Music Lawyer
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A 360 deal is a music contract in which a record label or music company takes a share of an artist's income beyond recorded music, such as touring, merchandise, endorsements, sponsorships, and sometimes publishing. In return, the company usually provides an advance, marketing, tour support, artist development, or other resources.
"360 deal" names a category of contract, not a single structure. One deal may cover only merchandise and touring. Another may reach almost everything the artist earns. The company's percentage often varies by income stream. Before signing, an artist needs to know exactly which income the company shares in, how its share is calculated, and whether it gets any control over those activities.
A traditional record deal centers on recorded music. A 360 deal adds a share of the artist's other income, which can include:
Sharing in revenue is not the same as owning or controlling it. A label that receives a percentage of touring income does not automatically control the artist's touring business, merchandise rights, or trademarks. Whether it does depends on whether its rights are passive or active.
Active vs. passive rights in a 360 deal
Many 360 deals mix the two. For example, a label may have active merchandise rights and passive rights in touring income. This is one of the most important distinctions to settle in a 360 deal. It determines how much income the label takes and who makes decisions about the artist's career.
What percentage does a label take in a 360 deal?
There is no standard percentage. Passive participation in touring, merchandise, and endorsement income is often in the range of roughly 10%–30%, usually calculated on net income. Active rights generally come with larger shares, because the company is doing the work and bearing the costs. The final numbers depend on the artist's leverage, what the company is investing, and how each income stream is defined.
Negotiate each income stream separately. A single blanket percentage is rarely the best outcome for the artist.
The revenue base is the income the label's percentage is applied to. It often matters as much as the percentage itself.
Suppose a tour brings in $200,000 in gross income, and production, crew, travel, and booking costs total $150,000. The label takes 15%.
The percentage is identical, but the gross-based deal pays the label four times as much. On a tour with thin margins, a gross-based share can take a large part of what the artist actually earns. Touring participation should almost always be calculated on net, and the contract should specify which expenses are deductible.
These two issues get less attention than the headline percentages, but they often have a bigger effect on what an artist takes home.
Cross-collateralization. In many 360 deals, the label can recoup the recording advance and other recoupable costs from the artist's share of touring, merchandise, or endorsement income, in addition to record royalties. If that happens, income from other parts of the artist's career goes toward repaying the label before the artist is paid. Where possible, negotiate to keep non-record income outside the recoupment pool, or at least limit which income streams can be cross-collateralized.
Commission stacking. The label's share is often only one of several deductions from the same income. An artist's manager commonly takes 15%–20%, a booking agent around 10% of touring income, and a business manager around 5%. If a label also takes 15%–20% of touring income, the combined deductions can exceed 40% before expenses. Before agreeing to the label's percentage, total up everyone who takes a share of each income stream.
Touring and live performance
The label may take a percentage of concert and touring income. The key terms are the revenue base (gross or net), which expenses are deductible, and whether tour support the label pays is recoupable from the artist's touring share.
Merchandise
Merchandise covers clothing, accessories, and other branded products. Confirm whether the label only takes a share of merch income or also has rights to manufacture, license, approve, or control merchandise. Merchandise also involves trademark questions. The artist should own and register their name and logos, and the agreement should give the label, at most, a license.
Endorsements and sponsorships
Brand partnerships can become a major income source as an artist's audience grows. The contract should state whether the label only takes a share of endorsement income or also has the right to source, negotiate, or approve brand deals. It should also state whether existing partnerships are excluded.
Publishing and songwriting
Some 360 deals extend to publishing income. This does not mean every 360 deal transfers the artist's publishing rights to the label. Publishing covers rights in the underlying song (the composition), which are separate from rights in the sound recording. Check whether the agreement gives the label only a revenue share or also publishing ownership, administration, or licensing rights.
360 deals became common in the 2000s, as physical sales collapsed and recorded-music income fell. Labels argued that their investment in an artist's career creates value across touring, merchandise, and brand partnerships, so they should share in that value as well as record sales.
The argument holds up only to the extent the label actually contributes to those income streams. A label that takes a share of touring and merchandise income while committing real money, staff, tour support, and marketing to those areas offers very different value from one that takes the same share and contractually commits to nothing.
A 360 deal is not inherently good or bad. It can make sense for an artist who needs significant capital, infrastructure, and relationships the artist can't build alone, especially early in a career, when the label's investment can create the touring and brand income it later shares in.
It makes less sense for an artist who already has an audience, a team, and established touring or merchandise income. Then the label shares in revenue it did not help create.
The advance alone doesn't settle the question. Evaluate the whole agreement: which income the label shares in, what it is obligated to do, how long its rights last, and what happens after the deal ends. Artists who want funding without giving up non-record income should also compare a 360 offer against a distribution or label services deal. See: Distribution Deal vs. Record Deal: What Independent Artists Should Know
Evaluate each income stream separately. Treating "360 rights" as a single term usually favors the label. Key provisions to negotiate:
Can certain income streams be excluded?
Yes. The scope of a 360 deal is negotiable. Common exclusions include businesses and partnerships that predate the deal, existing publishing agreements, acting and other non-music income, and ventures the label did not help develop. Artists can also negotiate a lower share in a category, or have the label's share there start only after a set income threshold.
A traditional record deal focuses on making and selling recorded music. A 360 deal extends the label's share into other parts of the artist's career.
In practice, the line is blurred. Many modern record deals include some 360 terms, and many 360 deals take only passive shares in a few income streams. As with any music contract, the rights and obligations in the agreement matter more than what it is called.
In a 360 deal, the label shares in an artist's income from multiple sources, not just recorded music. Whether that is a fair trade depends on four things: which income streams the label shares in, how its share is calculated, whether its rights are passive or active, and what it is contractually required to provide in return.
This article is for general informational purposes and is not legal advice. Reading it does not create an attorney-client relationship.
Form 15620 (April 2025), Section 83(b) Election, must be completed and mailed to the IRS Service Center where you file your taxes within 30 days of your grant date, with a copy sent to your employer.
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