Dealing with Getting Screwed in the Final Seconds of a Trade

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Contents

Getting Screwed by Landlord on Final Inspection/Bond

Seeking some advice ozbargain crew. Got 2 problems with final inspection which was recently completed

1) 3 years ago moved into a rental. At the time converted what was a theatre room into my office. Placed a desk down, put a chair on the carpet and didnt rearrange that room for 3 years. Several rent inspections, no problems ever raised.

Now time for final inspection and they are saying that the chair has caused undue damage to the carpet. They want me to re-carpet the whole room at a cost of $700 odd dollars to me. Not so happy about this… The carpet isnt wrecked but has obvious signs of wear in a circular area where the chair has been rolling around and back and forth. Wouldn’t this fall under normal ‘wear and tear’?? Especially since no issues were raised on prior rent inspections?

2) We had been using au pairs, one of the old ones dyed her hair pink at some stage in the second bathroom. The bathroom has glass shower doors with metal frames and a sealant. The sealant has absorbed the dye and is noticeably pink… The Landlord/Real estate agent want me to replace the entire door at a cost of $800. Shouldnt i just be able to get a quote to get the seal on the frame replaced?

The alternative he provided was that we recompensate him the replacement cost minus 10% for each year the property is old (real estate agent says its 3 years old where I know its 4 years old). Either way i feel like i’m getting shafted

Comments

Do you have photos of the carpet and stained bathroom for us to consider?

Pics are pretty self explanatory – though will add the damage to the carpet looks worse in the pic then it did in real life before we handed back the keys

I think a lot of newer carpet is absolutely crap. We bought some ‘expensive’ carpet from Bunnings when we reno’d and it’s shit; wears easily, fraying, discolouration, squashed down in areas of average trafffic and it’s not even four years old. So the carpet, IMO, is likely due to it being crappier quality, but as whoa1979 said the protector would have helped but depending on the pile there could still be some degree of wear if it’s been sitting there for a few years.

As for the seal, yeah I’d imagine that you should be able to get a new seal installed without having to replace the whole door. Now it could be that the owner just rang one store and asked about it and they said the whole panel needs replacing, but more likely they’re just trying it on to get the door replaced.

I think it’s one of those vinyl seals as oppose to silicon, and FWIW getting a decent finish on silicon sealant if you’re not familiar with it can be a real PITA.

Spit on finger, run finger over sealant…

Having looked at your photos you should have had carpet steamed. I’d tell them to wear the carpet as you have (pun intended) and you will replace the door seal. Honestly why didn’t you replace it, it’s obviously something they will have heart failure about…

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Expensive carpet from bunnings? Not surprised it ended up shit
Try expensive carpet from a carpet place

Try expensive carpet from a carpet place

Bunnings have the habit of sourcing items from the same manufacturers and using their own codes. The “carpet place” items could come from the same factory.

Agree with Slippery – you cud hv done bit of work and presented it better so that it wudnt hv escalated to this level.

Hmmmm well the real challenge you’ve got for yourself is that you’ve allowed the property manager to hone in on a couple of problem areas – so now unless they’re remedied very well they’re going to poo-poo anything you do.

I still contend the carpet isn’t an issue – I reckon if the carpet there was moistened several times and dried – then vacuum cleaned it’d get back to being much more normal.

The carpet isn’t in anyway damaged or worn – it appears just to be pushed down/squished from the chair rolling all over it. I mean I’ve heard property managers try and claim as a piece of furniture left in the one spot for several years understandably left a press down mark on carpet that it was ‘damaged’ – what BS. Thats completely normal and anyone with a vague clue understands this.

Plus as stated the quality of carpet they put in most rentals is absolute junk – so hardly surprising it’s more likely to show marks. But thats a BIG difference from neglect or abuse.

Again as stated yeah thats a vinyl or similar seal – so you can’t just caulk it. Should be able to buy a length of it from Bunnings or speciality store and you’ll pull the old one out and pop a precut length of the new one in.

The lesson to be learnt from all this is BEFORE you do the actual exit inspection – go around yourself a week or so in advance and nitpick anythiing they MIGHT target as an issue and fix/rectify it in advance.

Wet towel and a iron is how you uncompress carpet btw.

@Slippery Fish: Careful with the iron though – can’t unburn carpet and I’ve burnt carpet even with a hairdryer, much less an iron.

@0blivion: yes I suppose your right to warn, to me it was obvious to go slow and careful.

Caulk gun and sealant from bunnings, fix the seal yourself (or use airtasker etc). Carpet may be an issue seeing as the apartment is only 4 years old, but depends on your state. Maybe talk to your state rental/tenancy body? for NSW its NCAT

but you do not need to replace the whole door if its only a seal. The real estate agent is just being lazy.

Yeah thats my thought

In WA for what its worth.

Now time for final inspection and they are saying that the chair has caused undue damage to the carpet.

A $30 carpet chair mat could’ve prevented this. Something to keep in mind for your next rental office.

yeah, will never be renting again. Special circumstances meant renting was a better choice at the time. Now back to owner-occupied

Just to respond to your questions:
1) I’m pretty certain your assertion that the chair is ‘normal wear and tear’ is more than reasonable. It’s not like you made marks in the carpet by using a trailbike in there, carpet gets marks its normal – and expecting that simply as you had the ‘audacity’ to sit on a chair at a desk and subsequently caused marks on their no doubt entry level carpet & therefore must replace it is nonsense. Stick to your guns on that one.

2) As stated by earlier post, get a caulking gun, sanitary area silicon to match whatever’s been used (clear, white or whatever), stanley knife – cut the section of discoloured sealant out/off – going no deeper than needed. Replace, smoothing with a finger dipper in mild soap solution. Should be as good as new.

In general I think a LOT of property managers ACTIVELY and CONSCIOUSLY try and get themselves and the owners another revenue stream by targeting injust & bogus ‘damage’ charges – I’m absolutely certain of it.

All you need to know about property managers is how well known it is that renters DON’T have to steam/dry clean carpet on leaving (unless it’s dirty BEYOND normal wear and tear) but every single agent we ever used in

20yrs renting tried and generally succeeded in getting us to pay for this. Which is just dishonest and BS behaviour.

Thankfully we own our own property now but I’d strongly urge every single OzB renter to do the following:
1) On entry report to property dispute & challenge every single thing the agent states unless it’s 100% correct – if they say carpet is clean you MUST note every single stain, rip, worn patch – the wall is undamaged, you must say has some marks and a bump in it down low etc.

2) Take high resolution photos and video of the entire property that you’re responsible for – give or atleast offer a copy of this to the agent.

3) Get to know your state/territory tenancy body & read up on the guidelines in place for different problem areas of leases e.g damage, pets etc.

4) If you do any damage etc repair it yourself DO NOT leave and allow agent to assess costs – you’ll be grossly overcharged.

5) When the agent does the exit inspection BE THERE IN PERSON.

WE rented for almost 20yrs before having enough $$$ and desire to buy – but in all those years I never lost a single dollar from our bond BUT the agents nearly always tried to stuff us over but couldn’t as we had them covered from very thorough records etc.

I’m bracing myself for a flaming here as somewhat of a professional landlord. If carpet has an anticipated life of 7-10 years and you have demolished it in 3 years, I think you should mentally prepare to perhaps fund around 50-60% of the replacement cost (perhaps the carpet, not the underlay which may still be ok). If you knowingly left all that pink mess and calcification on the shower frame, at the very least you are up for the cleaning expense of that immediate area (say $100-150) which is probably about the same as the cost to get a mobile glass repair guy to come out and replace the seal which is probably a more practical outcome – and I suggest you should have considered doing this before vacating.

Also sometimes remember that landlords are caught out due to their property managers behaviours, I had a fly screen of a property with a 40x40cm hole in it. The tenant argued it was fair wear and tear, I suggested a small rip or 2cm x 2cm hole may be fair wear and tear but someone had obviously ripped this hole for the purpose of sticking their arm through and unlocking the door when they had forgotten or lost a key. Anyway the agent replaced the mesh using one of their suggested trades and I instructed the agent to take the costs from the bond. I attended the property while the work was done, a general handyman attended and 10 minutes later the issue was fixed. He then invoiced the agent something like $270 which the agent took from the bond. Needless to say the tenant was angry with ME for the excessive charge. I felt genuinely sorry for the tenant and asked the agent to challenge the handyman on his fee, he stood his ground complaining he lived 50km from the site (with the site being within 2km of the CBD and him living 52km away) and in the end the tenant had to wear the costs. Unfortunately as landlord I became extremely unpopular with the tenant received a few letters etc and I felt a little like a marked man for a few months. My hands as landlord were tied and I found myself in an unenviable situation where a tenant had been ripped off and I was an unwitting party.

The moral of the story is that the tenant could have replaced the mesh themselves for around $20 with parts from Bunnings, but wanted to argue the case and ended up somewhat unfairly being charged 10X this amount with basically everyones hands tied on the matter.

What a (profanity) or a repair guy, hope you black listed him from ever working for you again…

Anyway the agent replaced the mesh using one of their suggested trades

Agents tend to manage properties around their local areas and should have tradies from that area too.

I’d be blaming the agent for even calling this tradie if he really lived 50km away. As an agent, they should also have an idea of what price is reasonable and what isn’t – $270 is definitely not!

But I think this was a case of having a profit sharing arrangement between the tradie and agent.

you obviously never have tenants brave enough to put your case through VCAT or the other states’ equivalent because what you said about the carpet is bullcrap. VCAT took very strict mathematical calculation upon such issue and as a landlord you’d be considered yourself lucky to get a quarter of tenant bond for that.

To the OP I said tell agent and landlord to flap it and go to court, unless landlord have solid proof they can’t charge you for the replacement cost, even in that case you only have to pay pro-rata for the total cost, anything other than that they’ll have to suck it up. The court always takes your side if landlord cannot prove otherwise.

Why didn’t you change property managers?

Always a problem renting a brand new or near brand new property as the owner still sees it in their minds eye as a pristine shrine.

With the carpet – I would say it was fair wear and tear unless your chair was actively damaging it (eg tearing it). Although if you were eating KFC and doritos each night sitting at that chair and stained the carpet (due to not cleaning it regularly). If it was a helpful PM they would have told you to put a carpet protector down in year 1. From being a renter and now landlord – it is amazing that people think they don’t need to regularly clean their carpet (ie vacuum regularly and steam clean every few years).

The pink I think you will need to cop it sweet as it means the shower was not being cleaned effectively.

Before you redo the sealant try some bleach gel like domestos if you haven’t already. It may remove the dye. I would argue the carpet looks like reasonable wear and tear.

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Who Is About to Get Screwed in NBA Free Agency?

National NBA Featured Columnist June 28, 2020 Comments Comment Bubble Icon

Who Is About to Get Screwed in NBA Free Agency?

If you’re comparing NBA free agency this summer to 2020, then the answer to the question “who’s getting screwed?” is simple.

Everyone. Everyone is getting screwed.

Money is in short supply, largely because so many owners overspent two years ago. Players who once could have chosen between several offers of eight-figure annual salaries are now stuck fighting over the taxpayer’s mid-level exception worth $5.3 million. On top of that, luxury-tax concerns could prevent some teams from even using their MLEs.

It’s rough out there.

We can’t be too sympathetic for free agents who’ve willingly entered into the market when they didn’t have to. Their agents should have made it clear that declining player options or turning down reasonable offers to reach free agency in 2020 was a risk. The current financial climate was easy to see coming.

In addition to players who somehow misjudged the market, some have been wronged by circumstances beyond their control. Injuries, changing trends and bad timing will result in free agents receiving far smaller offers than they otherwise might have.

The following players are the most aggrieved.

Will Barton, SG, Unrestricted

According to ESPN.com’s Chris Haynes, Will Barton turned down a four-year, $42 million extension offer from the Denver Nuggets in October 2020.

That was a mistake.

Despite posting career highs in scoring (15.7), assists (4.1) and effective field-goal percentage (52.8 percent), Barton almost certainly won’t field an offer as good as the one he eschewed. The Nuggets could use Barton’s Bird rights to pay him as much or more than the extension they offered, but bad deals for Kenneth Faried, Wilson Chandler and Darrell Arthur mean retaining Barton at such a price would incur luxury-tax penalties.

Denver would be justifiably reluctant to pay the tax for a roster that has yet to make the playoffs.

There’s reportedly interest in Barton outside of Denver. According to Haynes, the Indiana Pacers are expected to target the 27-year-old spark plug. But even for the few teams with cap space (Indiana is one), paying a fringe starter more than the mid-level exception of $8.6 million might be a mistake. Barton may be worth that in a vacuum, but this summer’s landscape depresses everyone’s value because there’s less competition.

Several quality rotation weapons will be stuck playing for less than the MLE, perhaps on the minimum in some cases.

Barton should have grabbed the money when he had the chance.

Avery Bradley, SG, Unrestricted

Back in January, the Detroit Pistons put Avery Bradley on the trade block because they didn’t want to face the possibility of signing him to a deal worth as much as $20 million per season.

A lot has changed in the past few months.

The Pistons eventually shipped Bradley to the Los Angeles Clippers as part of the Blake Griffin deal. Perhaps most importantly, Bradley got hurt again. After playing only 55 games in 2020-17 with the Boston Celtics, he was limited to 46 contests in Detroit and L.A. last season due to abdominal and groin issues . He underwent season-ending surgery in March.

Health concerns will drive Bradley’s value down, likely putting an MLE ceiling on his salary.

With the proven ability to lock down opposing guards at either backcourt position and a career 36.6 percent accuracy rate from deep, Bradley is close to the ideal three-and-D weapon. He’s a bit undersized to tangle with the biggest scoring wings, but he’ll help whichever team signs him—health permitting.

If Bradley had become a free agent last summer, he would have cleaned up. That won’t be the case in 2020, however.

Jabari Parker, F, Restricted

Sometimes when you gamble on yourself, you lose.

Jabari Parker wasn’t interested in the three-year, $54 million extension the Milwaukee Bucks “were prepared” to offer before the start of the 2020-18 season, according to ESPN.com’s Zach Lowe.

Now, the former No. 2 overall pick may struggle to make that much in free agency.

Parker’s game has holes. He has roughly one half of solid defense on his career reel (Game 4 against the Celtics this past postseason). Though he’s a handful in the open floor, his overall offensive game may not elevate his teammates’ production.

Put bluntly, Parker gets his buckets, but it remains to be seen whether his scoring can meaningfully impact winning. The Bucks were better on both ends when Parker sat last year. The same held true in 2020-17.

Is that a track record worth $54 million over three years? And what if that same profile comes attached to two torn ACLs in the same knee?

Forces beyond (injury) and within (suspect defense) Parker’s control will conspire to shrink his earning power this summer.

LeBron James, F, Player Option

It’s strange to feel sorry for LeBron James. After all, his GOAT status, immense fortune and global empire suggest things have worked out pretty well for him.

But even someone as fortunate as James runs into bad luck once in a while.

Take the NBA landscape this summer as an example. Can James sign somewhere for a max salary worth 35 percent of a team’s total cap figure? Absolutely. Can he also link up with other superstars to form a new contender, one that perfectly fits his game? Sure.

But he probably can’t do both.

James could join the Houston Rockets, but not without forcing them to gut their roster to swing a trade for him. He could head to the Los Angeles Lakers for the max, but even with another superstar in tow, it might not be enough to overtake the Rockets or Golden State Warriors.

He could opt for the Philadelphia 76ers and earn a max salary, but fit concerns with Ben Simmons and Joel Embiid would make for a complicated union.

Run down the list, and it turns out James can’t get both a max salary and surefire title-favorite status. He’ll have to choose.

By the unreasonable standards of James’ charmed NBA life, not getting everything you want counts as getting screwed.

DeAndre Jordan, C, Player Option

DeAndre Jordan didn’t really change. The NBA changed around him—abruptly, and at the wrong time for a traditional center nearing his 30th birthday.

Jordan can hit free agency this summer by declining his $24.1 million player option with the Clippers. Until recently, a player with Jordan’s production could have easily justified taking that route.

Now, however, Jordan can’t be sure opting out is wise.

Kelly Olynyk signed a four-year, $50 million contract last summer, making him the biggest earner among centers signing new deals. Olynyk is a vastly different player than Jordan, one more suited to today’s spaced-out offenses. The market’s tighter this year, and teams are even less interested in conventional bigs.

If Jordan opts out, he might do better than Olynyk did a year ago, at least in terms of average annual value. But it’s tough to imagine him being offered a four-year deal. That could be a concern for Jordan, who may not have another chance to negotiate a substantial contract as he gets into his 30s.

Jordan should probably opt in. And though it isn’t true in every case, it’s often a sign of a rough market when that’s the best course for in-prime talents.

DeMarcus Cousins, C, Unrestricted

Some of the forces driving down DeMarcus Cousins’ value are self-inflicted.

He isn’t reputed for his winning ways. He acts out on the court to the point of distraction. He doesn’t run back on defense consistently. Locker rooms tend to be tenser when he’s around.

Cousins could have controlled all of that stuff, which means he’s at least partially responsible for why he’s going to get hosed in free agency.

But there’s also the Achilles injury he suffered in January, a major deterrent for teams considering a big investment in him. He couldn’t have helped that.

In addition, Cousins is a victim of the same changing personnel trends that affect Jordan and any other old-school center. Though Cousins has more shooting range and ball-handling chops than most conventional bigs, he’s still a sieve on defense who doesn’t move well enough to switch and often isn’t dialed in to the degree most great rim protectors are.

Those shortcomings used to be smaller concerns. Cousins was talented enough to offset them on offense. But now, teams that are serious about winning have to focus on building a switchable scheme, and they need heady, unselfish offensive players to counter opponents’ employment of the same tactic.

Cousins will turn 28 in August, and he just averaged 25.2 points, 12.9 rebounds and 5.4 assists in his fourth straight All-Star season. That’s a max-salary profile in any normal scenario.

Boogie, meanwhile, would be lucky to get a three-year deal worth $70 million.

Chris Paul, PG, Unrestricted

We have an under-the-radar potential screwjob here, as Chris Paul might be in for a contract that isn’t quite what he envisioned when he joined the Rockets last June.

Back then, it seemed as though Houston would ink Paul to a five-year max when the time came—partly as recompense for him opting into the final year of his deal and putting off free agency for a year.

At the time, Paul was 32 and still an All-NBA talent. Kicking free agency down the road at that stage of his career was a major risk. It worked out, as CP3 performed well with Houston, but it was a gamble all the same.

As ESPN’s Adrian Wojnarowski explained (h/t Kurt Helin of NBC Sports) : “Chris Paul didn’t turn down $200 million from the Clippers because he thought that somehow the Rockets were gonna talk him into saving them luxury-tax money.”

Since Paul joined the Rockets, ownership has changed. Tilman Fertitta is in charge now, and he isn’t the one who green-lit Paul’s arrival. More importantly, if any informal deals about Paul’s next contract occurred a year ago, Fertitta wasn’t privy to them. The five-year, $205 million contract Paul might have anticipated isn’t a sure thing anymore.

As a result, Fox Sports’ Chris Broussard reported there’s tension between Paul and the organization.

Nobody’s going to feel for a 33-year-old point guard who might “only” get a three-year max offer. But he expected a certain offer, made a decision last year based on that expectation and now may not have that expectation met.

How to Avoid Getting Completely Screwed by a 360 Degree Deal

The 360 degree deals present a major disadvantage for artists. But faced with a choice of the 360 deal versus no deal, the 360 deal may be worth accepting — but only if properly negotiated and only if the major pitfalls touched upon in this article are avoided.

If your career is hitting the point where a serious contract is on the table, please read this (and get a good lawyer). It comes from longtime music industry attorney Steve Gordon, Esq., whose seen his fair share of artist contracts over the decades – major, indie, good, bad, or otherwise.

First, let me give every artist and manager a quick primer on what a 360 degree deal is. Basically, the 360 is an exclusive recording contract between a record company and an artist in which, in addition to monies from sales of the artist’s recorded music, the label shares in other income streams such as touring and live performance, merchandise, endorsements, appearances in movies and TV, and if the artist also writes songs, publishing.

In fact, most 360 deals have catch-all phases giving the label a financial interest in everything else that the artist does in the entertainment business.

A traditional recording agreement only provides an income stream for the label from record sales. But similar to the traditional recording agreement, under the 360 deal the label acquires the copyrights in the artist’s recordings and options for multiple albums. The 360 deal also usually includes all the same deductions from record royalties as the traditional deal, including producer royalties and reductions for packaging, “net sales,” foreign sales, midprice and budget records, and even “new technology.” (originally applied to CD royalties and now to digital sales).

The traditional recording agreement had a lot of bad stuff in it for the artist. The 360 deal usually has all of that, and a lot more.

Origins & Reason D’Etra

The 360 deal is not new. The first reported one was English recording star Robbie Williams’ deal with EMI in 2002. But in the last few years 360 deals have become common place. New artists signing with a major label or their affiliates can expect it as a matter of course. The reason for the prevalence of the 360 deal is the dramatic decline in income from sales of recorded music.

Income from sales of pre-recorded music reached its peak in 1999 at approximately 14.5 billion dollars. By 2020 that amount had shrunk to only approximately $7 billion — a decline of more than 50% not accounting for inflation.

This is the reason that labels began to pursue income from sources that would have once been sacrosanct to the artist.

Under the traditional paradigm, the label would pay the artist a small royalty which was even smaller after all the deductions. The artist could expect to receive no recording royalty at all unless his album was a major commercial success. But he got to keep everything else: publishing, merch, touring, endorsements, etc.

However, these days artists often generate more money from other activities than record sales. For instance, Lady Gaga’s Monster Ball Tour grossed over $227 million dollars, and 50 Cent’s deal with Vitamin Water turned golden when he accepted shares in the company in exchange for authorizing the use of his professional name in “Formula 50”.

It is reported that his shares were worth over $100 million after Coca-Cola purchased Vitamin Water’s parent, Glacéau, for $4.1 billion.

These developments have spurred the labels to seek to participate in all the possible revenue streams generated by an artist. In my own practice, I have seen small labels also known as production companies get in on the act and insist that new artists sign 360 deals with them even if they put little or no money into recording and make no promises in regard to marketing or promotion. These companies expect the artist to provide fully mastered recordings for little or no money upfront, and they demand income from all sources of revenue.

Bottom line: these are horrible deals.

The label’s argument

Record labels argue (and majors who pay big advances have more credibility in making these arguments) that they make significant investments in an artist’s career by, among other things, putting up considerable sums for recording including paying advances to A-level producers, getting the artist’s music on commercial radio, securing invitations for the artists to perform on popular television shows, paying for one or more top quality videos for YouTube and other outlets, and providing tour support before the artist is popular enough to demand significant sums for live performances.

For emerging artists, a major label deal may be the path to becoming famous and rich. For instance, Lady Gaga was a virtual unknown before Interscope spent a vast sum putting her on tour as an opening act for the New Kids on the Block, paying for marketing (particularly to the gay community), hiring wardrobe and makeup, and paying all her other expenses for over a year, not to mention using their clout to get her invited as a guest on almost every important radio station in the country.

The labels argue that 360 deals are fair because monies generated from touring, merch, endorsements, and other streams would not exist at all without their efforts.

Many artists and their representatives would contend that it isn’t their fault that the labels are making less money from their records. 360 deals, they would maintain, are just a cynical money grab by record companies who are facing dwindling income from recorded music because they have failed to react appropriately to the changing industry. Asking artists to foot the bill hardly seems fair. But the reality is that since all the major labels and affiliates usually demand 360 terms, the artist may not have much choice. Given that reality, let’s discuss how the artist’s attorney can improve the deal.

How to improve the deal.

The ability of the artist’s attorney to improve a 360 depends on the artist’s leverage as much as the lawyer’s knowledge and negotiating skills. For instance, if there is a bidding war among two or more labels, the lawyer’s ability to improve the deal increases immensely. If the artist is already making significant income from live shows, if not from record sales, this can also aid the lawyer in negotiating better terms or at least carving out those areas where the artist is already earning money from the 360 deal.

Carve-outs

If an artist is already earning revenues from a particular source, the lawyer should try to carve that stream out of the 360 deal. For instance, certain EDM artists are earning tens to hundreds of thousands of dollars playing large venues and festivals. If a label wants this kind of artist, it should be prepared to forego tapping into live performance income as they had nothing to do with creating it.

Get the label to work for the money or at least pay advances for each stream.

In an interview about 360 deals with entertainment attorney Elliot Resnick (on Youtube, here) we referred to the splits in a form agreement that he supplied. The contract provided that the label’s take for various streams was as follows:

• 25% Touring and live performance

• 25% of “digital products” such as ringtones and sales from the artist’s fan site

• 25% of Endorsements

• 25% of any other income from the entertainment business including appearances on TV and movies, theatre, book publishing, etc.

These above percentages are typical but the actual amounts vary from deal to deal. Whatever the splits are, the artist’s attorney should try to get the label to commit to doing something to deserve a share of each income stream. For instance, in return for its 25% the label should commit to manufacture merch and sell it at retail, via the Internet and supply the artist with merch for sales on tour.

Points about publishing.

In regard to publishing, a 360 deal may include a “co-publishing” agreement in which the label has exclusive control of any songs that the artist writes during the term, and the label retains 25% of any monies generated from the songs. Or, the label may demand 100% of the “publisher’s share” or 50% of all income generated by the artist’s songs. In exchange for either of these arrangements, which are major gives, the label should have a dedicated staff committed to collecting monies generated by the artists songs, and that can pitch the songs to other artists for covers and music supervisors for placements in movies, television, video games, etc.

Aggressively negotiating advances

If the label is not equipped to provide support in respect to any income stream, or even if it is, the lawyer should try to exact advances for each stream. The ideal would be if the lawyer can also negotiate that as soon as the label recoups each advance for each income stream the label’s right to commission that income stream terminates. For instance, if the label advances $25,000 against a 25% commission for branding and endorsements and the artist gets an endorsement deal for $100,000, the artist would pay $25,000 to the label (25% of $100,000), but thereafter the label would not be entitled to any more money from that income stream.

Avoid Cross-collateralization

Just as important as negotiating for the label’s commitment to earn its keep for each stream and to pay advances for each stream, the lawyer should make sure that the label cannot cross-collateralize each stream. This means that the label should not be able to take money from one stream to pay for unrecouped balances for another. For instance, if the label pays $100,000 for recording costs and the artist’s royalty after deductions is 50 cents for an album that sells at $12.00, the artist must sell 200,000 albums to break even.

Now, suppose the artist only sells 100,000 (still a considerable feat in today’s market), and his income from touring is $50,000, if the contract allows the label to cross collateralize the various streams, the $50,000 will be applied to the “red balance” in his recording royalty account. This means the artist would receive nothing from touring — the monies would be applied to the unrecouped recording costs.

Net versus Gross

If the artist must shell out a percentage of his touring or merch or other income to the labels, her lawyer has to insure that the percentage is based on net, not gross. For instance, if a tour earns the artist $25,000 but her expenses added up to $20,000 (for hotels, transportation, booking agent fees, sound and lighting, etc.), the label should only commission the $5,000 in profits not the entire $25,000. Indeed, if the label’s commission was 25% and that was based on gross, the amount due to the label would actually exceed the artist’s profit.

In Summary

As I mentioned earlier, 360 deals generally suck for artists. But it may be worth accepting – but only if properly negotiated and only if the major pitfalls touched on in this article are avoided. Obviously the artist should never enter into any exclusive recording contract, let alone a 360 deal, without the assistance of capable counsel.

Steve Gordon would like to acknowledge the research assistance of Joy Charles in preparing this article.

About The Author

Steve Gordon is an entertainment attorney with over 20 years of experience in the entertainment industry, including 10 years as Director of Business Affairs for Sony Music, attorney at a law firm representing Atlantic and Elektra Records, and in-house music counsel for a Hollywood Studio. His current and recent clients include entertainment companies such as MTV, Music Choice, Time Life Films and Soul Train Holdings; record labels such as Smithsonian Folkways and Shout Factory; Television Services such as PBS, Maryland and Louisiana Public Broadcasting; and established as well as up-and-coming artists, producers, indie labels, and managers.

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43 Responses

I wonder how large the relevent audience is for this article?

Five or ten artists at the moment?

Im an artist and I was very pleased to read this.

I meant, how many readers here are negotiating 360 deals, or will be negotiating them soon.

I understand where you’re coming from, but I think it was more so an article to inform musicians long before they encounter the chance to sign a major deal. Their are a lot of independent labels who as mentioned aren’t as big and are offering 360 deals. Many musicians where I’m from have found themselves in horrible contracts with small labels that would have been avoided with the knowledge presented here. I have certainly learned a few things and am grateful to the author.

me 2 salute from ny

From a label’s perspective, a 360 deal is very convenient since it lets you manage in one place all the aspects described above.

From the artist’s point of view, yes it can be different since such “all-in” deals also represent a higher risk if the label fails in executing the deal terms.

This article was fantastic. Extremely insightful and so in-depth and all-encompassing. Thank you so much for your work and for sharing!

Let’s be real here. Who invests significant funds to record, market, and release music to just recoup their investment from sales of pre-recorded music. That is ludicrous given the state of today’s music business environment. Your odds at the “BIG WHEEL” in Las Vegas are better.
Publishing (ie copyrights) only have value that the market determines by perception. If a recording company or other venture creates that value through promotion, marketing, and exposure than why shouldn’t they be entitled to recoup their investment and share in the value they helped establish? This argument by lawyers to the contrary is quite frankly a joke.
What you need to negotiate as an artist are escape clauses that provide you some relief in the event that the venture offering you the 360 deal does nothing other than acquire interests in your copyrights for noe effort to exploit them or you.

Publishing has been on the table for over 50 years, ever since it became common for recording artists to write their own material. And all major labels have had well-evolved publishing divisions that helped exploit artists’ catalogs to their (putatively) mutual benefit. Everything else in the 360 is relatively new as part of the contract between artist and label, and the label likely has far less capability when it comes to helping artists with those areas. The “carve-out” part of this article is the big take-away.

Publishing is not copyrights. It’s really simple;-
Copyright is the right to copy, and to generate monies off sales of those copies.
Publishing monies are generated by use of the copyrighted materials in public broadcast.
Doh.

The usual suspects here that complain about Pandora or Google or Apple being “anti-artist” should perhaps target the original rip-off merchants, which is to say the record labels themselves and terrestrial US radio for paying nothing for recording performance royalties. Stomping your feet about the perceived inadequacies of new market entrants while effectively ignoring the real challenges that have faced music creators for decades rather undermines your points.

Exactly. Labels have stolen way more money from artists than any so-called pirates.

Re: Sticky Label
You don’t know what you’re talking about! Businesses that build their models on other people’s content are bottom feeders. They entice Wall Street with obfuscating figures to garner investment. If they can’t make it paying songwriters and recording artists a living wage, then the business should go away. You can’t open a restaurant without food and people to cook it.
Like it or not, society needs a filter system. Radio and record companies served that role. Songwriters that were good derived careers. Now with anarchy and digital chaos everywhere it is increasingly difficult for real talent to cut through. You might not like the system, but it worked for a lot of people.
If we continue to devalue music and the talent needed to write, play, and record it, we’ll become artistically bankrupt. I’m not sure if we aren’t already there…

I’ve successfully negotiated 6 360 deals in the past 5 years. 2 artists are now major artists in the game and the other 4 have withered away. When it comes to percentages do not let anyone, even a lawyer, tell you that it is “typical”. There is NO such thing. EVERYTHING is negotiable.
Also, if they want money from other revenue streams then YES, make them work for it as the article states.
Example: they want money from any acting that you do? Well, ok, hire me an acting coach and an agent.
Money from shows? Then pay for a tour.
get it?
Leverage is still the key.

R.P. good for you. Someone who can see outside the box, that was the whole idea behind this article. Learn to see past the walls that are put up in front of you, and protect yourself. Like the article said in the beginning, 360 deals can be good or bad it all depends on how you negotiate the deal. Without flying out of control, the statement here is “Protect yourself the best you can” if the label wants that part of the deal. Make them work for it, don’t just dive in head first blindly.

How do I get in contact with you? Expect to need your service in January 2020.

[…] that their decision was wrong? Also, western contracts aren’t much better sometimes, and occasionally, they are worse. Also, it’s a separate issue from the […]

[…] that their decision was wrong? Also, western contracts aren’t much better sometimes, and occasionally, they are worse. Also, it’s a separate issue from the […]

[…] possibility being solicited by a record company, dealing with A&R and we will explain the “360 Deal”. The webinar will stream live on December 13th 2020 at 2pm EST and it can be viewed any time at […]

[…] games, movies, television and commercials. We could add publishing and everything the labels are taking through 360 deals, too. The take away, there is more to this than album […]

This blog post is very relevant and there are points that are worth considering.

Although we need to seek out what the artist want, are you in for the music or are you in for the money? Misunderstand me right.
I do not agree that all 360 deals sucks, what you I think you are referring to is major labels that looks at artists as a product. Why shouldn’t they? Their job is to maximize their profit as all other businesses. Why would they risk a product they don’t know wouldn’t sell? “Record companies remain the largest upfront investors in artists careers. They shoulder the financial risk inherent in trying to break a new act “-IFPI 2020. What they normally do is to try out “new” artists or developing artists under another label that they own or part own. If they sell very well, they get upstreamed to the ‘real’ majors. By owning these smaller record labels the majors can develop, control and try out new artists, you might think they are independent but the majors usually own them. Why is this a wrong thing? I mean if you are a commercial artist, if that is what you want; selling shit loads of records, then you’re maybe more into the fame then the integrity of your art. You might say “ah, but all I want to is to get my voice heard” (you’re not the only one to say at least). You need to do something that differs yourself, you need to do the work for them, and you need to be a product before they even think about signing you. You call the 360 deal a bad deal, well let me tell you what the majors did when records where selling; They signed on loads of artists that they saw had potential to sell like Mariah Carry or Prince. “SAW THE POTENTIAL”, they signed a record deal to then record one album and then have them on the roster for a long, long, long time. This was a tactic they used so that other majors wouldn’t make the artist bigger than Prince or Mariah. My point is; there will always be something, but everything is down to business, as an artist you are a brand and a product. It is more important these days as an artist to actually know the business. I totally agree with you though that if the label takes a cut of something else, then they should participate in the job! As you said: “get a hell of an lawyer”.

[…] to be something that went straight to the artists. But now with 360 deals,” in which a label controls more of an artist’s career, such as marketing, promotion and touring in exchange for a bigger […]

[…] something that went straight to the artists. However now along with 360 deals,” in which a label controls much more of an artist’s career, such as marketing, promotion and touring in exchange for a […]

[…] the business types have won back much of that power through onerous contracts (e.g., the miserable “360 Degree Deals” in artist contracts). The Second Circuit’s error in 16 Casa Duse threatens to shift what little […]

[…] deals with artists that has them getting a cut from their merch, touring and other revenues — the famous 360 deal — while they’re constantly laying off employees and unable to create new jobs. Booking […]

360 contract = music career disincentive. Good think I like my day job.

[…] How to Avoid Getting Completely Screwed by a 360 Degree Deal… […]

[…] of the popular acts under their roster. However, the unfortunate and almost thieving truth of many 360 deals offered from labels to artists is they often don’t end up as lucrative as first thought. Record […]

[…] not possibly earn a living, unless you’re Rihanna. Unless you’re selling in that volume. And now they’re doing these 360 deals, where they want a bit of your touring, your merchandising. They even want a share of management […]

[…] earn a living, unless you’re Rihanna. Unless you’re selling in that volume. And now they’re doing these 360 deals, where they want a bit of your touring, your merchandising. They even want a share of management […]

[…] not possibly earn a living, unless you’re Rihanna. Unless you’re selling in that volume. And now they’re doing these 360 deals, where they want a bit of your touring, your merchandising. They even want a share of management […]

[…] about £690,000) — it all looks designed to get Khalifa out of his 360 deal (read about those here), which made those being sued a lot of money. Check out this lawsuit breakdown, courtesy of […]

[…] News. (2020). How to Avoid Getting Completely Screwed by a 360 Degree Deal. [online] Available at: http://www.digitalmusicnews.com/2020/07/02/threesixty/ [Accessed 20 Jan. […]

[…] involve recordings and publishing, instead of more onerous 360-degree deals (read more about those, here). Or perhaps they’re cool with handing you back your copyrights, as long as they get a […]

[…] + How to Avoid Getting Completely Screwed by a 360 Degree Deal […]

[…] Avoid Getting Completely Screwed by a 360 Degree Deal. [online] Digital Music News. Available at: http://www.digitalmusicnews.com/2020/07/02/threesixty/ [Accessed 24 Mar. 2020]. The Balance. (2020). Is There Any Reason to Sign a Music Publishing Deal […]

[…] Digital Music News explained […]

[…] that also can be potentially harmful for the artist is the notorious “360“deal. In an article that appeared on the website Digital Music News a 360 deal is described as “an exclusive […]

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