Fat Joe has admitted that he still owes money to his past record labels for albums released over 20 years ago.
Expanding on comments he made last year where he called the major label system a “Ponzi scheme,”” the Terror Squad rapper detailed his issues with Warner Records and Atlantic Records.
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Speaking on Instagram Live, Joe said: “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.
“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.”
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“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,” he continued.
“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 then explained the main benefit of being an independent artist: “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?”
Fat Joe previously criticized the major label system during an appearance at The Wall Street Journal‘s The Future of Everything Festival in 2023.
“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.”
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Joe continued: “I was talking to [Jennifer Lopez] about it and you know, J. Lo is a megastar and she was like, ‘Man, you know these guys, they only give you this. You never recoup, you know.’ So it’s a funny math, right?
“I would have to walk in the office to a guy who didn’t even really understand our art and culture. They just knew how to market and promote and make profit — how to make the most profit. I used to beg him, ‘Are you gonna push my record or you gonna really press the button?’”
