The New Deal: 50 Cent’s 50/50
From what I’ve gathered from reports, 50 Cent has started to offer a new type of deal to artists signing to his label.
For example, 50 cent would pay for the artists overheads, such as recording & promotion.
Once the overheads are recouped, the profit is split 50/50. This differs from the traditional recording contract and the more recent 360 deal in several ways. This method was used for Lloyd Banks: Beamer, Benz & Bentley and Shawty Lo’s recent deal with G Unit Records.
Usually, once a label recoups its overheads from their artist, the label pays them based on a royalty system.
The royalty rate differs from artist to artist, but traditionally around 10 per cent of the sales of a record go to the artist. Only the songwriter receives radio royalties, therefore if the artist did not write the song they dont receive any royalties from radio.
The model was first used by UK indie label Big Dada, who offered their artist Wiley a similar type of deal.