360 deal: meaning, percentages and key clauses

360 deal (multiple rights deal)

A recording contract in which the label takes a share of the artist’s income from sources beyond recorded music: live shows, merchandise, songwriting and publishing, sponsorships, endorsements and licensing. In exchange, the label usually pays a larger advance and invests more in marketing and touring. The name comes from the label taking a cut of the full circle of the artist’s career.

What does a 360 deal mean?

In a traditional record deal, the label pays for recording and marketing and earns its money from the recordings: sales, streams and licensing of the masters. Everything else the artist earns, from concerts to T-shirts, stays with the artist and their team.

A 360 deal widens that. The label still owns or controls the recordings, but it also takes a percentage of the other income streams. The industry term is a multiple rights deal, and the label’s share of non-record income is often called its ancillary income participation.

The logic from the label’s side: it spends money to make the artist famous, and fame pays off mostly outside record sales. A 360 deal lets the label recover that investment from the whole career.

Which revenue streams does a 360 deal cover?

Which streams are included is negotiated. Few deals cover everything, and established artists often keep publishing or touring out of the deal entirely.

How much does a 360 deal take?

There is no standard percentage. Industry commentary and legal analyses commonly describe label shares of roughly 10% to 35% of the artist’s net income from non-record sources, depending on the artist’s bargaining power and on how involved the label is in each stream. Treat that as an orientation range, not a market rate.

Three details matter more than the headline number:

• Net or gross. A percentage of net income (after manager, agent and production costs) is worth far less to the label than the same percentage of gross.
• Per stream. Percentages are often set separately per stream, for example a lower share of touring and a higher share of merch the label sells itself.
• Recoupment. Whether the label’s ancillary share counts towards recouping the advance changes how quickly the artist sees royalties.

Active vs passive rights

The single most important distinction in a 360 deal is whether the label holds active or passive rights in a revenue stream.

Passive participation is easier for an artist to accept. Active participation can work well if the label is genuinely good at the job, for example if it has a strong merchandise operation.

Pros and cons of a 360 deal

The most common criticism is that a label with passive rights is paid from streams it does not help to build. The most common defence is that, without the label’s spending, those streams would not exist at the scale they do.

A short history of 360 deals

360 deals spread in the 2000s, when falling CD sales cut into the income labels had built their business on. Labels looked for a share of the revenue that was still growing, above all live music.

• Robbie Williams and EMI (2002). Williams signed a deal with EMI reported at around £80 million that gave the label a share of his touring, merchandising and publishing income as well as his records. It is often cited as the first major 360 deal.
• Paramore and Fueled by Ramen / Atlantic (2005). The band signed a deal that included an interest in touring, merchandise and fan club income. A New York Times report on the trend presented the band as an example of a new model for developing talent.
• Madonna and Live Nation (2007). Madonna left Warner Music for a deal with the concert promoter Live Nation, reported at about $120 million over ten years, covering albums, touring, merchandise and licensing of her name.
• Jay-Z and Live Nation (2008). A deal reported at about $150 million over ten years gave Live Nation a stake in nearly every part of his music business.

The last two show that a 360 deal does not have to involve a record label. Any company that funds an artist can structure the deal this way, and today many label deals for new artists include some form of multiple rights clause.

Key clauses to negotiate in a 360 deal

If you are reviewing or drafting a 360 deal, these are the clauses that decide how good or bad it is:

1. Term and options. How many albums or years, and who decides whether to extend. Long option periods keep the label’s share running long after the relationship has cooled.
2. Included streams. List exactly which income streams are covered and exclude the rest explicitly. Income that existed before the deal (an existing publishing catalogue, a business the artist already owns) should normally stay out.
3. Percentages and the base. Set a percentage per stream, and define whether it applies to gross or net income and which costs may be deducted.
4. Active or passive rights. For each stream, state whether the label only takes a share or also gets the right to run it.
5. Recoupment and cross-collateralisation. Can the label recoup the recording advance from touring or merch income? Cross-collateralising all streams can delay royalties for years.
6. Label commitments. Minimum spend on marketing, tour support and release dates. A label taking a share of everything should commit to something in return.
7. Accounting and audit rights. Regular statements per stream and the right to audit the label’s books, including a deadline for objecting to a statement.
8. Reversion and termination. When rights and the label’s share end: after the term, if the label fails to release music, or after a period without activity. Sunset clauses that reduce the label’s share over time are worth asking for.
9. Approval rights. Whether the artist must approve endorsements, merch designs and licensing uses, so the brand is not used in ways the artist rejects.

Anyone signing one should have it reviewed by a music lawyer. The recording artist agreement template and the artist management agreement template show how the surrounding contracts are usually structured.

360 deals beyond music

The same structure, one partner investing in a person in exchange for a share of all their income, appears in other talent businesses:

• Influencers and creators. Some talent agencies and creator networks take a share of brand deals, platform income, merchandise and appearances, not just the deals they bring in. See the influencer agreement template.
• Athletes. Sports management agreements can cover playing contracts, endorsements, appearances and image rights together. The athlete endorsement agreement template covers the brand side.
• K-pop and other idol systems. Agencies that train and launch performers commonly control and share in recordings, concerts, merchandise and endorsements, which works in effect like a 360 deal.

The negotiation points are the same as in music: which income is covered, how the share is calculated, how long it lasts and what the partner commits to in return.

Frequently asked questions

• What is a 360 deal in simple terms?

  A 360 deal is a contract where a record label funds an artist and in return takes a share of nearly all their income: record sales and streams, but also concerts, merchandise, publishing, brand deals and licensing.

• What percentage does a 360 deal take?

  There is no fixed rate. Label shares of roughly 10% to 35% of the artist’s net income from non-record sources are commonly cited, and the figure depends on the artist’s bargaining power, the stream and whether the label actively runs it or only takes a share.

• What is the difference between a 360 deal and a traditional record deal?

  A traditional record deal covers recorded music only. A 360 deal also gives the label a percentage of touring, merchandise, publishing, endorsements and other income, usually in exchange for a larger advance and more investment in the artist.

• Why is a 360 deal considered bad for artists?

  Critics point out that the artist gives up part of the income that has historically been theirs alone, especially touring and merch, and that a label with passive rights is paid from streams it does not help build. Whether a deal is bad depends on the percentages, the term and what the label commits to in return.

• How long does a 360 deal last?

  It usually runs for the term of the record deal, which is defined by a number of albums or option periods and can last many years. Artists should negotiate when the label’s share of each stream ends, including after the term.

• What are active and passive rights in a 360 deal?

  With passive rights, the label only takes a percentage of income the artist earns through their own partners. With active rights, the label also runs that business itself, for example selling the merchandise, and usually takes a higher share.

• Who signed the first 360 deal?

  Robbie Williams’ 2002 deal with EMI is often cited as the first major 360 deal, because it gave the label a share of his touring, merchandising and publishing income. Paramore’s 2005 deal is often cited as an early example for a new artist.