We found out this week that Adele has signed a new record deal, apparently worth £90m. Her new arrangement with Sony is one of the highest in the past two decades. The last time anyone was signed for anywhere near that amount was Robbie Williams for £80m by EMI in 2002. But it doesn't actually mean she makes £90m overnight. An ex-major label employee has been chatting to Newsbeat about the much more complex reality. He wanted to stay anonymous for our conversation. "When an artist signs a deal there will be X amount paid upfront and X on the delivery of the record. The advance [the amount paid up front] will have to facilitate the recording of the album, and paying the producers and writers. Management will also take an average of 15% commission," he explains.
Advances are also repayable. That means that they're like a loan, and the label will take the royalties from album sales and sometimes merchandise sales and other income from the artist until they make the money back. So, Adele won't be seeing the whole £90m drop into her account, and the amount she gets will have to pay for her to record an album. She'll then be in debt to the record label until she sells enough albums to make the money back.
Why did Sony reportedly spend so much on her? Big-money deals like this are incredibly rare, especially as streaming becomes the most popular way to listen to music. Last year, Variety reported that streaming had increased by 54% in 2014 in the US. Physical album sales have been steadily declining for the past few years. Sony giving Adele a deal worth £90m means that they think she'll make at least that amount of money in record sales. "Big labels don't gamble any more. Adele is a relatively safe bet for the time being," the ex-label employee tells us. The £90m may also cover multiple albums, meaning it'll be paid in instalments over a number of years. "If [the cost] is not recouped, the artist doesn't get paid," he adds. They sent Newsbeat a copy of a contract for a major artist's £1m deal, to show that the amount the artist receives is much less. The contract revealed that the singer received £60,000 up front, and that was inclusive of recording costs. If we scale up those figures for Adele's deal, she'd receive £5.4m up front. That's still a lot more than most artists would get. The deal does mean that Sony see her as a powerful artist with the ability to sell records in a difficult climate. In short, her fourth album better be really, really good.