A 360 deal is a record contract where the label takes a cut of your gigs, merch, publishing and other income, not just your records and streams. It’s called 360 because it reaches into everything you earn. Before you sign one, run the offer through the record deal calculator to see what you’d actually keep.
How a 360 deal works
In a standard record deal, the label pays for recording and marketing, keeps the money from your records and pays you a royalty. In the UK, the average royalty in new major-label deals was 23.3% in 2021, according to the competition regulator, the CMA.
A 360 deal keeps that and adds a share of your other income. That can include:
- live shows and touring
- merch
- songwriting and publishing
- sponsorship, brand deals and appearances
Some 360 clauses are active: the label actually runs that part of your business, like making and selling your merch. Others are passive: the label just takes a percentage of money other people earn for you. Passive cuts are the ones to push back on hardest.
What it can look like: Megan Thee Stallion
In 2020, Megan Thee Stallion sued her first label, 1501 Certified Entertainment. Her lawsuit claimed the contract gave the label 60% of her recording income and all of her touring money, in return for a $10,000 advance.
These were her claims, not a court’s findings. The label’s boss, Carl Crawford, told Billboard “nothing is true that she said”. But it shows how far a contract signed early in a career can reach once you start earning.
When the money doesn’t come back
The other risk is debt. Labels pay themselves back from your royalties before you get anything, which is called recoupment. Kreayshawn said in 2020 that she earns $0 from her hit “Gucci Gucci” and is $800,000 in debt to Sony.
TLC filed for bankruptcy in 1995 owing about $3.5 million, despite huge hits. CBS News put it down to poorly structured recording contracts. Neither case was described as a 360 deal, but add a cut of your gigs and merch on top and there’s even less left for you.
What to ask before you sign
- Which income streams, and what percentage of each? Get every one written down.
- Gross or net? A cut of gross touring income comes off the top, before you’ve paid the band, crew and van. Tours often run at a loss, as how much artists make on tour shows.
- What does the label do for it? If it takes a share of your merch, does it make and sell the merch?
- Does it count towards recoupment? If the label’s share of your tour money doesn’t reduce your balance, it can earn from you while you stay in debt.
- When does it end? Check whether the cut stops when the deal ends or keeps going on old work.
Get a music lawyer to read it. That’s not optional with a 360.
Do you even need one?
A 360 deal makes sense if the label is putting serious money and work into your whole career. If you mainly need your music in shops and on streaming services, a distributor does that without touching your gigs or merch. Compare what it costs in the music distribution calculator.
Next step
Put the advance, royalty rate and costs into the record deal calculator to see how long it would take to start earning. Then read up on the rest of our music royalties and pay guides before any label meeting.
Where these figures come from
- UK CMA: music streaming market study final report (29 Nov 2022)
- XXL: Megan Thee Stallion sues her record label (2 Mar 2020)
- The Fader: Megan Thee Stallion’s label boss responds to her lawsuit (4 Mar 2020)
- Digital Music News: Kreayshawn says she’s broke (22 Jul 2020)
- CBS News: TLC’s enduring legacy (5 Jun 2023)
