Sponsorship Scams
The Promise of “No-Cost” Music Careers
🧠 For independent artists looking to grow their music careers, the idea of securing sponsorship sounds like a dream come true. Companies like The Falcon Agency and Leballoo have taken advantage of this hope, promising artists that they can secure sponsorship deals that will cover all their costs, with no strings attached. They often claim to have partnerships with financial services like Affirm or, in some cases, with record labels that supposedly provide the funding.
What’s the truth?
Here’s the truth: this isn’t how the music industry works anymore. These claims are nothing more than elaborate scams that prey on artists’ lack of industry knowledge and desperation to succeed.
How Sponsorship Scams Work
🚩 These companies approach artists through cold emails, social media messages, or flashy ads, promising the moon and the stars. Their pitch generally includes vague promises like:
- “You’ll be sponsored by Affirm or a record label.”
- “We will distribute your music to all major platforms.”
- “We’ll run ads to drive traffic to your music.”
- “You won’t have to pay anything—we’ll make the money back through your streaming revenue.”
This sounds fantastic, but as you dig deeper into their offer, you’ll notice a lot of red flags:
The Affirm Sponsorship Lie:
Affirm is not the kind of institution that funds music careers. They’re a financial services company offering loans to consumers—not sponsorships. When companies claim they’ll “get you sponsored by Affirm” or another lending company, what they’re really talking about is taking out a loan that you, as the artist, will ultimately be responsible for repaying.
Streaming Revenue Doesn’t Pay the Bills:
These companies will claim they’ll repay the loan (or sponsorship) from your streaming revenue. Let’s see how that would look:
What Kind of Money Can You Make From Streaming?
🤓 Okay, let’s do the math: Spotify pays an average of $0.004 per stream. That means to earn even $1,000, your songs would need to be streamed 2.5 million times. Even if the loan was for a very small amount – say, $1000 – it would still take millions of streams to make that money back. And it takes a lot more than $1000 to get millions of streams.
Why This Business Model Doesn’t Add Up:
👀 If a company promises you they can cover costs through streaming revenue, they’re outright lying. There’s no feasible way to cover the cost of ads, distribution, and other services from streaming income unless you’re getting millions of streams—and even then, the income would be a fraction of what they would need to bankroll you.
How Much Money Does It Take To Break An Artist?
😱 It takes industry leading professionals approximately $150,000 to “break” an artist. If you received that money as a loan and needed to pay it back only out of streaming revenue – good luck. You’d need to get 375 MILLION streams to pay back the amount of money it took them to break you.
Vague Advertising Promises:
They often say, “we’ll run ads for you,” but fail to explain how, where, or what kind of ads they’ll run. Ads don’t make money—they cost money. The purpose of ads is to drive traffic to your music and build an audience over time. But like any other business, music promotion requires startup capital to be done effectively. These companies offer no specifics on how their ad strategy will lead to meaningful growth.
False Claims About Distribution:
They might say they’ll “distribute your music to all major platforms,” but the truth is, most artists are already doing this themselves through services like DistroKid, which charges a very low annual fee for unlimited distribution. These companies often claim that DistroKid or other distribution platforms are “taking advantage of artists,” but they fail to provide any concrete evidence or offer a more affordable or better alternative. DistroKid is essentially free, and they look especially benevolent when compared to these scam companies.
Empty Promises of Label Funding:
Even if they claim to have a record label behind them, this is still misleading. Record labels today don’t just hand out money to artists. When a label signs in an artist, it works more like a loan than a sponsorship. Click the drop down below to learn more.
🐰 Rabbit Hole:
How Record Label Funding Works
🕳 ️To Go Deeper into this Topic, Dive Down the Rabbit Hole!
🐰 Dive In
With a record label loan, the artist is responsible for paying the label back in a process called recoupment. During the recouping period, the label takes every penny the artist makes. This might come somewhat from streaming revenue, but that’s really just chump change.
In order to make their money back faster, labels also have a fun little thing called 360 deals, which are now the industry standard. 360 deals are a circle of revenue pipelines that maximize the label’s financial return in the shortest time-frame possible. That’s just business jargon, though.
To put it plainly, a 360 is a deal-structure that allows record labels to subject artists to various money-earning ventures, like commercials, brand deals, and random media antics, all so they can make their money back faster. Anytime you see an artist doing some random Dunkin’ commercial, that’s probably why.
No matter what it is you’re doing – if it’s making money, that’s the label’s money. At least until their investment is repaid. After that, it’s only mostly their money.
And as bleak as that sounds, the light at the end of that tunnel (recouping on that loan) isn’t within reach right away. It takes years to recoup, and sometimes it can a decade or more. That’s the truth about how record labels actually work.
Labels no longer hand out signing bonuses like they once did, and any company that claims they can secure label funding without strings attached is lying.
Sponsorships vs. Investors
It’s important to understand that legitimate sponsorship programs for independent artists simply don’t exist in the way these companies claim. In the business world, there’s a difference between a sponsor and an investor.
- 👟 Sponsorship: Companies like Nike or Red Bull might sponsor well-known, established artists for visibility and marketing purposes, but they do this in exchange for the artist promoting their products. This happens when an artist is already successful, not when they’re trying to break into the industry.
- 👔 Investor: Securing an investor to bankroll your music career is a legitimate method of funding, but investors are interested in profiting from an established, growing business. They don’t just hand out money based on hearing one song or “discovering” you online. You need to be a proven artist with a strong track record for an investor to consider funding your career.
If a company claims they’re acting as a sponsor or an investor and promises to bankroll your entire career without specifics, they’re likely scamming you. Real investors don’t cold-call artists through social media or email.
Why This Scam Preys on Artists
These companies are banking on one thing: your lack of industry knowledge. The music industry is complicated, and there’s a learning curve. If you don’t understand how labels work, how distribution works, or how streaming revenue is calculated, it’s easy to fall for the vague promises and grand claims made by these scam companies. They know that many artists are desperate for funding to take their career to the next level, and they exploit that desperation with offers that sound too good to be true—because they are.
🎩 Record labels no longer act as venture capitalists, and sponsorship’s from companies like Affirm are not a thing.
What these companies are really offering is (at best) a complete lie, or, (at worst) a debt trap. If they try to secure money on your behalf under your name, it will be through a high interest loan. It will be a situation where you’ll end up paying more than you’ll ever make from services these companies claim to offer.
What Artists Should Do Instead
If you’re serious about building your music career, invest in real marketing strategies. You can either hire a reputable marketing company with a track record in the music industry or learn to do it yourself. Platforms like Meta Ads (Facebook/Instagram) and Google Ads (YouTube) can be powerful tools if you’re willing to spend the time to learn them.
- Distribution is already easy and affordable. Services like DistroKid allow you to distribute your music to major platforms for a very low cost. There’s no need to pay thousands of dollars to a third-party company to do something you can handle yourself.
- Marketing can be learned, and there are legitimate companies that specialize in music marketing. But don’t fall for vague promises of “we’ll run ads” without any specifics on how that will actually grow your audience.
Takeaway
✍🏻 If a company promises you a sponsorship, loan, or funding in exchange for vague promises of growth, it’s a scam. Real sponsorship programs don’t exist for independent artists in the way these companies claim. Invest in yourself—either by hiring reputable professionals or by learning the skills necessary to market your music effectively.
Final Thoughts
Remember, the key to growth in today’s music industry is authenticity. Build your audience through real audience connections and smart marketing, not through the false promises of scam companies. Steer clear of anyone promising to bankroll your career or sponsor you as an artist at no cost to you.
Unless your already famous, a sponsorship is not going to be on your horizons.
Additionally, record labels no longer “invest” in artists or give them money. They loan you money. They’re essentially just loan sharks with better branding.
Affirm is a reputable credit institution. They also loan people money, but all you need to secure that kind of loan is decent credit. If you’re considering that route, do it through Affirm and not through some sketchy promo company.
After speaking with Director of Communications at Affirm, she has gone on record saying there is no affiliation between Affirm and companies like Leballoo or Falcon Agency. She also states that they have no artist sponsorship programs in place, nor have they in the past.
There’s no free money. Nothing in this world works that way, and least of all the music industry.
Stay in the loop,
– Music Scam Alert Staff
don’t get duped.
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