Unpaid Royalties is a series about the myriad ways that the music industry exploits Black artists—and what's being done to change them. Read more here.
Three years before Little Richard signed the record deal that would change his life, his father was murdered. Richard had 12 brothers and sisters, and as the eldest boy who wasn't off fighting in the Korean War, it fell on him to provide for his siblings and his mother. He was 19 years old.
He found work washing dishes at a Greyhound bus station in his hometown of Macon, Georgia, and scrounged up extra cash playing shows at hole-in-the-wall clubs throughout the Southeast. But no matter how many dishes he washed, no matter how many shows he played, he couldn't earn enough money to support his family.
"You know you're poor when you have to make a fire and you ain't got no wood," Richard later told his biographer. "I've seen people pull wood off their houses to make a fire in the house. That's poor. And I was one of the people pulling wood off the house."
His only hope, he thought, was to make a hit song, and he was desperate for a chance to record. He sent a demo to Specialty Records—one of the few labels working with Black artists in the early 1950s—and called them nearly every week for a year, begging them for studio time. In 1955, the label finally relented. Richard recorded five songs, four of which most people have never heard of. But one would go on to change the course of music history, laying the foundation for what later became known as rock 'n' roll: "Tutti Frutti."
A week and a half after it was released, "Tutti Frutti" had sold 200,000 copies; by 1968, it had sold more than 3 million, and Little Richard had become a superstar. Over the years, the song made millions of dollars for Specialty's owner, a white man named Art Rupe—but Richard received only a fraction of the proceeds. Rupe bought "Tutti Frutti" for $50, and paid Richard half a cent for every copy it sold. According to Richard's biographer, an unknown white artist in those days typically made ten times that much.
"If you wanted to record, you signed on their terms or you didn't record," Richard later told his biographer. "It didn't matter how many records you sold if you were Black…. The very thought of it is sickening to me now. [Art Rupe] made millions and he should owe me millions."
Fast forward 65 years, and that kind of egregious exploitation of a Black artist might seem unthinkable. But according to Black label executives, entertainment attorneys, and music business professors who spoke with VICE, not much has changed. All too often, major labels prey on young, poor Black artists, offering them lopsided record deals in which the company owns their music in perpetuity. In exchange, they're given cash advances that account for a fraction of what their music will ultimately bring in, and a minuscule percentage of the royalties their music earns.
"If you go back to the 50s, it's the exact same character sketch today: African-American, poor, looking for a way out of their circumstances, and using their talent as a way out," said Eric Holt, an assistant professor of music business at Belmont. "That is easy to exploit: 'Let's give them a little bit, and they don't even know the value of what they're selling us for this little bit.'"
Vince Phillips—an entertainment attorney with more than two decades of experience in hip-hop, who's represented Lil Baby, Kevin Gates, NBA YoungBoy, and Lil Keed—said he's witnessed that kind of exploitation firsthand. If a major label knows a Black artist needs to earn money quickly, Phillips said, they'll use that knowledge to pressure them into signing a bad contract.
"Sometimes artists are in situations where they have to take a deal," Phillips said. "If you are in a really bad, really desperate situation, and there is money there, and there is opportunity, and you need to get out of a particular circumstance, [labels] will say, 'Look, we don't know if this guy's even going to be around. We're taking a bigger risk because he's got these court matters coming, or we're taking a bigger risk because of this or that.' They're looking at the lifestyle and using that as the basis to say, 'This is a take-it-or-leave-it moment.' And many times an artist might say, 'I need this. Let's just go.'"
Black artists aren't the only ones who get trapped in inequitable deals, and it's certainly possible for a label to take advantage of a poor, under-resourced white artist in the same way. But according to Tonya Butler, a former entertainment attorney and label executive and the current chair of Berklee's music business program, it's much more common for a Black artist to get locked into a bad deal than a white one.
"Anybody can get a bad deal—but because of the inequities in education, and the economic disparity that exists, Black artists and brown artists are more susceptible to getting a bad deal," Butler said. "They often come from low-income circumstances, and they lack the necessary education and resources to find out more. I liken it to COVID: Everybody can get it, but Black and brown people are affected more intensely than others because of systemic inequities."
What a bad deal looks like has changed since Little Richard's era; where the abuses of the past were flagrant, these days, they're buried in lengthy contracts, hidden in legal language the average person would find impossible to understand. To negotiate a good deal with a major label, an artist needs to retain a sharp, experienced attorney. But according to Chuck Wilson, the founder and CEO of the independent hip-hop label Babygrande, Black artists don't tend to secure great representation—at least not at the rate their white counterparts do. They may not have the money to hire a stellar music attorney, the connections to find one, or, as is the case for many young and inexperienced artists, the wherewithal to know they need to seek one out to begin with.
"When you walk in the door, who's your team? As an artist, what access did you have to the best and brightest around you? That's the systemic part," Wilson said. "I've signed many white artists. These guys walk in the door with bell-ringing names. And then [for] a Black artist with minimal resources, it can range from a local family law person saying 'I'll read that for you' to lower-caliber lawyers."
If artists sign a contract without proper representation, there's no limit to how badly a label can rip them off, and there's no single, set example of what a bad deal looks like. But arguably the most exploitative agreement an artist can sign—and one Black artists often find themselves trapped in, according to the industry veterans who spoke to VICE—is a royalty deal tilted far in a major label's favor.
"So much of what we see in the record industry today came from the 50s.”
On the most basic level, under these agreements, any original master recordings you produce while under that contract are owned by your label in perpetuity—something that hasn't changed since Little Richard's heyday. In exchange for your masters, the label gives you a cash advance, part of which goes straight into your bank account, and part of which covers the cost of recording. Once your music is released, you begin the process of paying that advance back. You do that with the earnings from your releases—but you're only entitled to a percentage of those earnings, at a royalty rate set by the label.
Let's say a label gives you a $1 million advance to make an album, and a 10 percent royalty rate on your masters. Once your album has generated $1 million, whether that's through streams or sales, only 10 percent of that—$100,000—is yours, and it goes directly towards paying back your advance. Your album would have to net $10 million before you've managed to pay back your advance. Then, and only then, will you begin to see royalty money hit your bank account.
To Butler, the concept of a label owning your masters in perpetuity is fundamentally flawed.
"Technically, the label is owning something that you paid for," Butler said. "In how many industries do you pay for something that you don't own? Only music. When my bank loans me money to buy a house, they own the house—but once I pay them back, I own the house. That does not happen in music. Once you pay the label back, they still own it."
Low-rate royalty deals are bad enough on their own. But hard-to-spot, confusingly phrased stipulations in record contracts can make them even more egregious than they appear at first blush. In some cases, labels will carve out "deductions" on royalties based on a variety of factors, from the format by which your music is consumed to the territory where it's accessed. For example: A small sub-paragraph on page 43 of a contract might state that for all proceeds generated in Europe, an artist is only entitled to 70 percent of their "agreed-upon" royalty rate. If an artist's royalty rate is set at 10 percent, in the case of that deduction, it might quietly drop down to 7 percent for a large share of their earnings. That's just one of countless subtle, hidden provisions that might be tucked into a bad contract, Butler said.
"So much of what we see in the record industry today came from the 50s, and it is very standard language," Butler said. "They still include things like packaging deductions, where they take a deduction for packaging up the CD. They're not even releasing your music on CD anymore! Or they'll hold some of your royalties just in case there are returns from the store. There aren't any returns, because there aren't any CDs! So why are you still holding my royalties?"
There's no question that whether through predatory dealmaking, blatantly unfair contracts, or hidden clauses, Black artists are exploited by major labels. But it's difficult to say for certain that they're taken advantage of more frequently than their white counterparts. To prove that, we'd need evidence, and to get that evidence, we'd need to see contracts—but major label contracts are kept confidential. As long as labels refuse to make them public, the alleged discrimination at the heart of the music industry remains just that: alleged.
"That evidence is impossible to get to," Wilson said. "Why? Because all of the lawyers at the labels are under confidentiality agreements. All those deals are sealed under wraps, and no one can do a proper analysis or historical trace on 'What was AC/DC getting at the same time Run D.M.C. was poppin'?' We don't know. That analysis has never been done."
"We can say that because of systemic reasons, Black artists are getting worse deals—but we need to be able to see the extent to which that is true.”
Without access to contracts, the only window we have into how record companies may be exploiting Black artists today comes when those artists publicly air their frustrations with their labels. During a 2017 appearance on The Breakfast Club, Tyga claimed that his former label, Cash Money, swindled him out of $12 million by supplying him with the same lawyer that was representing the record company. Back in March, Megan Thee Stallion sued her label, 1501 Certified Entertainment, claiming that after locking her into an unfair contract when she was 20 years old, the company has refused to renegotiate it. Lil Uzi Vert, Rich Homie Quan, Mase, and countless other Black artists have cried foul about what they say are exploitative deals—but because we can't dissect their contracts, there's no way to confirm those allegations for sure.
According to Butler, the Black Music Action Coalition (BMAC)—formed in June to address systemic inequality in the music industry—is working to get its hands on as many major-label record contracts as it can. From there, BMAC can begin to compile data on contract discrepancies between Black and white artists, diagnosing any inequities that might exist and pinpointing ways to address them. But until that happens, any solutions aimed at giving Black artists a fairer shake when it comes to major label deals would all be based on guesswork.
"We can say that because of systemic reasons, Black artists are getting worse deals—but we need to be able to see the extent to which that is true," Butler said. "Only data will provide that information. Without real data, we're just speculating, and that's why we can't pinpoint a response, or an answer, or a solution. It's buried in the true cause."
Butler, Wilson, Holt, and Phillips all agreed that Black artists are better positioned in the music industry now than ever before. Hip-hop is the most popular genre in America, and Black artists dominate it. Social media and music distribution platforms like SoundCloud have eliminated barriers to entry that were once insurmountable, allowing musicians to build a following and release their music without a record company's help. And information—on what a bad record deal looks like, or who the top lawyers in the music business are, or whether it's better to sign with an indie or a major—is readily available to anyone who seeks it. Black artists have leverage. The problem, Butler said, is that sometimes, they don't know how to use it.
"I see artists today as having power, but not recognizing their power," Butler said. "You don't recognize that you do have the power to negotiate, or the power that everyone has, which is just to say no, and to walk away and do it on your own. Little Richard couldn't walk away and do it on his own. And if you don't recognize your power, you may as well be Little Richard."
Later in life, Richard sued Art Rupe and Specialty Records, seeking upwards of $100 million for what he claimed were decades worth of unpaid royalties. The lawsuit was ultimately settled out of court for an undisclosed amount. He spent his final years in Tennessee, living at the Hilton in downtown Nashville with his adopted son, Danny Penniman. The two of them were close; over the years, Penniman told Rolling Stone, his father had spoken often about how badly he'd been ripped off by Specialty, and how bitter he was that—despite his wild success—he'd never been paid the money he was due. But by the time he died in May of 2020, Penniman said, Richard had resigned himself to the fact that he would never get what he was owed.
"He came to the reality of what it was: That’s his life," Penniman said. "In the later years, he was at peace with it.”
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