less non-committal. For instance, instead of saying "I’m not sure," say "I’ll have to check on that and get back to you." It is much better to add a bit of uncertainty at the early stages of any business relationship.
• Never make vague and unfounded guarantees – Always get things in writing rather than a verbal agreement which might be misinterpreted. 

Factors to Consider in Negotiating a Record Deal 

• Wages – The wages you can expect from employers that have larger budgets will naturally be much greater than the compensation offered from employers with limited budgets.
• Rehearsals – Employers with larger budgets will typically compensate you for rehearsals in preparation for "phonograph" recording sessions, single live performances, and extended tours.  The amount will vary between employers.
• Per Diem – Per Diem’s are standard in the industry, and negotiating a reasonable PD is usually not too difficult.  A per diem is a daily allowance for food.
• Buy Outs – In addition to receiving a "per diem," employers with larger budgets may offer you money in something called a "buy out." A buy out occurs when the concert promoter does not fulfill his or her contractual obligation to provide food and drink backstage.
• Equipment – Musical equipment is another important factor to consider when arranging your deal with an employer. Instruments and protective travel cases may be provided via your employer’s recording and/or tour budgets.
• Equipment Endorsements – If your employer doesn’t cover the cost of these expenses, you may obtain sponsorship from a variety of equipment manufacturers if your group is already successful, or gaining additional exposure from radio play and record sales.
• Equipment Techs – The care and maintenance of your musical equipment is critical, both in the recording studio and on tour.
• Travel and Lodging – Although your employer will generally cover your travel costs and lodging, the quality of service is usually uncertain.  Employers with larger budgets may take more care in providing the best possible travel and hotel accommodations.
• Special Clothing – If specific clothing that is not "standard" or "ordinary" is required, the employer will usually reimburse you for the cost of that clothing.
• Retainers – In times of temporary unemployment, such as during a break in a tour schedule, employers with larger budgets may provide you with additional benefits such as a "retainer." A retainer enables you to maintain an income while your services are on hold.

Should I Consult a Lawyer for Guidance in Negotiating a Record Deal?

Though you can negotiate a record deal on your own, it is advisable to seek a business attorney who specializes in the art of negotiation to ensure you get the best possible record deal for your needs.