Exit feuds stir arguments about Nigeria’s artiste-label deals

The once-thriving Lagos-based music label Tinny Entertainment has been without an artiste, largely remaining inactive since 2018 when its executives quit en mass following a well-publicised dispute about royalty sharing and the generally dreary prospects that awaited its signees.

The drama began in September 2018 with the exit of Ycee who was its only popular artiste. Soon after, three others including Dapo Tuburna, Damilare, and Bella would follow suit alongside executives who repeatedly came and went in a turnover contagion.

Ycee would publicly argue that “not a dime” made it into the coffers of Tinny’s signees after the label famously proclaimed in late 2019 that it had raked in a cumulative total of 100 million streams across platforms.

Tinny’s PR head who also joined in the mass resignation accused the record label’s owner Timilehin Arokodare of high-handedness, adding that the angst started during their Juice Concert in London where Timilehin was said to have ditched Ycee and Bella with no funds for their return flight and upkeep as retribution for a disagreement they had.

There was an in-house rancour, with signees lamenting that they were being made to fund distribution and promotion outside their contract. The conflict, the ex-staffer said, would intensify after the label could no longer concurrently manage its artistes, with the signees constantly seeking clarity on their career status and overall brand direction.

Exits, when they go awry, can deal a devastating career blow to an otherwise thriving artiste. So was the case of the rapper Vector whose year-long tussle with YSG in 2013 cost him momentary career paucity.

His struggle began in 2013 after he lamented nonchalance on the part of the label towards his career and suggested that more professional hands be hired. It was said that he paid some music executives from his pocket to get things moving; later embarking on a self-sponsored vacation to the United States over which YSG would accuse him of signing another deal with a foreign music brand in what it alleged was a blatant contract breach.

The singer was shooting his scene of the Ghetto RMX video within his childhood neighbourhood in Obalende Lagos when some policemen seized him and his personal manager Michael Umoru for detention in Festac.

The label would secure an injunction stopping Vector from recording, composing, or releasing music as an artiste. For nine months, the musician battled the court order until both parties settled, with Vector buying out his contract in a tumultuous turn of events that the rapper would apologetically admit he regretted.

As for Wizkid, his ex-boss Bankole Wellington reopened old wounds when he told Ebuka Obi-Uchendu, the media personality, during a chat about his once-defunct label EME that the Afropop singer was still owing him three albums, having signed a five-project contract with him.

Wizkid established his own music label Starboy Entertainment in 2013, left EME in 2014, and secured a deal with the Sony-owned label RCA Records in 2016. He had revealed, albeit benevolently, that he had to exit EME without a penny.

Nigeria’s music industry is replete with feuds involving a clash of interests over a signee’s contract. There have been many such cases over the last decade alone, the latest being between Bad Boy Timz and Anonymous Music.

Some cases make the news; others whose subject lacks an inclination for protracted strife often keep a low profile, with the artiste sometimes going off the grid and their career ultimately nose-diving.

Deconstructing Nigeria’s artiste-label disputes

Artistes enter into various sorts of deals with labels, including 360 deals, mostly for budding musicians where the label pays signees an advance but is entitled to profits that accrue from streaming, concerts, songwriting & publishing, endorsement, and merchandise. The label then commits to promoting the artiste long-term. Others are profit-split deals, production or distribution deals, and joint venture deals.

Disputes between record labels and artistes most times revolve around revenue sharing, in which case the artistes end up breaching the terms of the contract they signed with their respective record labels.

Ajibola Ibaru, an IP lawyer, argued that artistes from humble backgrounds, without the oversight of an entertainment lawyer, scribble their signatures on any deal they’re offered from a place of vulnerability to stave off hunger but only realise they’ve been ripped off after they attain higher living standards.

In many cases, the artistes feel oppressed and want out, with contract renegotiation hardly happening. The bulk of their hits might be during their term as a signee, so they frustrate the contract until it elapses. Prior to deal expiry, some artistes can attain fame so much that the label becomes of little added value.

Regulatory inadequacies, Ibaru further added, enable both signees and labels to get away with contract violations.

“Royalties are unpaid. Signees are abused and they can do nothing. Artistes themselves are not paying the producers the monies they’re entitled to. Everyone is ripping another person off,” the lawyer said.

“It’s a cut-throat environment. The revenue sources that are open to abroad artistes/labels aren’t here. Recouping investor money is harder. Labels incur losses frequently, so they have to resort to milking everywhere possible.”

A breakout artiste might know very little about the music business and doesn’t understand that investments in them will be recouped with excess profits, so they’re more concerned about getting a better cut on revenue.

Other financial disputes that typically crop up have to do with concerns around rights ownership, how much is budgeted to drive the projects of label signees in a hugely competitive music market, transparency in expenditure done on the artiste, and the adequate reportage of revenue earned or shared among rights holders.

Many artistes also nurture feelings of dissatisfaction in cases where the affairs of one signee are given priority over those of another, where a working roster system isn’t in place to tackle unhealthy intra-label rivalry.

Kizz Daniel’s trouble with his ex-label G-Worldwide, it is reported, started with the success of ‘Woju’, a song that began to gain traction in early 2015. The label owned as much as his stage name. It was said that he initially signed a seven-year contract for five albums. By 2017, this had been revised thrice to reflect his growth in the industry.

In the first quarter of 2015, his revenue cut was upped from 30% to 40% of all net profit and non-performance income of 30% after rumours first had it that he was earning a paltry salary of ₦50,000 monthly. The music label also reduced his expected number of album releases to four. In 2016, his performance benefits were further upgraded to 40%.

The singer, who would be forced to give up his stage name (Kiss Daniel), exited the label in 2017 after repeated attempts, with his lawyers citing a discord over accountability and the label’s handling of the artiste’s finances.

Structure & the rise of one-man labels

The reoccurring pattern over the years has been for a signee to do an average of four years in a multiple rights deal and exit the label prior to or after the expiration of their contracts to create their own imprint and become self-signed—essentially wielding more control over the revenue that accrues to subsequent musical works—after they must have amassed enough industry clout to run the business on their own.

Nigeria’s music industry arguably defies the business model typical of the global mainstream. It requires more than fame and talent to run a record label, a fact evidenced by Olamide and Davido signing deals of different natures with Empire and LVRN respectively even as label owners in their own right.

A fraction of the solo pivots in Nigeria fall through. Others survive, ushering in one-man labels and ‘indie’ artistes.

In Nigeria, many indie artistes struggle to sustain momentum, partly due to the high costs and demands required to execute projects. A producer could take as much as ₦1 million to do song composition for an artiste. There’s the clothing allowance, food, and apartment costs. Songwriters can take as much as ₦500 thousand and more.

An average music video costs ₦5 million and could be as high as ₦10 million for well-sought-after directors. Note that this doesn’t guarantee ROI. Marketing takes a fresh budget, with one-man labels or indie artistes having to address playlisting, tapping local DJs to be included in mixes, and sometimes paying show promoters to get gigs.

Labels without a strong financial backing to sustain plans for six to 12 months find it hard to have a solid structure, argued Adedotun Adekanmbi, a marketing executive at the music-oriented media company Trace.

Some labels only exist online, which doesn’t invalidate them if the proper mechanisms are accounted for such as the producer, DJs, sound engineer, the A&R team for quality control, the accountant recording inflows & expenditures, the branding team to work on the signee’s appearance, and in-house officials handling such aspects as artiste development, marketing, legal affairs, and general business operations.

For Mavin, a label that prides itself as an independent powerhouse driving the ongoing Afrobeats explosion, it inked a multi-million dollar investment deal with the JV Kupanda Holdings, running a music academy to groom potential signees for over a year before they’re eventually offered a contract and unveiled to the public.

DMW and YBNL, the CEOs of whom started as indie artistes, have been able to put in place a much more informal structure/process still fortified with the right team players and network that make a label tick.

Music PR consultant Azeez Olalekan argued that this isn’t always the case with some others, referring to signees who do a protracted time in labels without deals, ultimately predisposing them to unfavourable contracts.

“Many artistes gain fame in Nigeria after an individual informally invests in them, at which point there is no contract yet. Some demand accommodation and a car, even when they’re yet to bring in revenue. When the singer starts earning for the label and is signed, the deal tends not to favour the artiste since the label is out to profit. But the signee is forced to accept the relationship,” the PR executive explained.

“Deals like this eventually lead to a misunderstanding. Once there’s no structure, both parties suffer.”

Olalekan said labels often lose court battles because they can’t detail expenditure done on the signee at the initial start of the investment; something he said is attributable to illegal inflows without paperwork.

He argued that labels could be lacking in accounting, A&R, music marketing, and other critical areas but have investors who use the company, its artiste, and their music releases to promote their social image.

Exit feuds & implications for local industry

Big shots in the industry don’t exist independently. They leverage the brand support that budding stars offer. Toxic exits, whose subjects go off the radar career-wise, arguably impact the local industry in the short term. This detracts from the wider pool of talents whose persona and brand visibility are optimised for export.

Aibee Abidoye, EVP at Chocolate City, argues in general that mass artiste exits can bankrupt a label since it’s a high-capital venture with slow returns, where a substantial understanding of music business processes is critical.

Contrarily, the music executive said such cases might, in the long run, force existing labels to gird up structurally, resulting in competition between indigenous labels, and ultimately attracting the needed attention to the local industry.

“It’s important that investors are given time to recoup but it’s also vital that we have the right people in the industry so talents don’t waste their prime away on people trying to figure it out,” she pointed out.

“Even the best businesses file for bankruptcy. It’s a learning curve for the industry on what not to do.”

But it’s not all gloomy. Budding artistes who have seen their predecessors exit unfavourable contracts with burned fingers and sabotaged careers are beginning to make more informed decisions about deals, seeking the verdict of qualified entertainment lawyers. This has made label-artiste contracts harder to reach on both ends.

Recording and management deals are a mainstay but more are now doing distribution or licensing agreements, with marketing support also inclusive based on their understanding of where they stand career-wise and what they need to further their brand.

“In Nigeria, we’re still trying to navigate the murky waters of the music business. To enable mutually beneficial deals between both parties, labels shouldn’t offer contracts that hold artistes for too long. Signees must also understand it’s an investment and get themselves educated about label operations,” lawyer Kayode Akinyeke said.