Scotty McCreery and Lauren Alaina: Contract Details Revealed!

AMERICAN IDOL: Scotty McCreery and Lauren Alaina await the voting results during the season ten AMERICAN IDOL GRAND FINALE at the Nokia Theatre on Weds. May 25, 2011 in Los Angeles, California.  CR: Michael Becker/FOX

Update: Scan of Scotty’s contract: AI Contract Recording Contract, Merch Contract

American Idol winner Scotty McCreery, 17, and the runner-up, Lauren Alaina, 16, are both minors, which means their contracts with Idol have to be approved by a Los Angeles judge. That also means the contents of those contracts become part of the public record.

The Associated Press has all the details. Let’s examine the numbers!

  • Scotty will receive at least $250,000 in advances for winning the show and recording the first album.
  • He will also tens of thousands of dollars more for granting “Idol” partners likeness, merchandise and endorsement rights, and will also receive royalties on any music he releases.
  • Lauren will receive $87,500 for finishing second. The amount would be doubled if she records an album.
  • Jordin Sparks, who was a minor when she took the crown in 2007, received a contract that guaranteed her a $180,000 advance after the show and another $180,000 after delivering her first album. Oof. Scotty takes a pay cut!
  • S7 runner up, David Archuleta, (17 at the time) had a contract that indicated a payout of $360,000 total if an album was recorded, with an advance of $155,000–double that once he produced an album.
  • In some past seasons, winners were paid a minimum of $100,000 for merchandise rights, records show. Draft merchandise agreements for Scotty and Lauren give him $50,000 and her $40,000. More pay cuts!

Looks like 19 is on a tight budget!

The teens’ “Idol” contracts and recording deals require the show’s producers and partners to place 15 percent of their gross earnings in a trust account that cannot be touched until after they turn 18 years old.

  • iluvai

    I’m happy for them. They’ll have enough for college and then some if they decide to go that route. Plus as minors their interests are protected. I hope they both have a bright future. They seem like really great teens.

  • http://www.twilightslo.com Mateja

    MJ, in season 7, David Cook got $360K deal and 155K x 2 = 310K for David Archuleta.

  • musicality

    It’s probably due more to being burned by the winners. They got these lucrative contracts but didn’t deliver in sales.

  • Pam

    I’m happy for them. They’ll have enough for college and then some if they decide to go that route. Plus as minors their interests are protected. I hope they both have a bright future. They seem like really great teens.

    When I was watching the interview last night with Scotty’s parents, they mentioned that there was an understanding between them and Scotty that college is a priority even if he just goes part time. It seems they want to make sure he gets himself a good education and I think it’s a good idea. I’m happy for both them as well. They do seem like good kids.

    ETA: Yep, 19 is on a tight budget indeed. With the economy being the way it has been for a while and with the issues of past contestants not being able to deliver the goods I can see why the amounts are lower.

  • suziq

    Just curious, how would Lee and Crystal’s contracts have stacked up against these?

  • Kirsten

    I love contract leaks. Maybe we should have a teen in the finals every year.

    Man, is the show uber-cheaping out this year. Scotty is facing drastic pay cuts to even the contracts we saw leaked in S8. Scotty is getting $100K less in advances than Kris did (IIRC).

    I am more and more convinced that the $1K per tour date is legit.

    This show makes a bazillion dollars. The ad rates are through the roof. I can kind of get that they were nervous coming into this year what with the disaster last year was on all fronts and Simon leaving. People were expecint a 20-40% drop in ragins. So, even though they still make a bazillion dollars, they were nervous.

    I get that.

    But, since this year turned the show around and the tour seems to be selling well, how about some bonuses you cheap a$$es? And I just don’t mean to the three stooges you call judges. How about $1k per tour date with escalating amounts when the venue sells more than say 40 or 50% (whatever break even is). If it sells out, you get an uber-bonus.

    I know, the show thinks that they are already doing these kids a favour by show-casing them, but these kids also do them a favour by being interesting and getting people to tune in. Just ask Ken Warwick, your resident brainiac and he’ll explain to you just exactly how much the contestants are to blame for the show tanking last year (I don’t think it’s entirely their fault, but if Ken blames them when things are bad, he should give them full credit when things are good).

    One thing good about the lower advancements is that it might make it easier to retain the record contracts.

    Just make sure you get a decent investment advisers kiddies. This biz is tough, so you better maximize the amount of money you keep.

  • Kitwana

    How many albums has Universal/19 locked Scotty and Lauren locked in for? In the past, I have heard that finalists are locked in for anywhere from 3 to 6 albums – not to say that they will necessarily ever reach 3-6 albums :)

  • Elliegrll

    One of the reasons given for why the advances are more than what new artists usually get is that the contract binds them with 19 for twice as long as a normal recording contract would. I wonder if 19 evened things out by making the life of the contract shorter. For some reason, I doubt it.

  • gabriel oak

    These kids are doing the show a favor? I think just as many viewers were turned off by teen idol than those who were attracted to it.

  • tripp_ncwy

    I guess winning really matters now. :-)

  • Ratna12

    I’m happy for them. They’ll have enough for college and then some if they decide to go that route. Plus as minors their interests are protected. I hope they both have a bright future. They seem like really great teens.

    I really do believe that Scotty got the calmness from his parents.
    They also seem so relax, happy but not going overboard.

    And both got their first cars yesterday !!
    So cool.

  • Kirsten

    And both got their first cars yesterday !!

    Yep. With all the cheaping out UMG and 19Alphabet are doing, I got to hand it to Ford for stepping up and giving the best gifts ever (4 cars and their choice of whatever car they want).

    These kids are doing the show a favor? I think just as many viewers were turned off by teen idol than those who were attracted to it.

    No contestant is going to please everybody. Ratings are up, so that’s what counts.

  • wolfsbane813

    plus weren’t profits down for this year? i’m not surprised that the contracts were cheapened a bit. at the end of the day, it’s a business, isn’t it?

    at least these kids are getting to do what the want to do! hopefully they have successful careers ahead of them. I know i’ll do my best to support at least lauren. scotty has to prove a bit more to me, even tho i like him.

  • brie200

    While obviously we never can tell, I’ve been pretty impressed by what I’ve heard from Scotty and his parents so I hope he’ll be smart about managing the money aspect as well. He seems pretty grounded.

    It sucks for them, but I get why money is tight.

  • jrain

    This is a function of what the economy has done to the music business. 19M cut like 30-40% of it’s workforce last year. They need to tighten the belt bigger artists are having trouble with sales. Imo, they are giving them enough money to start a record but if they fail it won’t be a huge loss.

  • Elliegrll

    plus weren’t profits down for this year? i’m not surprised that the contracts were cheapened a bit. at the end of the day, it’s a business, isn’t it?

    They were down mostly because of Ryan’s huge raise.

    I can understand the change, it protects 19, UMG, and it could even help Lauren and Scotty in the long run.

  • Incipit

    They were down mostly because of Ryan’s huge raise.

    Heh. But would you say Ryan’s huge raise was offset by not having to pay Simon Cowell’s huge salary? I actually think they saved a little there. *wink*

  • Tess

    We all know what Idol grosses but do we have any idea what the show nets each year. Besides, just paying the idolettes doesn’t even begin to cover what costs are associated with the show and the tour. And I know, I know…the judges are paid exorbitant amounts of money (I wonder if their contracts are structured like athletes are….and what is wrong with someone getting 15 million for a season of work…Actors get that for a single movie….and corporate big wigs think that is pocket change and would scoff at that kind of bonus).

    My point is that we live in a country where economic freedom is king. If the kids didn’t want to work for pocket change they didn’t need to try out…if we think the show makes to much money we don’t need to watch it thereby lowering their market share and their advertising asking price. Isn’t basic economics a bitch.

  • Listening

    250K and 174K b/c i’m positive Lauren is getting an album deal is more than they ever thought they’d see before Idol. I’m impressed by their amounts.

    Oh and it’s cool that Scotty and parents are still talking college. I Know Carrie finished college but then she only had a few months left after she won so it was easier still laudable that she did it anyway though.

    How did we get David Cook’s payout amounts he’s not a minor?

  • Elliegrll

    We all know what Idol grosses but do we have any idea what the show nets each year. Besides, just paying the idolettes doesn’t even begin to cover what costs are associated with the show and the tour. And I know, I know…the judges are paid exorbitant amounts of money (I wonder if their contracts are structured like athletes are….and what is wrong with someone getting 15 million for a season of work…Actors get that for a single movie….and corporate big wigs think that is pocket change and would scoff at that kind of bonus).

    In comparison to what the show makes from sponsors, it’s not that expensive to produce, which is why there have been so many copycats. It’s a lot less expensive than most hour long scripted dramas.

  • sma11ie

    I love contract leaks. Maybe we should have a teen in the finals every year.

    How did we get David Cook’s payout amounts he’s not a minor?

    Yeah. And people are also quoting S8 amounts even though there were no minors in the finals. Or are finals not top 2, but the top 12/13? Cuz in that case, we have minors EVERY season. We should have leaks every season, no?

  • HR

    19 probably could afford to give them more money for the tour. I understand last year may have affected it this year but I agree with the bonus idea if they do well this year. The record contract winnings I’m okay with. The less money they receive the lower the threshold they’ll have to reach to pay it back and collect on royalties if they have any. I never have liked the idea of being indebted to the company for money most of them would never be able to pay back.

  • flyaway

    The key word here is ADVANCE. I understand the record part – not enough sales means payback like HR mentioned.
    How does that work with the tour though? Would all of the Idols be required to return part of their advance if sales aren’t up to par? Hmm.

  • http://emuisemo.pbworks.com eilonwy

    We all know what Idol grosses but do we have any idea what the show nets each year.

    FY 2010 pre-tax income for all 19 activities is $42.4 million on revenues of $213 million, or a decent 20% margin. This includes SYTYCD but not the Ali or Presley businesses. It’s not a perfect measure, but it’s the most precise that CKX’s 10-K gives. Cut that by 60% to allow for 19′s share of corporate interest on debt (lots of debt) and taxes, and you get a net of $17 million for the segment.

    I’m using OIBDA (operating income before depreciation and amortization) because entertainment businesses have insane non-cash D&A costs that really don’t affect their ability to do business — plus what we want to know is what cash is generated, rather than what shareholders get excited (or not) about. My back-of-the-envelope comes out a little different from what’s in the 10-K because CKX ran amok with non-cash corporate restructuring and writedown charges in 2010, and I’ve ignored them as irrelevant to the question at hand.

  • jing_ftw

    there was an understanding between [Scotty and his parents] that college is a priority even if he just goes part time. It seems they want to make sure he gets himself a good education and I think it’s a good idea.

    Sounds good but it is a mistake. College can wait a bit. He has to ride this wave as hard and for as long as he can. Of course, keep some money stashed away for college in case the music doesn’t work.

  • http://emuisemo.pbworks.com eilonwy

    Would all of the Idols be required to return part of their advance if sales aren’t up to par?

    Advances are not returned by the artist. The label assumes all of the risk of the loan: if sales don’t cover those costs, that’s lost money for the label. At the same time, the artist sees no royalties until the label’s take from sales has repaid the advance (recoupment).

    It’s not an accident that under U.S. accounting standards, advances to new artists are treated as expenses (wave bye-bye to the money, it is spent!), while advances to established artists who are likely to recoup is an asset on the balance sheet (it’s a property that generates income, just like a factory).

  • workdog

    $100000 IF they merchandise? I thought that the AI machine owned their images as part of the contract and no payment was due for that, especially with the merchandise. I know AI can use a contestant’s image forevah in relation to the show, etc., and they trademarked the names and images of the winners and maybe the ones they expected to produce for them in years past (Aiken being excepted as his lawyers trademarked his before AI could follow up…wise, imo…Bo maybe as well?) so is that not a given anymore? They have to pay now and the idolette could conceivably own his own image to a degree? Fair is fair. I saw where they get a cut of the tshirts, etc., at the venues, but I don’t think that covers it all and the 100 grand sounds different. Thoughts?

    And yeah, monetary gain for being on the show/winning/placing has depleted somewhat but it still is a hella shot for something more. Just don’t get too attached to your soul.:-)

  • abbysee

    Sounds good but it is a mistake. College can wait a bit. He has to ride this wave as hard and for as long as he can. Of course, keep some money stashed away for college in case the music doesn’t work.

    I watched the interview, they said they didn’t care if it took 10 years. I think that’s a plan. They are level headed folk. I admire that.

  • MrDuffin

    No contestant is going to please everybody. Ratings are up, so that’s what counts.

    That’s true….people like the circus..

  • Elliegrll

    $100000 IF they merchandise? I thought that the AI machine owned their images as part of the contract and no payment was due for that, especially with the merchandise.

    The deal was that the contestants received 100K up front in exchange for giving 19 the right to license their names and images.

  • Hazehel

    And people are also quoting S8 amounts even though there were no minors in the finals.

    Allison Iraheta and Jasmine Murray were minors. Presumably the contracts obtained by the press gave the amounts they can expect to get if they had reached the Top 2 or won.

  • Nina1

    With all the cheaping out UMG and 19Alphabet are doing, I got to hand it to Ford for stepping up and giving the best gifts ever (4 cars and their choice of whatever car they want).

    I’m gonna guess some Ford exec caught Lee and Crystal’s “Big woo” faces last year.

  • tripp_ncwy

    How did we get David Cook’s payout amounts he’s not a minor?

    Archie was a minor so the filing would cover the financials for both the winner & runner-up. The nytimes article from S8 stated the filing covered all the minors in the top 36.

  • panz

    This makes for interesting reading. Actually, I thought they got a whole lot more than this. Must be the tough economy.

  • rhed31

    That seems pretty low. Especially when the judges make so much money. Who watches the show for the judges? Well, maybe some people do but I think most watch for the contestants. I know the recent idols haven’t sold much but can’t they take some revenue from what the show makes as a cash prize separate from the record contract?

  • tessa

    How cheap. For a show that’s earning millions of dollars off of these contestants, these pitiful amounts are pretty shameful. How much do the judges and Ryan earn again??!

  • McCreerian

    Sounds good but it is a mistake. College can wait a bit. He has to ride this wave as hard and for as long as he can. Of course, keep some money stashed away for college in case the music doesn’t work.

    I watched the interview, they said they didn’t care if it took 10 years. I think that’s a plan. They are level headed folk. I admire that.

    Yeah I think if anything, he should do it part time/online. Where was this interview? I want to see it.

  • Listening

    tripp_ncwy, Thanks for the answer, I was just curious. Hmmm correct me if i’m wrong but the American Idol contestants are making more than the UK X-Factor contests right?

  • Mel1

    Haven’t we heard from enough idol contestants how hard they have to work after the show is over? I think it depends on how ambitious Scotty is about his singing career. If he doesn’t mind not getting many radio spins, minimal promoting, minimal touring, minimal success, then fine. Go to college part-time. Pursue your singing career part-time. It also depends on the degree. Some degrees require quite a bit more studying.

  • TwigLA

    I wonder if people who are really good and considering trying out for next year will be deterred by this. That’s a pretty hefty drop for both the recording contracts and the tour.

    Of course, what the judge approved says ‘at least’, so they can conceivably negotiate and make quite a bit more than that.

  • savgal

    So glad college is part of the McCreerys’ plan. Scotty struck me as the kind of kid who wants that degree. Hope he’s gonna take some AP tests like my firstborn and knock out some freshman classes, and there is CLEP, too, that has earned me a semester’s worth. I thought it was cool that Carrie finished her degree online and graduated from her school in OK.

  • Hazehel

    Hmmm correct me if i’m wrong but the American Idol contestants are making more than the UK X-Factor contests right?

    If the reports are correct, then you are wrong, at least for this year’s contestants. X-Factor contestants are reported to earn £100,000 (~US$160,000 depending on the exchange rate) each for their tour, whereas the kids this year may only make less than $50,000.

    Although X-Factor winners are supposed to receive a million pound recording contract, what they get however is less than that, figure from a few years ago was £150,00 in advance (around what Scotty gets, although it would have been higher a few years ago because the exchange rate was different then) –

    http://news.bbc.co.uk/1/hi/entertainment/7778138.stm

    Quite a few of the contestants last year were said to have been given this million pound contract.

    There are some numbers being tossed around about how much they can earn, for example it was said that Matt Cardle (the 2010 winner) can expect to earn £5 million in his first year as winner, although that is likely to be an exaggeration.

    Idol however makes way more money than UK X-Factor, so Idol is behaving incredibly tight-fisted towards the contestants. It is just cheap the way it is treating the kids.

  • fanaround

    Ah, contract detail day! I forgot the other annual post-idol traditions. Always so interesting and fans should make sure there’s always a minor in the finalist group. Definitely a paycut from the Cook/Archie and Kris/Adam(Allison the minor) days…

  • Buffynut

    Don’t forget it’s a new label, for Idol. Maybe this is the way Interscope does their deals?

  • tripp_ncwy

    Here are the S8 specifics;

    Winner:
    $350,000 total for his first album
    $100,000 to turn to a camera and shout, “I’m going to Disney World”
    $100,000 for Disney attraction participation and for taping a vocal performance for the Walt Disney World Christmas Parade television show.
    $100,000 advance on royalties 3 yr merchandising contract

    Runner-up:
    $350,000 total for his first album
    $75,000 merchandising contract
    $50,000 in fees from Disney World for the Idol Experience attraction.

    Other;
    Top 5 finalists each received $50,000 from Disney attraction participation
    Top 12 finalists could have earned $200,000 each for a first album and $50,000 from merchandising

    Other Earnings;
    Studio Recordings; one-time payment of $1,000 and a $1,000 advance on royalties for each recording.
    $1,011 for a one-hour show to $1,540 for a two-hour episode

    http://www.nytimes.com/2010/02/24/arts/television/24idol.html

  • tripp_ncwy

    S8 Record Contract Advances Escalations:
    Winner:
    Album #1: $350,000
    Album #2: $275,000 – $550,000
    Album #3: $325,000 – $650,000
    Album #4: $375,000 – $750,000
    Album #5: $450,000 – $900,000
    Album #6: $500,000 – $1,000,000

    Runner-up:
    Album #1: $300,000
    Album #2: $275,000 – $550,000

    3rd – 12th Place:
    Album #1: $200,000

    Note: All future advances dependent on the success of the previous album

  • Lucy1234

    3rd – 12th Place:
    Album #1: $200,000

    Note: All future advances dependent on the success of the previous album

    Thanks for the numbers updates from Season 8. I had forgotten the numbers. If those numbers are correct, Danny at 3d place would have gotten an advance of 200,000 and since his album has sold over 200,000, looks like the label did not lose any money hence why he is working on his 2d album. Same goes for Kris and Adam’s would have made money. Would be interesting to see the Season 9 contract numbers. I think Crystal will be okay at recouping the money but not Lee.

  • Elliegrll

    That seems pretty low. Especially when the judges make so much money. Who watches the show for the judges? Well, maybe some people do but I think most watch for the contestants. I know the recent idols haven’t sold much but can’t they take some revenue from what the show makes as a cash prize separate from the record contract?

    I don’t think that anyone tries out for American Idol with the sole intention of winning. The real prize for all of them is a record contract, so I don’t think they care too much about the amount of the advance. The advance probably doesn’t matter, since the labels will spend more or less depending on how invested they are in the people that they sign.

  • tripp_ncwy

    Lucy1234

    Along with the advance, there are also recording, promotion & music video costs that the artist is on the hook for all or a percentage.

  • Elliegrll

    Danny at 3d place would have gotten an advance of 200,000 and since his album has sold over 200,000, looks like the label did not lose any money hence why he is working on his 2d album. Same goes for Kris and Adam’s would have made money. Would be interesting to see the Season 9 contract numbers. I think Crystal will be okay at recouping the money but not Lee.

    I don’t think it’s this simple. Most new artists never see a dime from their first albums, and it was stated earlier that most labels treat the advances as a loss. Since the advance for AI alums had been higher than what most new artists see, I’d say that it’s highly unlikely that any of them made a profit for their label. I don’t think the labels only spent $200,000-$350,000 on anyone’s record, promotion, etc.

    I think Brian Mansfield wrote about this, and he said that based on what he knows about the industry, at the most, maybe just two or three of the former idols have seen any profit, beyond their advances, for their debut albums.

  • BlankSlate

    Can someone remind me now of the Top 11 and Top 13 lineup (in order of elimination, I guess)? Seeing them all on stage last night was nice. Some of the more forgotten ones now seemed to hold their own on the performances. Naima looks like she is BORN to be on stage.

    Please help. Thanks. My memory is a mess! (Okay, I do know the winner and runner-up.) ;>

  • J9BT

    BlankSlate says:

    05/27/2011 at 12:50 am

    Can someone remind me now of the Top 11 and Top 13 lineup (in order of elimination, I guess)?

    MJ does have a link at the top of the page for the Top 13 contestants, but in order of elimination, this is what I remember:

    13) Ashthon Jones
    12) Karen Rodriguez
    11 & 10) Thia Megia/Naima Adedapo (tied?)
    9) Pia Toscano
    8) Paul McDonald
    7) Stefano Langone
    6) Casey Abrams (previously voted out at 11th but judges saved him)
    5) Jacob Lusk
    4) James Durbin
    3) Haley Reinhardt
    2) Lauren Alaina
    1) Scotty McCreery

  • BlankSlate

    Thank you SO much, JB9T above. I so appreciate your quick response. I saw MJs links at the top of the screen but I didn’t see the contestants’ names in order of elimination. (If it’s there, I apologize MJ!)

    SO this means that Ashthon and Karen miss the tour, yes? After watching them last night, I’d think they would do well on the big stage.

    Naima seemed to be placed up front in the group songs. She has great stage presence.

    I’m thinking their summer tour shows may be more fun than one would have anticipated… I didn’t buy a ticket but if one magically appears in my hand, I wouldn’t say no. :>

    Thanks again for your help.

  • sue

    Idol is so dang cheap, maybe these guys should of waited to be on X-Factor, lol. Simon is offering $5 million. I thought the idol contract for the winner was at least $1 million. Maybe that was back in the days. These idols should demand more money, get an attorney and negotiate, they are worth more than that. After working for months on the show and giving the idol brand all this publicity they should be rewarded. Stop paying the judges/Ryan so much and give the talent on the show some coins. geezz

    Oh well I hope these guys do really well on their albums and sell a ton of records. I like how grounded Scotty is about going to college in Nashville on the side when he works on his music career there, smart kid.

  • cmc25

    This what is left of the pie after paying millions and millions to the producer Nigel, the lack-luster judges and the host Ryan.

    I supposed they should continue schooling while pursuing their music career. It’s better to have a back up plan nowadays.

  • sylmjk

    Well, Scotty will turn 18 this year, and will no longer be a minor. I wonder what kind of legal representation he had, that A-I is coming out with a contract worth less than Jordan’s or David Archuleta’s? I would hate for him to feel he has been taken advantage of, and he’d be well served when it comes time to negotiate for the 2nd and 3rd album to have aggresive representation. I feel he is going to make millions for A-I and he may seek advice from some of his personal favorites in the industry.