Recoupment explained: why an artist with a hit can still be "in debt" to the label
A record advance is paid back out of your royalty share, not your bank account, so at a 20% royalty a $50,000 advance needs about $250,000 of revenue before you see another cent. Here is the arithmetic, what cross-collateralization and recoupable costs do to it, and what to negotiate before you sign.
Industryvia UK Competition and Markets Authority