Planet Money Records, Inflation song, and the music business : Planet Money We got our hands on the long-lost "Inflation" song, and now it's time to put it out into the world. So, we started a record label, and we're diving into the music business to try and make a hit.

(This episode is part two of a series. Listen to part one here.)

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Planet Money Records Vol. 2: The Negotiation

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We got our hands on this old song a few months ago called "Inflation" by this band in Baton Rouge called Sugar Daddy and the Gumbo Roux.


They recorded it in 1975, but it was never released. And we liked it. So we decided to resurrect it.


SUGAR DADDY AND THE GUMBO ROUX: (Singing) Inflation is in the nation, and it's about to put us all away.

GONZALEZ: This is part two of a series. If you haven't listened to part one, here's what you need to know.

BERAS: Everyone from the old band went on to have good careers in the music industry, except the singer, Earnest Jackson.

EARNEST JACKSON: I've never been signed by a label. That's my hope and dream.

BERAS: So we're getting into the music business for Earnest Jackson. We're going to be the record label he never had. All the old band members are in - the keyboardist.

KINNY LANDRUM: He's one of the best singers I know.

BERAS: The guitarist.

FREDDIE WALL: Yeah, I said, Earnest, I'll do whatever I can for you, you know, to help you achieve this.

GONZALEZ: So that's how episode one ended - now, episode two. The first thing we need to do is some real record label stuff. So we fly down to Baton Rouge and show up at Earnest Jackson's front door.

BERAS: So we have something for you.

JACKSON: What is it?

BERAS: What do you think it is?

JACKSON: Oh, my God. I don't have any idea. Just look like a briefcase, you know? I know one thing - it sure can't be no suitcase full of money. I don't know if my heart would take it.


GONZALEZ: I wish it was a suitcase full of money, Earnest.

JACKSON: (Laughter).

GONZALEZ: I wish we could give you a suitcase full of money.

BERAS: We don't have it like that.



JACKSON: Oh, is that the contract? Is that the contract?

GONZALEZ: All right. So it might not be what you were expecting, but we have decided that we are going to try to be a record label for you.

JACKSON: Have you ever produced anything?

BERAS: I have never produced anything, no.

JACKSON: Yeah, because I don't think you're ready for that.

BERAS: We were not ready. Hello, and welcome to Planet Money Records. I'm Erika Beras.

GONZALEZ: And I am Sarah Gonzalez. You've heard the inflation song. You've heard the story behind the inflation song - behind the singer himself, Earnest Jackson. Now we want the whole world to hear the inflation song.

BERAS: But the music business is harder than we ever thought. Fractions of a penny get divvied up in more ways than you could possibly imagine. Lawyers, accountants, the talent, the label - that's us - everyone gets a piece of that penny.

GONZALEZ: Today on the show, we want to make "Inflation" go up - off the charts. We want to get this song onto every service, into every earbud, make a whole bunch of money and make Earnest a star.

All right. We want to be a record label - release a song. We've obviously never done this, so we're going to need a guide.

BERAS: So we call up a lawyer to the stars.

DON PASSMAN: Well, I talked to Stevie not too long ago.

BERAS: This is Don Passman. And for the record, that Stevie is Stevie Wonder. Don negotiates record deals for a lot of big-time musicians.

PASSMAN: I don't like to talk about clients' names. It's just - it's a sense of sensitivity to their privacy. But you can say it because those things are all public.

GONZALEZ: (Imitating clearing throat) Taylor Swift, Adele, Quincy Jones, Stevie - Don's been at this for 50 years.

PASSMAN: But I do have a lot of gold and platinum records.

BERAS: Were they, like, you know - clients were like, thank you, you helped make this gold record possible?


BERAS: Oh, wow. OK.

GONZALEZ: Like, signed?

PASSMAN: No, they don't sign them. They're...

GONZALEZ: Oh, you don't sign gold records?

PASSMAN: No, you don't sign them. They're framed behind glass.

GONZALEZ: No one signs the glass, even.

PASSMAN: I have not seen it.

BERAS: Oh, good to know. OK.

PASSMAN: Nor have I asked, for that matter.

GONZALEZ: Right. You don't want to be, like, fanboying...

PASSMAN: Exactly.

GONZALEZ: ...With your clients.

PASSMAN: Although, of course, I got into this because I am a fanboy, because I love music. I always have.

GONZALEZ: Don wrote the book on the music business. Like, literally - it's called "All You Need To Know About The Music Business."

BERAS: So we fill him in on our big plan. And our first question is, can we even do this?

GONZALEZ: Wait, can we be a label?

PASSMAN: Sure, why not?

GONZALEZ: Like, what do we have to do to be a label?

PASSMAN: Say you're a label (laughter).

GONZALEZ: All right. We're a label - Planet Money Records.

BERAS: We have to formally register with a bunch of official music rights organizations - even had a logo made - you know, standard label stuff.

PASSMAN: No. There's nothing standard about anything you're doing.


GONZALEZ: Why is it not - like, what are we doing wrong here?

PASSMAN: You're not do anything wrong. You're just doing something unusual, which is, you know, taking a very old recording and sprucing it up to release it.

BERAS: Apparently, one of the main things a label does is record a song, like, pay for the studio time and engineers and producers, the musicians. They make the recording happen.

GONZALEZ: But we already have a recording. It was made in 1975. So what we want to do is apparently not in any way typical. Normally all of the who-gets-what contract stuff between the talent gets negotiated before a song is made. We have to do it backwards. So that's the next thing we need to do. We need to figure out who has a stake in this song.

BERAS: Songs are split up into shares, kind of like stocks. Usually, the songwriter gets most of it. But there are other musicians on the song, right? There's a whole band, so it could go a million different ways.

PASSMAN: Who wrote the song - Earnest?


BERAS: Earnest wrote it.


BERAS: They all played together pretty regularly. So they were kind of a band, not like...


BERAS: Yeah.

PASSMAN: Well, if they were a band, that may be different. If they consider it a band project, they may want an equal share, and that becomes a negotiation...


PASSMAN: ...Between them and Earnest.

BERAS: I see.

PASSMAN: And I wouldn't get in the middle of that.

BERAS: So we call up all the old band members from Sugar Daddy and the Gumbo Roux, and we get all the right signals that this is going to be an easy deal.

LANDRUM: Technically, "Inflation" was Earnest's song and not mine.

BERAS: That's the keyboardist, Kinny Landrum. The guitarist, Freddie Wall - yeah, he told us the same thing.

WALL: It was his song, and none of us owned any of it.

PASSMAN: Yeah. Then it should be pretty simple.

BERAS: That's Don again, the music lawyer.

PASSMAN: But if they're difficult and say, no, I want a piece of it, then you'd need to make a deal with them.

GONZALEZ: I think they're all going to be like, let's just do it for Earnest - right, Erika?

BERAS: Yeah. We hope so.

GONZALEZ: Yeah. I think so.

BERAS: We hope so. Yeah.

GONZALEZ: I think so. So Planet Money Records starts writing a deal for Earnest. And Don says, a typical record deal, even for an established musician, is this. The musician gets 20% of what a song makes. The label gets 80%. So if we were acting like a real record label and we made $100...

PASSMAN: The artist would get 20%, or $20.

BERAS: And we get 80?


BERAS: That seems unfair.

GONZALEZ: Yeah. It seems like a bad deal for the artist, right?

BERAS: But Don says you have to keep in mind the label's the one doing all the behind-the-scenes stuff - marketing and promotion, negotiating contracts. The label is the one taking the legal and financial risk. These are all the things we have to do as Earnest's label.

GONZALEZ: So I think we're, like, a nice record label, and we don't actually want that much money.


GONZALEZ: We, like, want it for Earnest.


GONZALEZ: So, like, he gets 80%; we get 20%?

BERAS: Yeah.

PASSMAN: No. That's - it's - nobody would make that deal, ever.

BERAS: Oh, no.


PASSMAN: That's kind of a dumb deal. Is it a good financial move? No. Is it a nice thing to do for Earnest? Absolutely. But, you know, to take a risk and to do all this work and effort, that's a pretty thin slice of the pie. You know, 80 is pretty hefty to give away to the artist. I would go so far as to say, congratulations; that may possibly be the worst record deal I've ever seen, from a record company point of view.


BERAS: Well, thank you so much.

PASSMAN: You're welcome.

BERAS: I didn't think I'd be able to make the worst record deal that anyone's ever seen - but, you know?

GONZALEZ: Yeah. But, you know, the only reason we're making this deal is because we want to explain how the music industry works.

BERAS: And one reason we can give Earnest more money than he would get from a typical record deal is because there are a couple ways a song can generate money. One is through the record label, and another is through the publishing company, or acting as both so that if the song makes money, we would have more pots of money to pull from.

GONZALEZ: Yeah. We'd have more money to give to Earnest. So we write up this deal where we probably won't make any money, put it into that briefcase you heard at the start of the show...


GONZALEZ: ...And head to Baton Rouge to hand-deliver it to our artist.

JACKSON: I'm going to tell you right now, I'm going to sign this contract (laughter).

BERAS: All right.

GONZALEZ: No matter what's in it.

JACKSON: Believe that. No matter what, I'm going to sign this contract.



JACKSON: I'm going to tell y'all something right now. I got some songs in my heart, y'all.

GONZALEZ: Well, I will say we are only releasing one song, "Inflation."

JACKSON: Turn it loose. Turn it loose.

GONZALEZ: Earnest is so ready for this. And, like, listen, it is not a normal deal 'cause - right? - the song was already made. So we're kind of, like, renting this song for a few years to try to see if we can make it a hit. So our big thing is going to be distributing the song.

BERAS: We're not going to press any vinyl records right now. We're not going to give Earnest an advance for signing with us. That's how it would have worked in 1975. But today you don't really do that. You don't invest this kind of money in an unknown artist. You wait to see how the song does.

GONZALEZ: In 2022, you start by just uploading the song to every music streaming site there is. And we tell Earnest, it is not going to be easy to make any money. To make money, people need to stream the song. They need to listen to it - a lot of people - over and over. Every time someone streams a song, the big, music-streaming sites, like Spotify, Apple Music, Tidal - they pay out between a third of a penny and a full penny per play. And not all of that always goes to the artist. So it is not a lot of money.

BERAS: At one point, Earnest told us he would love it if a million people heard "Inflation," the song. So we figure that's a good goal. There are actually calculators out there where you can figure out, across all the streaming sites, how much money you can make on your song, how much you can make in royalties. That's what it's called.

GONZALEZ: Erika, Let's do the math. How much money would we all make?

BERAS: Let me pull up my little calculator here.

GONZALEZ: OK. All right.

JACKSON: Yeah. Yeah.

BERAS: So I'm pulling up my little royalty calculator.


BERAS: So if a million people listen, we make $4,000. OK.

GONZALEZ: If a million people listen, you get 3,200.

JACKSON: Eighty percent - I get the 80%.

GONZALEZ: You get the 80%.

JACKSON: And y'all get the 20.


BERAS: Not a ton of money - so I don't know. Maybe our goal should be 10 million, so he can get to 32,000 or a hundred million.

GONZALEZ: No, no, no, Erika. That's like a third of the country listening to the "Inflation" song. We would, literally, have to be, like, "Despacito" status. So I don't know. I'm thinking we should have a smaller goal, like, 10,000 listeners. Earnest could make $32? Yeah. No, no. We need at least a million listeners.

BERAS: It turns out, though, however much we make, it's going to have to be sliced and diced in more ways than we expected.

GONZALEZ: We just gave Earnest Jackson his contract with Planet Money Records. But there are other musicians on this song - right? - a keyboardist, a guitarist, a drummer, a bass player. And Don Passman, our music biz lawyer, says, normally, you do pay the musicians, also.

PASSMAN: Now, they don't have to get the same thing Earnest does. In fact, they shouldn't.

GONZALEZ: Don says, the singer gets most of it, especially because, in this case, the singer wrote the song and the melody. The band was kind of, like, backup. So in this situation, Don says, you generally give the musicians, the band, a flat fee for playing on the song. They're what's called session musicians. And then those session musicians waive their rights to the song. So we need waivers for the whole band.

BERAS: And we'd been in touch with the guitarist and the keyboardist. But one of the people in the band is now super famous, Randy Jackson, from "American Idol." He was the bass player on the song back when he was in high school. And the other person, Roy Hebert, the drummer - he died 30 years ago. But he still has a stake in the song. So we had to track down his estate. And we found it - his widow, Ann Hebert-Turner.

ANN HEBERT-TURNER: If Earnest can reap the benefits of anything that he created, I'm all behind it.

BERAS: She said releasing the song would be kind of like a little something, something for Earnest.

HEBERT-TURNER: There's a term in south Louisiana called lagniappe, and it's kind of like a baker's dozen. You get a little extra something that you weren't expecting, and that's kind of what this is.

BERAS: And, on behalf of Roy, signed her waiver the next day - The next Gumbo Roux member was Randy Jackson. And we did actually talk to him on the phone. He was super cool, very chill. He said, yeah, he'd signed whatever.

GONZALEZ: So we were feeling pretty good about all this. Like, this is actually going to happen. I'm on the phone with the guitarist, Freddie, talking about these waivers. And he's kind of like, OK, this waiver thing - you guys are taking this way too seriously. He says the band didn't even have any kind of agreement amongst themselves back then. So he's like, waivers are not even necessary.

WALL: I don't know why there's a waiver because we didn't sign anything. There's no waiver needed there. We didn't sign any contracts. There's no contracts. So you don't need any of that. But, you know, Kinny and I said, whatever you all need, we'll sign.

GONZALEZ: Thirty minutes later, we are still on the phone. Erika emails over the waiver, and something changes for Freddie.

WALL: Whoa, whoa, whoa, whoa. Wait a minute. Wait, I'm getting blown up. It says here, Beras, Erika, waivers for "Inflation".

GONZALEZ: The guy who 30 minutes ago was saying we don't need waivers is now saying hold up.

WALL: Let me see what's going on here. Heads up waivers. The first one...

GONZALEZ: That's our waivers.

WALL: On behalf of - second is - the second one is permission to use your likeness.

GONZALEZ: Freddie basically tells us this is getting way more complicated than I thought it was going to be. I thought you guys are just going to upload this song for Earnest. Now there's, like, official paperwork, and he's sort of like, I obviously can't sign this without sending it to my lawyer.

BERAS: The next morning, I get a call from Kinny, the keyboardist. He's not happy.

LANDRUM: Well, the contract as written is completely unusable.

BERAS: At some point, Kinny kind of becomes, like, the rep for the band, and we're a little confused how this waiver thing broke down.

I mean, when we spoke with - when we spoke with Freddie, he said, I'll just sign whatever. I just want to do this for Earnest. I just want Earnest, you know, to finally get his due.

LANDRUM: I - obviously, once he saw the piece of paper, he didn't feel that way.

GONZALEZ: OK. We kind of messed up a little. Our waiver was supposed to come with a fee, like the way Don told us, a session musician fee. We thought we sent that, but apparently, our waiver did not spell out that fee - so, like, pretty bad, right? We're a bad record label. But actually, in the end, Kinny said a fee wouldn't have made a difference anyway. He has actually made his career as a session musician, getting a few hundred dollars here and there in these fees. But on a song that might make some money cause, say, a podcast is promoting it, Kinny says he would never sign over his rights for a fee.

LANDRUM: Owning a piece of the publishing on a song that might conceivably do some - make some noise is worth more than $300.

BERAS: Kinny doesn't want a session musician fee. He's saying, I don't think we were session musicians on this song. Yes, Earnest could have called up anyone to play behind him, and they would be considered session musicians. But Kinny is saying I don't think it would have sounded the same. So he wants a real share in this song.

LANDRUM: Fifty percent of the publishing. I want 50% to be divided among the other four entities.

GONZALEZ: We should explain. There are two ways to own rights to a song. Think of it as, like, two pies. One of the pies is pretty straightforward. It's a copyright on the sound recording, meaning, like, on the recording the band made when they all played together in the studio that day. That's one royalty pie. The second royalty pie is a little more complex. It's a copyright on the song. But there are two ways to get paid out of this pie. There's the songwriter share for the person who wrote the lyrics, wrote the melody, and then there's the publisher share. Kinny the keyboardist is saying he wants the band to have a piece of this slice of the royalty pie, the publisher's share.

BERAS: So not the part that has to do with writing the song, not Earnest's part.

LANDRUM: Earnest did, in fact, write the song. He wrote the words. He wrote the melody. And he deserves all of that because he did it.

GONZALEZ: So you're not taking from the singer-songwriter pot of money.

LANDRUM: We're not taking from the songwriter pot of money and only from the...

GONZALEZ: And you don't want that.

LANDRUM: Right. And we don't want that. We just want from the music publishing part.

BERAS: And this, this is the part artists in the know often want in on. This is the part that can conceivably make money.

LANDRUM: The amount of - the amount of income generated by this thing, which may not be - hell, I don't even know if it's going to generate $200 on the publishing side. I don't know, but I don't care.

BERAS: You saying like you think it may not even generate $200, I mean, when I said a million listens, that was, like, best-case scenario. That was like if we...

LANDRUM: Yeah, I know. I know. I know. I'm not stupid. I routinely get checks for movies that I've scored. Forty minutes of music pays me, you know, $14. I know. I got it. But there is the other possibility that does exist that is not out of the realm of possibility, that if the song becomes some kind of hit, that could generate thousands. And I know that's true.

BERAS: Listen, we are not trying to give anyone a bad deal. We believe artists should get credit for their work.

GONZALEZ: Yes, we do.

GONZALEZ: But Don, the music lawyer, says for the musicians to get this much of the song is actually not standard at all.

GONZALEZ: But, look, they're the talent, and the talent is not happy. So to make this deal happen, we have to make them happy. This is what we wanted. We wanted to be a label. And as a record label, Don told us, we don't want to get in the middle of determining who gets what share of the song. The band should figure all that out and agree on it. So the band starts negotiating. Kinny and Freddie tell Earnest what they want, and Earnest thinks the band should get something.

JACKSON: Of course, they should get something. Of course, they should get something. But if their intentions were in the first place to revive me - let's use that word. They was telling me, like, you know, Earnest, if anybody deserves something good to happen for them, it's you. That's what they were telling me, you know? I'm not saying they shouldn't get nothing. Yes, they should get something. But, you know - let them have it. It's all right with Earnest, OK? And let's get the ballgame on, OK?

GONZALEZ: The band figures it out. They decide on the new splits, which determine how all kinds of royalties are paid - the royalties for merch, the royalties for downloads. There are a bunch. And they all have incredibly technical names like the public performance royalty on the underlying music composition.

BERAS: And this one is a good one to focus on because it's pretty representative of our new deal. Here's what it is - for this royalty bucket, Earnest will get 67.5% of the profit. The rest of the band splits 17.5%, though Randy Jackson wants to give his split to Roy's widow. And we get the remaining 15%.

GONZALEZ: So if this song makes $4,000, just in royalties from this little royalty bucket, Earnest will keep $2,700. The rest of the band gets $700 split amongst them, and we get $600. There are many different royalty buckets, though, and they all get split up in different ways. So accountants will spend the next few years splitting up this little sliver part of a song and that little sliver part of a song and divvying up fractions of pennies to cut checks to everyone in the band for years.

BERAS: This is what we got ourselves into - way more lawyers and way more accountants than we were expecting. Kinny's kind of like, yeah, that's the price of getting into business.

LANDRUM: Well, I hope we have a hit. It'll all be worthwhile if there's a hit. That's the bottom line in this business always. I hope we have a hit.

BERAS: What if we don't (laughter)?

LANDRUM: Well, then - well, then, if you don't, it hadn't cost anybody anything but a little bit of time at this point.

GONZALEZ: Well, it costs us a fair amount.

BERAS: Yeah, we've spent some money.

We have already spent at least $10,000 on lawyers alone, but, oh, well. We went all in on this song.

GONZALEZ: Yeah, we did. And Earnest is ready.

JACKSON: It feels damn good. Let's see what happens.



BERAS: We are happy to announce we have dropped our single. You can finally hear "Inflation," the song, in its entirety on Spotify, Apple Music, YouTube Music, TIDAL and Amazon. It is out there. It's everywhere.

GONZALEZ: It's everywhere. So far, it has been listened to 21 times on Spotify, and probably most of that is me and Erika and James, our producer. James has been jamming out to the song. So we need all of you to listen to this song, too, for Earnest.

JACKSON: So, yeah, stream it. You know, get it online. Pull it down. You know, listen to this song.

BERAS: The song is called "Inflation" by Earnest Jackson and Sugar Daddy and the Gumbo Roux, brought to you by Planet Money Records. If you go on Spotify under songs, search "Inflation" and Earnest Jackson, and you'll see his song.

GONZALEZ: We are trying - we're trying to make "Inflation" the song a hit, which is honestly going to be an uphill battle. Spotify is one of the biggest streaming platforms, and less than 1% of songs on Spotify have gotten over a million streams. But - but we have learned that if we can get to just 5,000 streams on Spotify in the first week that the song drops - so right now - that'll put Earnest in a special category of artists where we can start paying to promote his song, which we want to do.

BERAS: But we need 5,000 listens in the first week on Spotify in order to do that. So PLANET MONEY listeners, go listen to that song. Stream it.

GONZALEZ: And stream it, and stream it, and stream it, and stream it.

BERAS: Tell everyone you know to listen to "Inflation," and let's see what happens.

GONZALEZ: We're going to sit back and track this song, and when there's something to say, we'll be back to tell you about it.


SUGAR DADDY AND THE GUMBO ROUX: (Singing) Inflation, why don't you get out the nation?

GONZALEZ: Today's show and the entire series has been, like, super produced by James Sneed, who is basically a real record label producer here. He also had help from Emma Peaslee and Willa Rubin.

BERAS: The project manager on this series is Emily Kinslow. Sam Yellowhorse Kesler helped fact-check. This episode was mastered by James Willetts. And Josh Rogosin remastered the original "Inflation" song.

GONZALEZ: Jess Jiang edited the show. Many thanks also to Ashley Messenger, Anastasia Tsioulcas, Matt Sullivan, Rob Sevier and Mike Nishida (ph).

BERAS: Also Erica Clayton (ph), Rachel Swanson (ph), Sasha Fominskaya and Kaz Fantone.

GONZALEZ: And thanks to Robert Smith for being a consultant on the series and for letting us use a very special PLANET MONEY briefcase to deliver our record deal.

BERAS: Again, the song is called "Inflation" by Earnest Jackson and Sugar Daddy and the Gumbo Roux. Go listen to it. I'm Erika Beras.

GONZALEZ: I'm Sarah Gonzalez. This is NPR. Thanks for listening.


SUGAR DADDY AND THE GUMBO ROUX: (Singing) Inflation, why don't you get out the nation?

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