What is a 360 deal?

The plain-English version

Imagine you sign a record deal. You expect the label to take a cut of your streams and vinyl sales—that is standard. But then your tour starts selling out, your merch table is buzzing, and a brand offers you a five-figure sponsorship. Under a traditional record contract, that money is entirely yours. Under a 360 deal, however, the label is standing there with their hand out, ready to take a cut of those earnings too.

A 360 deal—sometimes called a multi-rights agreement—is a contract where a record label participates in all of an artist's income streams. Instead of just making money from the physical and digital distribution of master recordings, the label takes a percentage of touring, merchandise, publishing, endorsements, sponsorships, and even acting or writing roles. Here is the breakdown of how these deals work, why they became the industry standard, and how to decide if one is right for your career.

The mechanics of multi-rights agreements

The mechanics of a 360 deal are simple but far-reaching. A label will typically divide your career into separate income buckets. For master recordings, you get your standard royalty split (often 15% to 50% depending on if it is a major or indie deal). But then the contract defines ancillary income streams.

• Live Touring. The label might take 10% to 25% of your gross or net touring revenues.
• Merchandise. Live branding, shirts, and physical items sold online or at shows are subject to a 15% to 30% cut.
• Publishing.The label may demand a piece of the songwriter's copyright or publisher's share.
• Endorsements & Syncs. Brand sponsorships, commercial synchronization licensing, and even fan clubs get swept into the mix.

Why do 360 deals exist?

Why did these deals become so popular? In the early 2000s, file sharing and digital piracy devastated CD sales, which were the lifeblood of record label profits. Labels realized they were spending millions of dollars to break an artist, only to watch the artist make their real fortunes on live touring and merch—areas where the label didn't touch a cent.

To survive, labels pivoted. The argument they make today is that they are investing in your brand as a whole, not just your recordings. Since their marketing and promotional muscle builds the celebrity that drives ticket sales and sponsorships, they argue they deserve a piece of that action.

Active vs. Passive participation

Whether you should sign a 360 deal depends heavily on what the label actually does for those extra cuts. If a label is offering “active participation”—meaning they have an in-house merchandise team that designs, manufactures, and ships your shirts, or an in-house booking division that manages your tours—their percentage can be justified. They are actively working to generate that revenue.

However, if they are asking for “passive participation”—where you or your manager does all the work to set up tours, hire designers, and negotiate brand deals, and the label simply receives a check at the end of the quarter—you should push back. Passive cuts should be negotiated down as low as possible, or avoided entirely.

Key negotiation strategies

When negotiating a 360 deal, there are three main battlegrounds to keep in mind:

• · Exclusions. If you had a successful clothing brand or an acting career before signing, exclude those existing streams from the deal.
• · Cross-collateralisation. In a poorly drafted contract, the label might cross-collateralize your touring income against your recording advance. This means if your album hasn't recouped, the label can take your touring profits to pay down your recording debt, leaving you with no cash to pay your live band. Always demand that live income and master royalties remain in separate, unlinked accounts.
• · Sunset clauses. Make sure the label's cut of non-record income ends when the contract term ends, or phases out quickly. You do not want them taking 10% of your touring revenue ten years after you part ways.

Is it right for you?

For most indie artists, a 360 deal is something to approach with extreme caution. If you are already building a self-sustaining touring and merch operation, signing away 20% of your gross ticket sales to a label that has never booked a gig is a quick way to go broke on the road. Touring margins are notoriously thin once you account for travel, crew, gear, and management commissions. Giving up another chunk of that revenue can make touring financially impossible.

However, if a label is offering a massive advance, global marketing support, and has a proven track record of elevating indie acts to the mainstream, a carefully negotiated 360 deal might be the launchpad you need. The key is understanding exactly what you are giving up—and ensuring the label is earning their share through active, measurable work.