Let’s set the scene: you’re an enormously talented vocalist who rose to prominence as the best selling female singer of the 1990s. As a reward, Virgin Records swoops in after you’ve left your label, Columbia, and plops down one of the largest record contracts in history—one that carries a monetary tune somewhere in the neighborhood of $80 million. Where do you go from here?
Well, if you’re Mariah Carey (and you’d better be, because the above events could and did only happen to her), you have an emotional breakdown, check into a New York hospital and check out of the limelight. Then, to top it all off, a few weeks later you release not only your most critically panned and commercially unsuccessful album to date, but you make that album the soundtrack to your semi-autobiographical flop of a movie of the same name, Glitter—which is thought of nine years later as one of the worst movies ever made.
The above anecdote isn’t shared just to pick on Mariah, who has since returned with a vengeance and, more importantly, a few good albums. No, it’s to illustrate the importance and, often, fallibility of record contracts. When Billboard magazine boasts that Carey was the Artist of the Decade in the 90s, it’s fitting that she gets that $80 million record deal. But, Virgin Records knew the dangers and wrote an opt out clause into said deal, and when Glitter tanked, Virgin used that clause to buy out the rest of her contract (reportedly for around $28 million).
Carey has said she made her decision to sign with Virgin based on money, and Virgin obviously understood that such a huge investment should come with a theoretical trap door if the artist didn’t deliver profitable returns. All of this is to illustrate how important it is that both parties understand the intricacies of the record contract they sign.