360 Percentages That Never Sunset - Traps & Scams Every Musician Must Avoid

Welcome to the music business jungle. This article is your machete, headlamp, and a shot of espresso. If you are a songwriter, producer, performer, or band who ever got offered an advance with a friendly smile and a clause that takes from your merch, your tour, your syncs, and your soul, then this is written for you. We will break apart 360 deals, the sneaky percentages that can follow you forever, the red flags that your future lawyer will smirk at, and the real moves you can make to keep your bank account and your creativity intact.

Everything below is written in plain language with real life scenarios. When we toss an acronym like PRO we will explain what that is and we will give you examples you can use in negotiations. Read this like you are reading terms before you sign. Because if you sign without knowing, you will be crying into your merch inventory table later.

What a 360 Deal Actually Is

A 360 deal lets a label or investor take a percentage of many revenue streams beyond record sales. Typical streams are recorded music sales, streaming, touring, merchandise, endorsements, publishing, sync licensing, and sometimes even brand related income. Labels pitch this as partnership. The reality is often less romantic. It can mean they finance you and in return they own a slice of everything until the contract says otherwise or forever.

Phrase to memorize: a 360 deal is not a record contract only. It is a claim on your career. If the contract has no sunset clause or a weak one, the claim can last a very long time.

Why labels want 360 percentages

• Recorded music revenue is smaller now than in the past. Labels want other income pools to justify their investment.
• One stop monetization simplifies accounting for them. They prefer to collect from every source and distribute your share later.
• Labels use these percentages to reduce their financial risk and increase upside. If you blow up they want a piece of everything.

That sounds fair if they truly push your career. It gets unfair when they take percentages for passive income or when the cuts are forever. We will show you how to avoid the latter.

Key Terms You Must Understand

Contracts are a dictionary test. If you do not know these terms you are signing blind. We will explain each like we are sitting on a couch with cheap pizza and raw nerves.

Master rights

The master is the recorded audio file. Whoever owns the master controls the exploitation of that recording. Owning masters means you can license songs to ads and films for sync fees, sell the master outright, or control release windows. If the label owns the masters and the deal gives them perpetual 360 take, expect stickers on every income stream that touches that recording.

Publishing

Publishing is the ownership of the underlying song composition, not the recorded performance. When someone covers your song, uses lyrics in a commercial, or streams your composition, publishing royalties are due. Publishing revenue includes performance royalties, mechanical royalties, and syncing fees. Do not sign away publishing unless you are getting life changing money and a clear path to recoup rights.

PRO

PRO stands for Performing Rights Organization. These are groups like ASCAP, BMI, and SESAC in the United States. They collect performance royalties when songs are played on radio, live venues, TV, and streaming services. This money is for songwriters and publishers. If your publisher is the label or some entity taking a slice, your PRO checks might be smaller.

Mechanical royalties

These are payments for the reproduction of your song, such as when a stream or download happens. In the United States, mechanical royalties are collected partly by the Mechanical Licensing Collective abbreviated as MLC for digital audio mechanicals. Knowing who collects and who gets the cut matters when labels try to take a mechanical admin fee.

Recoupment

Recoupment means the label advances money or pays expenses, then recovers that cost from your future earnings. Recoupable expenses can be marketing, tour support, video budgets, and more. The danger is when everything is recoupable and no clear cap exists. You can owe for years even if you are the one selling out shows.

Sunset clause

This is the jewel. A sunset clause is the contract language that reduces or ends the label or partner share after a defined period or number of records. If a deal never sunsets, their cut might live on until the end of time or until they decide to renegotiate. Always insist on a fair sunset clause.

Common 360 Traps and Scams

Here are the vultures disguised as business partners that catch talent who did not read past the signature line.

Trap 1: The perpetual take

Label takes 25 percent of touring income, forever. You tour, sell merch, and the label gets a cut on every T shirt because the contract says they have a 360 percentage on all artist income and there is no sunset clause. You might think this only happens to rookies. It happens to acts who need fast money and are told the label will secure better promoters. Real world scenario. A band accepts a 30k advance and signs a deal. After a year of regional touring they are bringing in 50k from touring. The label claims its 15 percent cut plus recoupable tour support expenses. The band discovers the label treats merchandise profits as income subject to a manufacturing recoupment. Now the band must pay for T shirt printing, shipping, and the label takes another slice. That is how a small advance turns into a lifetime tax on your grind.

Trap 2: Cross collateralization without transparency

Cross collateralization allows the label to apply income from one project to recoup costs from another. Example. Your label spends 100k on record A. Record A flops. Record B blows up. Instead of you collecting on record B, the label uses B revenue to recoup losses from A. That is legal if you signed it. Very unfair if you were told each project will be accounted separately. Ask for separately accounted releases and limits on cross collateralization.

Trap 3: Publishing buyout disguised as administraton

Labels or third parties may offer a publishing administration deal. An administration deal means you keep ownership and they handle collection for a fee. A buyout means you sell publishing rights outright for a lump sum and you lose future income. Some contracts advertise administration but in the fine print they claim ownership or grant exclusive rights for decades. Real example. You sign what you think is a 10 percent admin fee with a five year term. The contract states that the admin has the right to sub license and will be assigned ownership if certain revenue triggers happen. Read every clause that references ownership, assign, transfer, or forever.

Trap 4: Live income carve outs that are thinly described

Labels know touring is where many artists make real money. So they insert vague language taking a piece of live income for services that may never materialize. The label will claim they are majorly promoting your tour or tying you to a booking agent. Then the service is ghost level. Demand lists of concrete services and a clear compensation schedule. If the label is not selling shows for you expect to keep that income.

Trap 5: Agent and manager fee stacking

You sign a 360 deal that takes a piece of sponsorships. You then sign a manager who takes 20 percent. You hire an agent who takes 10 percent. The brand pays 100k for a sponsorship. After labels, managers, and agents receive their percentages, you get a fraction. Make sure your contract defines the order of payouts and whether the label takes its 360 cut before or after the manager and agent fees. Ideally the label takes its cut from gross only if they provided the service and are not double dipping on services your manager provided.

Red Flags to Watch For in Contracts

If you see any of these phrases or setups, pause and call someone who has seen hundreds of pages of legalese and does not think your art is a vibe. Here are the red flags explained in normal speak.

• Language that grants rights and does not set an end date. This often means forever unless otherwise stated.
• Recoupable costs listed without limits or without specific caps. They can charge for stuff you never approved.
• Blanket 360 percentages on all income without carve outs for songwriting or publishing. This is a sign they want a claim on passive income like performance royalties.
• Cross collateralization that applies across all recording, publishing, and touring income. That is how they use your hit to clean up their losses.
• Vague promise to provide services such as tour support, promotion, or brand introductions with no performance targets. A promise that is not measurable is worthless.

Real Life Horror Stories You Can Learn From

These are condensed versions of things that happen to real artists who thought the label handshake was enough.

The merch trap

A band signs for a moderate advance and agrees to label 360 percentages on merch because the label says they will open direct to fan channels and handle fulfillment. After the release the band sells merch at shows and online. The label uses their logistics vendor and charges fulfillment fees plus keeps a slice. When the band tries to switch to a cheaper merch vendor the label blocks the move citing exclusive merchandising rights. Total effect. Revenue drops for the band and costs climb. If they had carved out live merch or capped label fees the band would have kept much of the income.

The publishing buyout that was not a buyout

An artist thought they signed an admin deal with a 12 percent fee. Years later an investor claimed ownership of the compositions because of a clause triggered by a reissue. The artist had unknowingly granted an exclusive license for mechanical and performance rights for 30 years. That license was then treated like ownership by a buyer. Moral. Put explicit reversion language in every publishing agreement.

The never ending commission

A rapper signed with a management company that agreed to 18 percent. The management deal included a clause that lasted for the artist's lifetime for any venture that started during the contract term. Years later the artist founded a clothing company that became valuable. The manager took a cut citing that lifetime clause. Always limit management term to a fixed period and clearly define the business activities that are covered.

Negotiate Like You Have Self Respect

Negotiation is not only for people with lawyers. It is for humans who value their future. Here are strategies and phrases you can use to protect yourself. Use them on a first read meeting or in an email. They show you know your stuff and give you leverage.

Ask for a real sunset clause

Sample phrasing to request. I want a sunset clause where the label share reduces by five percent per year after the initial contract term and ends completely after ten years from the date of first commercial release of the last album under this agreement. If you prefer a unit based reduction suggest a clear threshold like two million units sold equals X percent reduction. The key is measurable metrics. Labels will counter. Be firm and ask for a cap.

Carve out publishing

Say this. Publishing is excluded from the 360 percentages. I retain 100 percent ownership of the songwriter share and publishing rights unless a separate written agreement is negotiated. Labels might offer co publishing instead. If they do, limit the term and include reversion options.

No cross collateralization across publishing and touring

Phrase. Recoupment for recording costs will be applied only against recorded music revenue as described in Schedule A and will not be cross collateralized against touring, merchandise, publishing, or third party endorsements. You want to keep successful things separate so a flop in one area does not drain all your revenue.

Cap recoupable expenses

Say this. We will define recording and promotion expenses with an itemized and pre approved budget. Any additional expenses will require my written approval. List maximum dollar amounts per line item. Labels may resist but you can trade flexibility for better rates or higher advances.

Limit exclusive merchandising rights

Ask for the right to sell merch at live shows and via third party channels free of label claim, with label retaining a right of first refusal on online merchandising deals. This prevents the label from controlling your merch at the merch table.

What You Can Sign Instead

You do not always need a full 360 label relationship. Here are safer options and short descriptions so you can choose a path that fits your career plan.

Distribution deal

Distribution deals place a percentage of recorded music revenue with the distributor while you keep other rights like publishing and merch. Many independent artists take distribution deals to maintain ownership. Distribution fees tend to be smaller than full label deals and are limited to recording income.

Licensing deal

You license a master for a limited time or for a single campaign. This means you keep ownership and grant controlled rights. Licensing is great when you want label assets for specific releases without giving them everything.

Promotion and marketing deals

These are service agreements where a company provides defined services for a fee. You pay for what you get and keep rights. Avoid open ended arrangements where the service provider asks for a share of future income without clear deliverables.

Co investment deal

A partner invests in a specific project in exchange for a share of profits from that project only. This keeps liabilities isolated and preserves future earnings from separate projects.

Practical Checklist Before Signing Anything

1. Read the entire document from page one to the end note. Do not rely on summaries or verbal pitches.
2. Highlight any clause that grants rights without time limits. Ask for specific end dates.
3. Find the definition of recoupable expenses. If it is broad, demand line items and caps.
4. Look for cross collateralization language and ask to limit it.
5. Confirm who collects publishing performance royalties and who is the publisher. If label is publisher, ask why and what the split is.
6. Check for lifetime management style clauses in any deal involving management or investment. Limit them to a fixed term and activities covered.
7. Request audit rights with a defined window. You should be able to audit accounts within a reasonable period and without onerous cost.
8. Get a lawyer who has represented artists not just labels. A lawyer that has once been on both sides can be helpful but make sure their bread is not rising more from label clients.

Negotiation Phrases That Sound Tough But Polite

Copy paste these into your email when you need to push back and sound like you know the grammar of deals.

• I am happy to discuss a 360 arrangement if the term is strictly limited to the initial album cycle and sunsets completely after three years from commercial release. Please propose language that defines the sunset schedule.
• All recoupable costs must be pre approved in the attached budget schedule. Unapproved costs will not be deemed recoupable.
• Publishing income and writer shares are excluded from the 360 percentage. If you propose a co publishing split we will need reversion language and a maximum initial term of five years.
• Cross collateralization will be limited to recorded music revenue only. Touring and merchandising will be accounted separately.
• I require quarterly statements and the right to audit with an independent auditor at label cost if discrepancies exceed three percent.

How Much Is Reasonable for Different Services

Because you are wondering what numbers make sense, here is a brutally honest guide. It depends on context and leverage but these are ballpark figures that help you make smarter offers.

• Manager commission. Typical 15 percent to 20 percent of gross artist income. If your manager is also an investor ask for a clear repayment schedule for any money they front.
• Agent commission. Standard 10 percent to 15 percent of live performance income only. They should not take publishing or merchandise unless they negotiated the deal.
• Label share of recorded music. For full service label deals 50 percent to 85 percent of net receipts for recorded music is common after recoupment. Independent deals can give you upwards of 80 percent of net.
• Distribution fee. Typically 10 percent to 30 percent of net recorded music income. Services that only distribute usually do not touch touring or merch.
• Publishing admin fee. Around 10 percent to 15 percent is normal for administration services. Anything above 20 percent is suspicious. Full publishing buyouts require heavy compensation and very clear terms.
• 360 cut on touring or merch. If a label insists on a 360 percentage for touring 5 percent to 10 percent with clear performance obligations is reasonable. Anything above 15 percent with no demonstrated service is a red flag.

Action Plan You Can Use Today

1. Do not sign the first version of any contract. Even friendly offers can hide forever clauses.
2. Ask for the document to be sent electronically so you can read it slowly and search for key words like sunset, recoup, cross collateral, assignment, administration, transfer, and exclusive.
3. Highlight anything that grants ownership without a clear end date. Ask for reversion language.
4. Get a referral for an entertainment lawyer who represents artists. If you cannot afford full representation hire an attorney for a contract review only. That cost is an investment not a luxury.
5. Negotiate specific services that the label promises and attach deliverable milestones. If they cannot promise anything specific for a 360 cut they should not get it.
6. Keep copies of all communications. If the label promises something in an email make sure it is added to the contract as an amendment.

Frequently Asked Questions

What is the worst thing a 360 clause can do

Worst case is a perpetual claim on all revenue streams with broad recoupment and cross collateralization. Combined that can starve an artist of income even after they are successful. Make sure any 360 claim has time limits, revenue carve outs, and transparent accounting. Your bank account needs sunlight. Contracts that keep everything dark until you die are not friendship deals.

Can I negotiate a 360 deal if I need the advance

Yes you can but negotiate for trade offs. Ask for a smaller 360 percentage, a strict sunset, caps on recoupable costs, and performance targets. You can also accept a loan instead of a percentage if you can handle repayment terms that are fair. Never accept forever without clear compensation and protections.

Are managers entitled to a cut of everything

Managers normally take 15 percent to 20 percent of artist gross income. That can include recorded music, live, and sponsorships. But you can negotiate what is included. Some managers accept only recorded music and touring. Others want everything. Limit the term and specify business activities covered to avoid lifetime claims on new ventures.

What is an administration deal versus a publishing buyout

An administration deal means you keep ownership of the composition and you give a third party the right to collect and administer your publishing for a fee, often around 10 percent to 15 percent. A buyout means selling some or all of the publishing ownership for a lump sum. Administration is usually safer for writers who want long term income. Buyouts can give immediate cash but sacrifice future revenue.

How do I ensure my masters revert to me

Negotiate reversion language that returns masters to you after a set period or after certain revenue thresholds. For example say that masters revert to the artist after ten years or after the label recoups its advance and a defined return multiple. Make the period clear and require written notice. If the label refuses to discuss reversion think twice about signing away forever.

Can a label claim publishing and performance royalties

They can if you sign it. Protect yourself by excluding publishing from the 360 split or by defining a co publishing deal with short term and reversion rights. Performance royalties collected by PROs belong to songwriters and publishers. If the label claims publisher status make sure you understand the split and the admin fee. Small admin fees are normal. Publisher ownership requires careful consideration.

Get Contact Details of Music Industry Gatekeepers

Looking for an A&R, Manager or Record Label to skyrocket your music career?

Don’t wait to be discovered, take full control of your music career. Get access to the contact details of the gatekeepers of the music industry. We're talking email addresses, contact numbers, social media...

Packed with contact details for over 3,000 of the top Music Managers, A&Rs, Booking Agents & Record Label Executives.

Get exclusive access today, take control of your music journey and skyrocket your music career.

Unlock Instant Access