Record Deal Terms to Check Before Signing

A record deal changes who can do what with your music, for how long, and what you are paid for it. The money is usually the easiest part to read. The terms that matter most for a catalogue are often the quieter ones: how long the label holds the rights, whether they come back, what has to be repaid before you earn, and what you are allowed to see.

This guide lists the terms worth checking before you sign any agreement that gives someone else rights in your recordings, explains how an advance and a royalty fit together with a worked example in invented units, and says what a distribution agreement does and does not transfer. WBBT is a distributor, so we have a commercial interest in artists choosing distribution over a label deal. Read this as a checklist from a party with an interest, not as advice. It is a UK-focused summary, not legal advice, and a contract is only as good as the lawyer who reads it.

Three kinds of agreement, not one

People use “record deal” for very different things. The Competition and Markets Authority, in its 2022 study of music streaming, described three routes open to artists: do-it-yourself distribution, artist and label services, and a traditional record deal. They differ in who pays, who owns and who controls.

Route	Who funds the work	Who usually owns the recordings	What to read closely
Distribution only	You	You, unless you sign something that says otherwise	Exclusivity, term, any collection mandate, fees on leaving
Label or artist services	Shared, or you pay for services	Depends on the contract	What the service is, what it costs and what rights it takes
Traditional record deal	The label, usually as an advance that is recouped	Depends on the contract. It may be the label, or the label may hold a licence	Everything in the table in the next section

Many offers sit between those rows. Decide which one you are actually being offered before you compare terms.

The terms to check

Term	What it means	Ask
The parties	The legal entity that signs, which may not be the brand you know	Which registered company is this, and can I find it on Companies House?
Term and commitment	How long the deal runs and how much music you must deliver	How many recordings or albums, and what is the minimum period?
Options	The label’s right to extend the deal, usually at its choice	Who decides whether an option is taken, and what happens if it is not?
Territory	Where the rights apply	Is it the world, and can the label actually exploit it everywhere?
Rights granted	An assignment transfers ownership, a licence grants use for a period	Which is it, in which formats, and does it cover sync or other income?
Advance	Money paid up front against future income	How much, and is any of it returnable?
Recoupable costs	Costs the label recovers before you are paid, such as recording, video or promotion	Which costs, with what limits, and may they be recovered from other income?
Royalty rate and basis	The percentage, and what it is a percentage of	Is the rate applied to income at source or to the label’s net receipts, and what comes off first?
Statements and payment	How often and in what form you are told and paid	How often, in what form, and what is the payment threshold?
Audit	Your right to check the label’s figures	Can I audit, how often, at whose cost?
Approvals	Control over artwork, remixes, release dates and sync	What needs my approval and what does not?
Release commitment	Whether the label must release what you deliver	If it does not release within a stated time, do the rights return?
Reversion	Whether the rights come back, and when	After how many years, and on what notice?
Termination	How the deal ends and what survives	What happens to live releases and to future income?
Warranties	Your promises about what you deliver	Am I promising that all samples, features and artwork are cleared?

Advance and royalty: a worked example in invented units

An advance is not a gift. In most deals it is an early payment of royalties you may earn later, so it is repaid, or recouped, from your share of income before you receive anything more. The units below are invented, the 20% rate is a round figure for illustration and not a benchmark, and real contracts define the income and the costs in ways that change the sums.

Suppose a label pays an advance of 10,000 units and pays you 20% of its net receipts from your recordings. Assume the advance is not returnable and is recouped only from your 20% share.

Net receipts from your music	Your 20% share	Advance still unrecouped	Paid to you beyond the advance
10,000	2,000	8,000	0
25,000	5,000	5,000	0
50,000	10,000	0	0
100,000	20,000	0	10,000

You break even at 50,000 units of net receipts. If the contract also lets the label recover 3,000 units of recoupable costs from your share, the break-even moves to 65,000, because 13,000 divided by 0.2 is 65,000. Until you reach it, the royalty statements show a balance and no payment.

Now put the same net receipts into a self-funded route. Suppose you pay 3,000 units for making and promoting the release and keep 70% of what the platform accounts to you, as the WBBT Free plan does, ignoring any subscription on a paid plan.

Net receipts	Label deal, total you receive	Self-funded, after your 3,000 of costs
10,000	10,000	4,000
25,000	10,000	14,500
50,000	10,000	32,000
100,000	20,000	67,000

Two things follow, and neither is a recommendation. The advance is a floor: at low receipts it pays more than the self-funded route and carries no repayment risk. And the table gives both routes the same receipts, which is the assumption doing the work. A label’s marketing, playlist relationships and distribution may raise the receipts, or may not, and nobody can promise which. Distribution at WBBT does not promise streams or placements either. Run your own sums with the real draft in front of you.

What a distribution agreement does not transfer

Distribution is a service for delivering your music to stores and collecting what they report. WBBT’s FAQ states that distribution does not by itself transfer ownership of your recordings or songs, and that you should read the distribution agreement and any separate licensing or collection mandate to understand what you grant. The mandates matter. For example, when you switch on the PPL UK option, you grant WBBT Group Ltd an exclusive licence of the UK public performance and broadcast rights in that recording while the option is on, and you can switch it off. Ownership stays with you, and the licence covers only that right. The PPL guide explains it.

The point applies to any contract: ownership, licence, exclusivity and mandate are separate ideas. Ask for each to be named.

What the market data does and does not tell you

The CMA published averages for new major-label multi-track deals from 2012 to 2021. The average gross royalty rate rose from 19.7% to 23.3%, and the share of contracts in which the label owns the recording copyright in perpetuity fell from 66% to 26.4%. The CMA also said terms vary significantly between artists, so treat the averages as context for questions, not as a standard to demand. They describe major labels and a specific kind of deal, and they say nothing about an independent label’s offer or a distribution agreement.

The same report notes that artists often lack clear information about how streaming income is calculated. That is why the next section matters.

The UK transparency code in plain words

In January 2024 the Intellectual Property Office published the UK Voluntary Code of Good Practice on Transparency in Music Streaming, agreed by twelve music industry bodies. It is voluntary, and failing to follow it is not a breach of any law or contract, but it states what a label can reasonably be asked to provide. Among other things it says:

• Labels and publishers should strongly encourage independent legal advice before signing, and managers should make sure artists understand the terms.
• Advances should be identified, along with the fact that they are recouped before royalties become payable.
• Contracts, or information they point to, should explain how royalties are calculated, including any recoupable costs, and how and how often royalty information is shared.
• Artists should receive a statement of accounts and any royalties due at least twice a year.
• Contracts should say whether the streaming rate applies to income at source or to net receipts, and how withholding tax is treated.
• Artists already in a deal should be able to ask for that information. The code also covers a contractual right to audit streaming-related financial information.

The code does not address the return of rights. GOV.UK describes research the Intellectual Property Office published in February 2023 on contract adjustment and rights reversion, and presents it as research only. If you want a right to get your recordings back, negotiate it into the contract.

Eight steps before you sign

1. Get the whole document, in writing. A summary email is not the agreement. Read every schedule.
2. Find out who you are signing with. Look the company up on Companies House and check its name matches the contract.
3. Take independent legal advice. That means a music lawyer who does not act for the label. Ask what the fee is before they start.
4. Fill in the table above for your draft and note every blank or vague entry, such as “other costs”.
5. Run the sums. Use your own numbers for the advance, the rate and the costs, as in the example, and test a low and a high case.
6. Check your existing obligations. A previous distributor, a PPL registration, a Content ID arrangement or a producer’s agreement can conflict with what you are about to grant.
7. Do not sign under pressure. A real offer survives a few days of reading. Be wary of anyone who asks you to pay to be signed, will not give you the contract in writing or promises streams or playlist placements.
8. Keep a signed copy beside your catalogue register, with the date and the version.

If you are on the other side of the table, writing terms for artists you sign, how to start a record label covers the agreements and records you need, and the hub guide label, white-label or API compares the tools. Splits between collaborators are a separate document, explained in royalty splits and payouts.

Frequently asked questions

Is an advance a loan?

It depends on the contract, so ask. The UK transparency code says an advance should be identified as such, together with the fact that it must be recouped before royalties become payable. Whether an unrecouped balance can ever be demanded back is a separate term, and a solicitor can tell you what your draft says.

Does using a distributor mean I have signed a record deal?

No. A distribution agreement is a different kind of contract, and WBBT’s FAQ says distribution does not by itself transfer ownership of your recordings or songs. You should still read it, along with any separate licensing or collection mandate. The WBBT FAQ lists the questions to ask.

Should I accept a deal in which the label owns my masters for ever?

We cannot answer that for you, and neither should anyone who has not read your contract. The CMA found that the share of major-label deals in which the label owns the recording copyright in perpetuity fell between 2012 and 2021, which shows that other structures exist. Ask what is offered in return and whether the rights ever come back.

Can I get out of an old contract?

That depends on its terms, so take advice before you act. The UK transparency code also says artists in existing deals should be able to ask for the key royalty information on request. GOV.UK describes government research on rights reversion and contract adjustment, and it does not say that either will become law.

Do I need a lawyer to read a contract?

For a record deal, yes. The transparency code says labels should strongly encourage artists to get independent legal advice, which means a lawyer who does not act for the label. Music-industry bodies such as the Musicians’ Union, the Featured Artists Coalition and the Music Managers Forum exist for the people who make music, so ask what each offers.

Does WBBT offer record deals or advances?

This guide describes distribution, which is what WBBT sells. Nothing here describes an advance programme, and we do not recommend any deal. Our plans and what they include are on the pricing page.

Sources and next steps

These are the primary documents behind the facts above. Re-read them before you rely on a detail.

• UK Voluntary Code of Good Practice on Transparency in Music Streaming, GOV.UK, Intellectual Property Office, 31 January 2024 (accessed 25 October 2026).
• Music and streaming market study, final report: executive summary, Competition and Markets Authority, 29 November 2022 (accessed 25 October 2026).
• The government’s work on music streaming, GOV.UK, for the research on contract adjustment and rights reversion (accessed 25 October 2026).
• Find and update company information, Companies House, for checking the company that offers you a contract (accessed 25 October 2026).

To go further, read the hub guide for labels, then how to submit a demo to a record label, which covers the step before an offer exists. Compare the WBBT plans, read the WBBT FAQ on ownership and rights, see the music distribution page, and submit your music if you decide to distribute your own releases.