Short answer: a 360 deal gives a record label a percentage of an artist’s income beyond record sales, such as touring, merchandise, publishing and endorsements. “720 deal” is informal slang, not a legal category, for a 360 deal that reaches even further: bigger percentages, active control over those income streams, rights that survive the contract, or claims on the artist’s name, likeness and future ventures.
Labels say 360 deals let them invest in an artist’s whole career instead of just records. Whether that trade is worth it depends on the specific numbers and definitions in the contract, which is why two deals both described as “360” can be worlds apart. This guide explains how the structures differ and which clauses decide whether a deal is fair.
360 Deal vs. 720 Deal at a Glance
| Traditional deal | 360 deal | “720” deal | |
|---|---|---|---|
| Recorded music | Label owns masters and pays a royalty | Same | Same, often with longer terms or perpetual ownership |
| Touring, merch, endorsements | Artist keeps 100% | Label takes a share, often 10%–30% | Label takes a larger share, sometimes of gross rather than net |
| Publishing | Artist keeps (or signs separately) | Label may take a share of publishing income | Label may take ownership or co-publishing of songs |
| Control | Label controls records only | Usually passive: label collects a percentage | Often active: label manages or must approve deals in those areas |
| After the term | Rights end except master ownership | Usually ends, sometimes with a tail on income | Participation can continue post-term or cover future businesses |
How a 360 Deal Works
In a 360 deal, the label signs the artist, pays an advance and funds recording and marketing, just as in a traditional deal. In exchange, it takes its usual share of recorded music revenue plus a percentage of other income streams. Labels usually structure this in one of two ways.
Passive rights
The label simply collects a percentage of income the artist earns from touring, merchandise, sponsorships or publishing. It does not run those businesses. Most 360 deals signed by developing artists use passive rights.
Active rights
The label (or an affiliate) actually operates the business line, for example by running merchandise, booking tours or administering publishing, and keeps a larger share in return. Active rights can make sense when the label has real capability in that area, and they are where many “720” complaints begin.
What Makes a Deal a “720”
No contract calls itself a 720 deal. Artists and managers use the term when a 360 deal includes several of these features:
- The label’s percentage of non-record income is calculated on gross income, before the artist pays tour costs, crew, agents or managers.
- Income streams the artist built before signing, such as an existing merch business or already-published songs, are swept in.
- The label participates in income after the term ends, or in any business the artist starts in the future.
- The label controls or must approve deals in areas where it adds little, such as brand partnerships or acting work.
- Advances in one area are cross-collateralized against income in every other area, so touring income repays an unrecouped album.
- Name, likeness and social media rights are granted broadly or in perpetuity.
Clauses to Negotiate in Any 360 Deal
- Net, not gross. Define the base as income after the artist’s direct costs, agent and manager commissions.
- Carve-outs. Exclude pre-existing businesses, songs published before signing and income unrelated to music.
- Caps and step-downs. Cap the label’s percentage, or reduce it once recoupment or sales milestones are reached.
- No post-term participation, or a short, defined tail at a reduced rate.
- No cross-collateralization between record advances and ancillary income.
- Performance obligations. Tie the label’s share of touring or merch to specific support it commits to provide.
- Audit rights covering every income stream the label shares in.
Is a 360 Deal Ever a Good Idea?
Sometimes. A label with real touring, marketing and brand-partnership capability can grow the total income pie enough that a smaller slice is worth more. The deal is fairer when the label’s share is modest, calculated on net income, tied to actual support, and limited to the contract term. It becomes a problem when the label collects on everything but invests only in records. For the other deal structures and the full list of record-deal terms, see our guide to record deals and music contract basics.
Have a 360 offer on the table? Our New York entertainment attorney reviews recording contracts for artists and producers and negotiates the clauses above before you sign.
Frequently Asked Questions
What is a 360 deal in music?
A 360 deal is a recording contract in which the label receives a share of the artist’s income from sources beyond recorded music, typically touring, merchandise, publishing and endorsements, in exchange for its investment in the artist’s career.
What is a 720 deal?
“720 deal” is slang for a 360 deal with unusually broad label rights: a larger share of more income streams, often on gross income, active control over those businesses, or participation that continues after the contract ends. It is not a formal legal term; the contract language decides what the label actually gets.
What percentage does a label take in a 360 deal?
Commonly between 10% and 30% of non-record income, in addition to the label’s share of recorded music. The definition of the income base (gross or net) and the carve-outs often matter more than the headline percentage.
Is a 720 deal legal?
Yes. A 360 or so-called 720 deal is a private contract, and New York courts generally enforce contracts as written between the parties. That is why the negotiation before signing matters so much: once the contract is signed, getting out of unfavorable terms is difficult.
Can I get out of a 360 deal?
Usually only through the contract’s own terms, such as options the label declines to exercise, a key-person clause, a breach by the label, or a negotiated buyout. An attorney can review the agreement for exit points, reversion rights and any breach that gives you leverage.
Reviewing a 360 Deal?
Our entertainment attorney reviews and negotiates recording contracts for artists and producers in New York and New Jersey. Schedule a free consultation.
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