As I mentioned in another article, a “strategic signing” –a situation where an artist is signed to a record/production deal simply to get that artist out of the way of another artist of similar style—is nearly impossible to prove. Production companies and record labels have contracts which allow them a great deal of latitude when it comes to the production, promotion, and distribution of their artists. This simple fact has allowed these companies to utilize their contracts as lethal weapons upon unsuspecting artists.

One of the ways that a contract is used to hinder rather than help an artist is through the fact that a record/production company has bound the artist to agree that the company has, in its sole discretion, the right to determine, when, where, how, and what songs the artist will record. In other words, the company feels that if they say “jump”, all the artist should respond with is “how high?”

Record/production companies initially had this clause inserted so as to allow them the ability to do their work without anyone second-guessing them. They argued that they understood the various aspects of the business better than the artist and that they alone should determine such things as what song would fit the artist’s commercial image better; when an artist should go into the studio; what constitutes an “acceptable” song; and what is or is not a quality recording. Therefore, if they determined that a recording did not meet any of these elements, they can either have the artist re-record it—and re-record it and re-record it-- until it is “acceptable”. Also, since these companies do not even have to define exactly what “acceptable” is, the artist is at the mercy of the company on whether the song is ready or not.

The record/production company can also delay releasing it until “the market is right”—that is, until the recording will have a chance to do well commercially. The movie industry even has similar clauses. When Arnold Schwarzenegger’s film “Collateral Damage” was about to be released, his film company exercised its rights and delayed releasing it by nearly 8 months. The studio felt that the film’s plot about a terrorist destroying a high-rise office building was too similar to the real-life events of 9/11 and they did not want to appear to be trying to commercially exploit this tragedy.

To avoid languishing under a contract like this, an artist should seek out a commitment by the record/production company to record and release a minimum number of songs in a given time OR pay additional monies if that commitment cannot—for whatever reason—be kept. If a record/production was serious about the artist, they would be willing to negotiate this item. An artist should also seek to have a commitment to develop the artist included. This commitment would seek to spell out the minimum amount of time and money the company is willing to invest in the artist’s career.

Another way that contracts are used against the artists that sign them is through the “option” clauses inserted throughout. “Options” can be viewed as a “do-over” in the sense that a record/production company, faced with the possibility that an artist’s contract is about to expire, asserts that they want more time or another chance to make money for, with, and off of the client. These clauses, usually doled out in increments of 1 year, are written into the initial contract and can be activated automatically at the end of the initial contract at the discretion of the record/production company. If an artist is planning on leaving and the record/production company does not want that artist to leave, they can notify the artist that they are “exercising their option” and force the artist to abide by the terms of the contract for at least another year.

Options, as you might have guessed, can also be exercised to simply keep the artist signed—sometimes for as long as seven years. In a strategic signing, an artist has his options exercised continuously until there are no more. Most record/production will insist upon some options, so an artist should try to limit their inclusion to no more than three. The artist should also try to negotiate a buy-out clause as an added protection. This buy-out price should cover all the costs associated with the artist being a part of the record/production contract to date such as recording, publicity, photos, etc. and SHOULD NOT include any money added by the company as a form of punishment.

Since all the elements listed above are perfectly legal, an artist— along with his manager and attorney—should investigate any contract thoroughly to maximize their chances for success. Without such a thorough scrutiny, an artist runs the risk of severely limiting—or ruining-- their career.