Last week Jay-Z told Allison Samuels of Newseek, "I wanted to set them straight (kids) on the likelihood of them making it," I broke it down to them by saying that they even had a better chance of being an NBA player than they did a rapper. I was, like, 'Keep it real - there are about 200 or more NBA players getting a check. There are only about 10 to 20 rappers that are in the game making money with album after album. Do the math and get your education'. Jay-Z was basically saying that rappers are not getting paid anything like the public thinks, which reminds me of the type of statements I heard while interviewing Wendy Day, rap industry insider, economist, and deal broker who says "99% of rappers never recoup and artist are broke, essentially living off of borrowed money." For most rappers the only money they make is what they receive as an advance, from there it's economic sharecropping for their labels and the industry.
Wendy Day of the non-profit organization RapCoalition.org is an expert on the economics of the rap industry. She is not a lawyer but she knows the rules, regulations and industry as well as any one. When she brokered the deal between Universal and Cash Money Records she got a call from Cash Money's new attorneys telling her she had done such a spectacular job that they couldn't find any area to renegotiate in the 75-page business plan. Her deal garnered Universal $17 million and Cash Money approximately $75 million over two years.
When asked about her, the founder of Blackelectorate.com a hip-hop oriented websites that specializes in finances, had this to say about Wendy Day, "no one understands the intersection of Hip-Hop culture and business better than Wendy Day and Rap Coalition and we know of no one who has the Rolodex to go with it. From graffiti artists and underground MCs who don't have a record deal, all the way to the biggest record label executives and most powerful lawyers in Hip-Hop, Wendy Day knows them, has worked with them all and understands what makes them tick."
If you ever read any of her essay's on rappers finances , then you understand that the money your typical rapper is going to be get comes from ring tones (recent ), endorsement deals from soft drinks companies or video games (recent), etc but traditionally and in most cases it is touring. Day has about 5 websites and approximately 3 of them focus on hip-hop from a financial perspective. Her goal is to empower artist (rappers to be more specific) because most believe, talk and act like they are powerless, but they simply don't know their power. She says artists hold the real power because they make the actual commodity: the Music. Rap Artists have been convinced for so long that they have no power, they begin to believe it.
If you think that the world of hip-hop political punditry is all male and black, you are mistaken. Most hip-hop wizards are known for what they write but very few are known for what they do. When it comes to Wendy Day you don 't really have to ask anybody all you have to do is look at her work to get a hint at how she is shaping the Hip-Hop industry. Bruce Banter sat down with Wendy Day to talk about the mathematics of Hip-Hop.
Wendy Day - Attention to Detail
Playahata.com: What were your thoughts on the Vibe Awards Fiasco?
Wendy Day: My politically correct answer is It’s a bad reflection on hip hop whenever something like that happens but at the same time I also feel like they have no right to complain. I hold Vibe responsible for a lot of the whole east coast west coat stuff that jumped off a couple of years ago so they can’t really complain that some shit jumps off, at one of their events. The Vibe Awards can’t really complain about the bad press. For so long, things have happened at the Source Awards, other events but they shouldn’t even think about complaining.
Playahata.com: Speaking of The Source, Benzino has been sort of gloating that this melee happened, he said he was going to sit back and watch, and was just hoping that the media treated Vibe the way they treated The Source. In the past The Source had heralded you as one of their 30 most powerful people but I was wondering do you read them now and what hip-hop publications do you read?
Day: I Don’t read anything hip hop related because we don’t have any journalism in hip-hop. If I want gossip, I will listen to what kids on websites are saying or I will get it right from the horse’s mouth or get it off the Internet. I won't get in from the rap publications. Every now and then somebody will send me an electronic copy of something that is upcoming in one of the magazines like Vanessa Staten (Deputy Editor of XXL Magazine) just sent me her cover feature on Chingy. Because she and I have a relationship. When I get it like that, I read it. However I can’t recall the last time I picked up something off a newsstand and when I did it was Murder Dog magazine, to me that’s the truest to the streets
Playahata.com: Have you peeped the new magazine, The Ave Magazine, it's slogan is "a street movement in print"?
Day: No, I have heard of them but I haven’t yet seen it, is that James Bernard's magazine?
Playahata.com: No, it's not Bernard, to my knowledge but I find that he does have his hands in a lot of stuff, I would not be surprised to find out that he is behind the scenes. However it's interesting that you are the second hip hop pundit that said they don’t read any Hip hop magazines. In any event. I had come across an article in one of these magazines and one of your former clients said some negative things about you. In specific, it was Baby from Cash Money he was talking about you in one of these pubs - he said you took credit for his deal or something like that. Do you worry about artist speaking negatively about you and it affecting the work that you might do with others?
Day: Fortunately everybody knows the truth about that
Playahata.com: What’s the truth?
Day: After I did the deal they decided to not pay me even though we had a contract. I ended up suing them so they paid me. It took me three years before I could get paid. I was initially bothered that I even had to go that route. As I watched Juvenile, Turk and BG all leave cause they ain't get paid, I learned not to take it personal. They just don’t pay people. Seeing those Juvenile, BG etc leave took some of the sting out of it. So I got paid. It doesn’t matter what Baby says cause he is a puppet, what matters is what Doug Morris and Melvin Winters (guys who run Universal) say about me.
Playahata.com: Who are they?
Day: They run Universal. They are who I brokered the deal with.
Playahata.com: Switching gears for a second. What are you doing you have so many websites. What about all your websites take us through some of them - www.industryreport.com, www.truthaboutprisons.com, www.indielabeluniversity.com, www.buildmorewealth.net, www.beyondthehype.com.
Day: Industry Report first appeared in late 90’s. Its like a report card on the industry and discusses how many rap releases a label puts out each year and how many are sold. Its raw numbers ranking of how successful the rap record labels are but I had taken it down cause it was a little confusing unless you are really into it data. It's going but up with a different presentation but its being worked on by a developer for free, so it's taking a little while.
Beyond the Hype is basically interviews with people in the Industry, the behind the scenes, the people who are really good at what they do. It highlights them. So many radio promoters and people involved really suck at what they do but I don’t want to blow them for being frauds I just want to focus on the good stuff. This will be in depth journalism on the behind the scene aspect. I have some kindred souls from independent record labels who will be writing and giving good advice, they will tell in depth stuff about why they hired somebody, a start place of what to expect look for, cost etc, It won't be any puff pieces to highlight people this will be real stuff.
Build more wealth is for artist who already have income (getting paid). It’s about wealth building. [It] Will feature articles some written specifically for the music industry but some about wealth building, it's more of a research site for people who want to maintain their wealth with stuff about offshore companies, banking relationships, tax information.
Truth About Prisons, well the Justice system is my hot button issue, we all have them. On Twista's Album, Adrenaline Rush (1997 album). I had written an essay on the liner notes on his CD, about the prison system in America. I went off. There was so much feedback. I had to do this site. This site will be a unifier sites for positive prison reform, this site will unify the justice system, prison system, tie all the grassroots prison organization together, judicial reviews, it going to be like 1-stop shopping on the net bringing all the prison information together.
Playahata.com: Now Wendy when I look at your resume and see all the artist you have worked with, I figure that you should be rich.
Day: I should be but I am not driven by money so I don’t focus on money; I don’t focus on taking more of the pie. I focus on achieving results that are not based financially. I know that seems weird and how different I am. Not saying my way is the right way. There are plenty of months I can’t pay my rent. And I realize how stupid that is saying that to you. If money were my focus, I could have a mansion and a yacht. But I did not enter the music business for the money I got into the music business to help people. So by my measuring stick I am hugely successful but by my accountant’s measuring stick I am a tremendous failure.
It’s funny thou this weekend I was meeting with David Banner, now here is the first time that after a deal was over I kept a great relationship with the artist. That’s sad. David Banner is the 1st artist in the last 12 years, I have kept a relationship with after and I realize how sad that is. If you look at Cash Money we don’t speak, No Limit we don’t speak, Eminem we don’t speak although that is different because that is just because he is on a different level. So when David Banner just announced last weekend that I will be running his production company “Banner Beats”. I was shocked but if their is anybody I would work for him, it's him. It’s really cool that David Banner wants to help Rap Coalition. He was like “what you do is so important and you need a steady income and this will give it to you and not suck up all your time and how cool is it for an artist to think like that. Honestly, artist mentality with me is usually “how can I use this bitch to get what I need”.
Playahata.com: Some of the artist you worked with in the past, you couldn't work with now because a number of them are in jail. You can’t work with C-murder, Rass Kass, Pimp-C, etc but has it always been money that has soured your relationships with artist?
Day: No actually that was only with Cash Money, with other artist the conflict was over trying to get them to do the “right thing”. Creators Way which was Twista original label I was working for them pro-bono I was never supposed to be paid I was happy to just be down for example I helped make Twista’s company about a million dollars in 2 months. I thought the money was going to be reinvested and given to the 9 people who were working for free. Then one of the 3 partners was buying new house, new car and people were still working for free, I gave them 30 days to fix it, they didn’t and I left. It's more of those sort of things that makes me walk out of the door. In this industry there is a pathological thinking that surpasses even greed these folks won’t give you anything even what you earned. It’s like I am not going to give them anything. In basic business you pay to the supplier in this case the artist is the supplier but they have the mentality of give nothing. If Juvenile is my biggest artist, common sense says at least give him the 1 % of the 1% cut but they try to keep everything. Even a pimp buys his ho a fur cut when she is about to leave in the music business they don’t even do that.
Playahata.com: Independent Vs. going with a major label, what do you recommend?
Day: It depends on the artist personality and their ability. I would never tell somebody to start their own label if I thought they didn’t have the hustle and entrepreneurial sense to do it. Provided they have some hustle, I advocate that because artist ownership of their company is where the money is. Now If you signed to Universal, Sony etc You going to make 12% on average of the retail selling price - after you pay back all the expenses - and you have no say so in how or where that money is spent, so you are at their mercy. If you put out your own record through an independent distributor you will make 8.50 per CD but you all have to do all the work. Now with the major label equation what it usually boils down to Is that 99% of rappers never recoup. After they pay back all the expenses the only money they make is the initial advance paid by the record company. That could be 25,000 or if you somebody really big like Jay Z or DMX it could be in the millions.
Playahata.com: Let’s take the case of Mase and Shyne both of these are sort of big named artist and neither one's album has gone gold, at last check both were in the 400,000 plus range, what are the chances that they made any money from these sales?
Day: Wow that’s low, that’s news to me. At that low level I don’t know that either of them could have recouped. Lots of money was spent at radio and making a video. Mase was flying across the country; he wasn’t taking a tour bus from city to city promoting his album. He was traveling like he was Puffy. It didn’t make sense financially.
Playahata.com: What about Shyne, he was on lockdown he couldn’t really blow money right - although he said in a jail interview over phone he had brought a quarter million dollar car and he had a friend driving it until he came home.
Day: Shyne - even thou he was on lockdown, a lot of money was spent at Radio Stations, promoting his album. A lot of money was spent on Shyne. T-Shirts by the label, I saw his stuff everywhere. Def Jam always spends a lot of money. They know they going to get it back.
Playahata.com: So even these guys got no more money from the label?
Day: Not from the label, but they can get money other ways, tours, ring tones and endorsements. Def Jam vendetta the video game was a way that rappers could get paid by having a character on the game an artist could get like 5,000 dollars. That is artist income.
Playahata.com: One rapper you know, Professor X, formerly of X-Clan was renting himself out for a day on Ebay. It seems kind of obvious that he didn’t make much money in his rap career or he didn’t manage it well. To most fans, especially younger people in today’s rap community, they accustomed to seeing rappers in a more lavish light of 'Bling' and floss so that act seemed really destitute. Can we expect similar acts of desperation from once great rappers, is this the future for rap legends that don’t go platinum?
Day: I don’t know if we can expect Ebay but what I think what happened is he probably got an idea and said let me try this and see how it goes. But anytime you try to sell something you have to promote it properly whether it’s on Ebay, TV, the Internet, etc. People are not typically surfing on Ebay looking to spend a day with Professor X. Anything that you do, you need a marketing push behind. Things have to be promoted properly. That’s how people are going to hear about it. Without a promotional push behind it he is not going to get the type of response that he would want, in fact I think I only heard about it on Playahata.com.
Playahata.com: Ironically Professor X got very upset that with Playahata.com on that issue, when we were just spreading the word he felt like our reporting of it was dissing him because we highlighted it in our newsletter or put it out there that he was auctioning himself on Ebay. He had a fiery exchange with one of our people. All that was actually reported was what he himself had posted on Ebay, we linked to it. He might have been ridiculed on our message board though.
Day: That’s funny because I didn’t take it as a diss. I heard about his auction on playahata.com and I went to Ebay site to bid on him, I don’t recall but I think I bid like 100 dollars or whatever on him on him. Its not like I needed to spend a day with him or anything, I mean I been there done that. Actually Both X-clan and Eric B & Rakim are the reason that I started Rap Coalition; they were my two favorite groups at the time. I saw what was happening with them at the time on their label and I wanted to help
Playahata.com: Speaking of Eric B and Rakim, last month a mainstream survey by Entertainment weekly rated the Paid in Full album as the greatest rap album ever With this sort of success fans still read about how even these guys received very little or almost none of the money, almost a year ago the duo was suing Def Jam. Eric B. believes that Paid in Full - in its initial incarnation, re-releases and special editions has raked in more than $100 million from sales and licensing Yet he is saying they were not getting anything, how does an artist get caught out there like that?
Day: An artist gets caught because they don’t know how the system work, it is set up like share cropping, you have to pay back all monies that are spent and if you don’t know that you don’t think about how money is being spent. I recall (years ago) being in the hallway at Tommy Boy, years ago, I saw Capone and Noriega and they had just shot a ½ million-dollar Hype Williams video. As they walk past me, I turned around very nonchalantly and said “ you know that 50% of the video budget comes from your money right” and they turned around in shock and Noriega was like “what, what” in shock. As time wore on I wondered were they shocked that I said that out of the blue or did they really not know that because at the time they didn’t know who I was, well maybe Capone did.
So again unless you sell millions and millions of records it takes a lot of time before the artist little 12% to pay some dividend. If you have a standard 12 point deal you gonna have to pay back millions of dollars in money that was spent to pay radio, studio time, to shoot video from your 12% royalty.
Playahata.com: What about an artist like DMX who’s popular, because he seems to back up what you have said, I mean that’s basically why he has retired , he feels like Def Jam was robbing him (nothing outside of his advance) but we see him with fancy cars and lavish trappings so how much is he making off of tours?
Day: It Depends on the artist, I can't just say a number, it's not that easy. It depends on what the market place is calling for. So I can't say DMX in specific but lets say a DMX tour today is not as profitable. As when he was in his hey day. These things change for example LL Cool J was just here in Tennessee. When I heard he was coming I was thinking “I wonder what stadium he is going to be at”. Then I heard that LL was going to be at a Night club and that really fucked me. I was feeling old cause to me, LL is a star it's hard to imagine him playing in a night club that holds 1,000 people as part of some cigarette tour but that blew my mind that his value would only be in a venue that hold 1000 cause I would have guessed that more than 1,000 people would want too see LL Cool J. I expected him to be at one of the local stadiums.
Playahata.com: Some of the larger artist like 50 wouldn’t do a club now but what about the up and coming artist like Chingy or T.I.
Day: Before they would do small venues but now they're doing 3,000 people venues and now Chingy [is] doing large venues and now that T.I. has a song with Jay-Z he gets more radio play so. So he gets more commercial radio play and the more commercial radio play determines how hot your single is and that means he can command more per performance, I personally liked his CD last year and he will be doing stadiums soon, I think.
Playahata.com: Do artist ever come to you and want you to listen to their work and give feedback?
Day: Yes and no but my taste in music is more lyrical. For example my Favorite rapper is Rass Kass, he’s very lyrical, he can only sell about 50,000 units but I am out there buying ten of'em. I love him, he’s very lyrical and intelligent but that’s my personal taste in music. When C-Murder sits down and plays me his music for me, he knows how I am and his market is almost opposite of my taste but he wants me to listen to it anyway but he knows he is not lyrical he is a “gangsta rapper” he is not trying to be lyrical that is not his market. I am not their market, artist are not making music for me, they realize that I am not there market although Freddie Foxx has made me some music but we are cool like that. There are some artists they can care about selling 1 record or a million but many of them are making music to feed their family.
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