Major Labels Are Donating Millions for Racial Justice. That Isn't Enough

We spoke to heads of independent, Black-owned labels about how the big three need to rethink their business models to actually address racial injustice.
Drew Schwartz
Brooklyn, US
June 10, 2020, 7:30pm
Fly Anakin and Chuck Wilson
Photo of Fly Anakin by Jax Teller; photo of Chuck Wilson courtesy of Babygrande

On Black Out Tuesday, the "big three" major record labels—Warner, Sony, and Universal—all put out canned, nearly identical statements about the initiative on social media. Give or take a word or two, each company declared that it was proud to "stand with the Black community" and would be taking the day to "reflect." None of them actually donated to organizations fighting for racial justice. Days later, facing public uproar and pressure from high-profile artists, the labels finally pledged to contribute. Warner and Sony have committed to donating $100 million a piece, and Universal has promised to give $25 million. That’s a lot of money—but in the eyes of Black independent label owners, the majors still aren’t doing nearly enough.

"When you have these larger outlets of power finally making big changes—like, a huge step in the right direction on our level—for them, it's still a drop in the bucket. $100 million for them is not a lot of money," Joshua Virtue, who co-runs the Chicago hip-hop label Why? Records, told VICE.

Warner Music, which just went public, is valued at roughly $15 billion. Sony and Universal are both valued at roughly $33 billion. Respectively, their pledged donations amount to about .6, .3, and .07 percent of their total worth. None of them have set a timeline for how many years they’ll take to disburse those funds in full, and Warner and Sony haven't specified which organizations they’ll support (though Universal has). $100-million donations make for splashy headlines—but considering the inconceivable wealth of these companies, who’ve built their fortunes on the backs of Black musicians without giving them a fair share of the profits, for Virtue, those donations ring hollow.

"As far as I'm concerned, nothing's ever really gonna be enough until we are in control of our money, and we are in control of our art as Black people in this country," Virtue said.

Under a typical major label contract, artists don’t own the rights to their music, and only receive a fraction of the proceeds from their work. In return, they’re given distribution support and big advances—but those advances are often less cushy than they seem. To name just one example: In 2014, Unlocking the Truth, a Brooklyn metal band whose members are Black, signed a $1.8 million deal with Sony. While that might sound like a windfall, the actual terms of the deal were horrendous. The three-piece band was given a $60,000 advance on their first record. They were required to sell 250,000 copies—a virtual impossibility—to secure a $60,000 advance to make their second. To hit that $1.8 million figure, they’d have to make six blockbuster records over the course of an untold number of years. Ultimately, they wound up in debt to Sony, and had to fight their way out of the contract. Stories like theirs are disturbingly common, and have been for decades, especially among Black artists.

When Sony unveiled its $100 million fund in the wake of Black Out Tuesday, the company made no mention of retooling its contracts to be more equitable to Black artists. Neither did Warner or Universal.

"It shouldn't be difficult to own what you create," Fly Anakin, who co-runs the Richmond hip-hop label Mutant Academy, told VICE. "Make it easier to be partners versus owning us… Versus treating us like your fucking cattle."

Internally, the major labels are plagued by a lack of Black representation, from A&R departments up to the executive board. While none of the big three provide statistics on the racial makeup of their workforces, a look at Billboard’s "Power 100" list—an annual ranking of those with influence in the music industry, dominated year after year by white men—gives you a sense of just how few Black people make it to the upper echelons of major labels. Even when they do, roles for Black executives are often limited to major labels' "urban" departments, a designation with its own set of racist issues.

"I would rather that these large institutions be dismantled than reformed." — Joshua Virtue

Sony, Warner, and Universal all pledged to set up panels and task forces to address diversity and inclusion—but research shows those initiatives often don't actually lead to change, and the labels haven’t promised to hire more Black workers or appoint more Black executives. To Chuck Wilson, the CEO of New York independent hip-hop label Babygrande, that’s particularly galling considering that hip-hop has been the most popular genre in America since 2017.

"These organizations rarely, rarely have a level of diversity that is anywhere near commensurate with even the total population of the United States—let alone a ratio that is commensurate with the impact that African American music has had culturally and economically," Wilson told VICE. "And they're profiting like crazy off of Black music. That needs to be fixed."

The lack of Black representation at the majors has wide-ranging effects, Wilson said. For one, the big three have a history of "just dropping a big bag in the lap" of Black hip-hop artists who come from low-income backgrounds and "hoping it's going to work out well." They don’t train them on how to manage that money; they don’t provide them with security teams to make sure that money doesn’t get them hurt or, in a worst-case scenario, killed. Pop Smoke and Juice WRLD were both signed to subsidiaries of Universal. Wilson thinks the label should’ve done more to protect them.

"You have this huge check coming in. Your life's gonna change instantly. Who's there to advise you on how to manage those life changes—the totality of them? Who’s the person that understands not only the streets, but the music business?" Wilson said. "When you get to the corporate level, where it's about quarterly revenues and putting up numbers so you can keep your job as CEO, and how many number ones did you get, those things get lost in the shuffle. And we end up with artists that are overdosing and dying, of all races. We end up with artists that are put in violent situations."

Another issue rooted in a lack of diversity at the majors, Wilson said, is that mainstream hip-hop has "veered off course" over the past decade: The big three sign artists who rap about guns, drugs, and money, and box out artists who make music about other dimensions of the Black experience.

"There's way more to African Americans as a people than just street life. So where's the balance?" Wilson said. "There's a responsibility on the part of labels to seek that balance. If you're making hundreds of millions of dollars, if not billions, pumping out music about doing drugs and selling drugs and gang life, and you don't have any artists at all that are talking about other ways of life, something is wrong."

Hiring Black employees and executives alone won’t solve that problem, Wilson said. Labels need to invest in a diverse range of artists, even if "they don't make money, or they don't make money quickly." They need to provide room in their budgets to allow for Black artists who aren’t overnight successes.

"You can't just hire Black people and put the same pressures on them, these quarterly pressures to find shit that's gonna pop and get number ones every time," Wilson said. "You gotta have some women and men that are free to find new voices that serve the culture."

Wilson and Anakin are hoping that, beyond just throwing money at the issue of racial injustice, major labels rethink their entire business models, implementing sweeping changes to make their companies more equitable for Black artists and employees. But Virtue has no faith in their ability to do that.

"I would rather that these large institutions be dismantled than reformed. The larger the scale of these things, and the more they're making, the more they're ultimately just exploiting people," Virtue said. "It's kind of like talking about the police force. If we're talking about reform, that's nice, it's a step forward. But ultimately, I would prefer abolishment."

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