Understanding Common Clauses in a Record Deal — And Why They Matter

UNDERSTANDING COMMON CLAUSED IN A RECORD DEAL  —  AND WHY THEY MATTER

By

Barneveld Kelechi Emmanuel, aka Obama-Naija

Wizkid once said in an interview that when he left EME, he had no debt with the label. That line “I left with zero balance” has become gospel among upcoming artists trying to negotiate out of label contracts.

But many forget that zero balance doesn't mean full ownership.

Yes, he didn’t owe EME financially. But guess what he didn’t own either?

HIS MASTERS.

Two of Wizkid’s biggest albums Superstar (2011) and Ayo (2014) along with several early singles like Holla at Your Boy, Don’t Dull, and Pakurumo, are still controlled by Empire Mates Entertainment (EME). While Banky W might not personally own them, the label (as an entity) still retains ownership. There’s no public proof that Wizkid has bought them back or renegotiated partial rights just like Burna Boy did to his early catalogue with Aristocrat.

So while Essence, Ojuelegba, and Come Closer are under his own Starboy/RC deal, his foundational work, the catalog that built his legacy isn’t entirely his.

This leads us to today's topic:

Understanding Common Clauses in a Record Deal — And Why They Matter

For any artist (or manager) negotiating a deal, knowing what’s in the paperwork is not optional, it is compulsory.

Here are some of the most common clauses in a record deal, especially as they affect long-term control and income:

 1. Master Ownership Clause

This determines who owns the final recording (the "master"). In most cases, the label owns 100% of the masters because they paid for the production, mixing, marketing, and distribution.

Why it matters:

Even after you leave the label, the label can continue to make money from your music for life (and beyond). If your biggest song is under them, they eat forever.

What to negotiate:

Ask for a reversion clause (see below)

 2. Recoupment Clause

This explains how the label gets back the money it spent on you. Until that advance or investment is fully recouped, you won’t earn your share of revenue.

Why it matters:

You can be famous and still be broke if your earnings are tied to recoupment. Labels recoup from shows, streams, endorsements, etc.

What to negotiate:

Transparent reporting.

Limit what the label can recoup from, you can limit the recoupment to earnings from performance, mechanical royalties, lower percentage on endorsement and appearance.

Define a clear audit structure.

3. Reversion Clause

A reversion clause outlines when ownership of a song’s master recording will return to the artist after a specified period, usually between 5 to 15 years depending on the agreement.

Why it matters:

Without this clause, the label may retain ownership of your catalog indefinitely, even after you’ve fulfilled the contract or recouped the initial investment just like Wizkid and EME.

What to negotiate:

In practice, most labels are reluctant to offer a reversion clause especially in developing markets because masters are a long-term asset it one the label core interest when they are giving out a contract.

To navigate this:

a. Propose a Buyback Option:

If the label won’t allow full reversion, negotiate a clause that gives you the right to buy back your masters at a pre-agreed fee or fair market value once certain conditions are met (e.g., end of contract term or full recoupment or after 5 years of leaving etc).

b. Right of First Refusal:

Include a clause that prevents the label from selling your masters to a third party without first offering you the option to purchase them. This ensures you’re not blindsided if your catalog is sold off without your knowledge.

3. Negotiate Partial Ownership:

Even without full control, push for partial ownership (e.g., 10–30%) of your masters. This ensures that you still earn from long-term usage like sync deals, reissues, or catalog exploitation.

4. Exit Clause

What It Means:

The exit clause outlines what happens after the contract ends once the artist has fulfilled their obligations (e.g. delivered all albums or completed the contract term). It clarifies the post-contract rights, ownership, and future limitations (if any).

Why It Matters:

Most artists focus on what they get during the deal like advance, promo, royalty etc but forget to ask:

What happens when this deal is over?

If your exit clause is vague, the label may retain control over your masters, image rights, or even restrict you from performing or re-recording your songs. Many legacy disputes in music arise because artists never negotiated clean exits.

What to Negotiate:

a. Buyback Options

b. Right of First Refusal

c. Royalty Continuity – Will you continue earning backend even after exit?

d. No Post-Contract Restrictions – The label shouldn’t limit your freedom after the contract ends unless clearly justified.

5. Termination Clause

What It Means:

This clause sets the conditions under which the contract can be ended early by either the artist or the label and defines the consequences of early exit.

Why It Matters:

Many record deals contain lopsided termination rights that allow labels to drop artists quietly while making it nearly impossible for the artist to walk away. Some include “morality” or “performance” clauses that are vague and easily abused.

What to Negotiate:

a. Mutual Termination Rights – Both parties should have clear grounds to terminate, not just the label.

b. Label Default Clause – If the label fails to meet its responsibilities (e.g. no funding, no promotion), the artist can exit without penalties.

c. Cure Periods – Before termination, each side should be given notice and a window to fix the issue.

d. No Unreasonable Penalties – Leaving shouldn’t trigger extreme financial punishment.

6. Survival Clause

What It Means:

The survival clause lists the specific parts of the contract that will continue to apply even after the contract is terminated or expired.

Why It Matters:

Contracts don’t always end cleanly. Some rights and obligations like royalty payments, confidentiality, non-disparagement etc survive the contract. This clause prevents future disputes by specifying which parts remain active.

What to Negotiate:

a. Royalty Obligations Survive – Label must still pay you backend after contract ends.

b. Confidentiality Terms – What you’re allowed (or not allowed) to say after the deal.

7. Moral / Behavior Clause

 What It Means:

This clause gives a record label the right to suspend, penalize, or terminate an artist’s contract if the artist is found engaging in behavior that could damage the label’s reputation. It’s also known as a morality clause or conduct clause in legal contracts.

Why It Matters:

These clauses are often not clear, using words like "scandal," "immoral," or "disrepute" without defining exactly what qualifies. Labels can weaponize this ambiguity, especially when they want an easy way out of a deal.

Real-World Observations:

You ever wonder why Rema wasn’t openly seen smoking or doing “wild” things during his first five years under Mavin? It’s possible his original contract included a moral clause that restricted certain public behaviors to protect the label’s brand image.

But the moment he renegotiated and got more control? Baba dey post jumbo wraps with confidence. That’s what creative freedom looks like after a new contract structure.

Even deeper:

I once reviewed a real contract that explicitly banned smoking — yet the label signed an artist who already smoked heavily. They even allowed it during private hangouts. But when the relationship soured, guess what? They used that same non-smoking clause to terminate the deal.

That’s why you should never assume what’s written won’t be enforced.

What to Negotiate:

Clarify What Counts – Clearly define what “immoral” or “harmful behavior” includes (e.g. public drug use, violent crime, etc.).

Specify Proof and Process – Insist on a process: what kind of proof must be shown, and who determines a breach?

No Selective Enforcement – If a behavior was previously accepted or ignored by the label, they can’t weaponize it later. Include language that makes past acceptance a binding precedent.

🎯 Final Word

Wizkid's case is not a scandal. It’s just a lesson.

He left EME in peace. But the catalog that made him a star? Not fully in his hands. And that’s normal in most traditional record deals.

As a new artist or label owner, don’t just focus on the moment. Focus on the legacy.

Ask the hard questions:

Who owns the work?

When will I start earning?

Can I ever get my masters back?

If I leave, what still belongs to them?

The paperwork doesn’t just protect the label. It should protect YOU too.

✅ Tomorrow, we’ll talk about how to identify a good contract from an artist’s perspective — and red flags to watch out for.

Follow and stay tuned.

ABOUT THE AUTHOR

Barneveld Kelechi Emmanuel, better known as Obama-Naija, is a respected music business executive, writer, and content strategist in Nigeria’s entertainment industry. He currently leads as Head of Content and Nigeria Lead at Mayvibe.com, a music distribution and artist fundraising platform.

Obama-Naija is widely recognized for breaking down complex music business topics—from contracts and royalties to brand deals and rights management—into accessible, practical insights. His content is rooted in firsthand experience and real industry interactions.

Over the years, he has worked with several top artists and labels, directly or indirectly, but chooses not to mention most names publicly for discretion. However, his notable contributions include work with Chiké and Quadplay Band (Davido’s official band in Nigeria).

He is passionate about equipping emerging artists and music executives with the knowledge they need to thrive in the business of music.