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Fat Joe Had Some Inflammatory Thoughts About The Major Label System, Calling It A ‘Ponzi Scheme’

It should come as no surprise that rap veteran Fat Joe thinks “the major label system is a Ponzi scheme.” Over the course of hip-hop’s 50-year history, rappers have often shared their grievances with record labels and the people who conduct the business of marketing — but not making — music for the masses.

Q-Tip of A Tribe Called Quest coined “Industry Rule #4080” way back in 1991, and since then, everyone from Chance The Rapper to Megan Thee Stallion has spoken out against the current system. Russ said record labels would become “obsolete” while Meek Mill questioned their accounting practices, while Kanye West once attempted to make details of his deal public.

So, when Fat Joe appeared at the Wall Street Journal‘s The Future Of Everything Festival on Thursday, May 4, and used his platform to blast the recording industry as it’s currently constituted, his arguments came from a long list of complaints filed by a continuum of artists in the hip-hop space.

“I don’t believe in these people,” he said, according to HipHopDX. “For one, I feel like the major label system is a Ponzi scheme and they do funny math. 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.”

To back up his claim, he recounted an instance in which even Jennifer Lopez, who he said is “a megastar” complained to him that her records “never recoup” — which means to earn back the initial advance payment a label gives an artist to complete an album.

Of course, there’s a lot of ego involved as well; Joe recalled being disturbed by having a poster of him at the Atlantic office replaced by one of T.I. after T.I.’s album outsold his, which… shouldn’t be surprising, all things considered. But rappers, who often don’t come from a business background, are always going butt heads with the folks whose jobs involve strategizing to ensure their music actually does well in the marketplace.

After all, thousands of new songs and albums are being uploaded daily and the average listener is only going to ever be aware of a fraction of a fraction of them. But when you think you’re the best, you kind of take it for granted that everyone will check for you, without ever being able to justify why. That’s hip-hop, and you’ve gotta respect it. Still, he’s got a point about how the splits work out, and there’s probably a better way to run this industry. Unfortunately, there’s little incentive to change it now.