Recod labels signin with bigger record labels?

[J-malice]

i want to know why you hear about lets say Cash Money signin with Univeral...or somethin like that i dont know if thats tru this is just an example.

but why do they do that and what are the pro's and con's of "signin" your record label under another one...Universal, Sony, and theres a couple other major ones.

i know it has somethin to do with being a good business move, but whats the good business about it? is there more security (as in financial) or stability?

 

[berserk]

you get money... you become associated with an already well established label... and you get money... but in the long run you are likely to get screwed...

 

[mercurywaters]

basically you put the financial, marketing, manufacturing, and distribution power of a major label behind your small label and work out better in the end. you can reach more people and make more money theoretically.

 

[monumental]

because there is record label small ones that get there music distrubuted by larger labels ie- aftermath/interscope

 

[God]

You've already touched on the distribution/manufacturing aspects of signing with a major distributor like UNI or WEA.

Also, if a big label sees potential in a small label, usually, the major will give the smaller label seed money in exchange for a large percentage of ownership in the company.

So, if you have a proven producer or manager that has some great acts, you can buy half of the unproven label for 2 million USD/EU or less, the owner gives up a portion of his company's shares to you... and after a couple of good albums, your 2 million USD/EU may be worth 50 million USD/EU.

Dr. Dre sold all his interest already in Aftermath to Interscope, and Roc-A-Fella is half owned by Def Jam.

Sincerely,
God

 

[berserk]

once again... god has spoken...

 

[nospe]

check it, now your a big label yourself so you could sign another label right?

(example) Shady/Aftermath/Interscope

(DAMN thats allot of money!!!!)

correct me if I wrong god!