Fat Joe has revealed he still owes money to the labels he was signed to over 20 years ago.
During an Instagram Live session, Joey Crack reflected on comments he made last year referring to record labels as Ponzi schemes and spoke about the debt he has with Warner and Atlantic Records. According to Joe, these labels prey on artists looking for an opportunity by giving them money to record and taking that all back when it comes to shooting videos and more.
"They asked me independent or major label and I said major record labels are a Ponzi scheme. What does that mean, Joe? It means that when you as smart as me and when you been long enough as me you realize it's just like a bank," said Joe. "Most of the time they take a kid who grew up in the projects that's talented and give you money to make an album. Off the profit of the records, they charge you whatever they spend on the video. It ain't like we 50/50 partners; we pay half for the video, they pay half."
He continued, "At the end of the day, you could bring a scientist who won the Nobel Peace Prize to do the accounting and they can't figure it out. So it's robbery, all the way through."
Joe then explained how he still hasn't made any money off some of his biggest albums, including 2001's Jealous Ones Still Envy (J.O.S.E.), which sold over one million copies according to the Recording Industry Association of America.
"They own your shit. That's why I say it's a Ponzi scheme. I sold two million records, still ain't recouped. [2001's] J.O.S.E. sold two million records. When I get my statement from the major label 20 years later, I still owe them money," he said.
Joe then reflected on being an independent artist and the benefits that come with it, saying, "I put out an album independently on EMPIRE and get distribution. My album might sell 250,000, 300,000 records, I make millions of dollars off of it. What's the difference?"
Last year, during the Wall Street Journal's The Future of Everything Festival, Fat Joe spoke about how he views labels as Ponzi schemes before. He has spoke about the way business was conducted for him, which inspired him to go the independent route.
"I don't believe in these people. For one, I feel like the major label system is a Ponzi scheme and they do funny math," he said. "Whenever you try to see something in life, they say numbers don't lie. If you look at a chart and the numbers are so clear where you could say, 'The price of this is this, the price of this is this.'"
"And then when you look at a chart and they say 62.1 percent 1.2 — it's funny math. And so we never understood, we never recouped, you know, you had to be like the Fugees who sold 30 million records to make a dollar."
