The story of MCA and Ms. Hennessy shows the dysfunctional economics of the music industry at work. MCA, one of Universal Music's major labels, initially hooked up with the spunky teenager three years ago because it was trying to get a piece of the great success competitors enjoyed with young pop artists like Britney Spears and 'N Sync. Ms. Hennessy, a native of Dublin, had released her debut musical effort, "Carly's Christmas Album," in Ireland at age 10, after performing all over Europe as Little Cosette in "Les Misérables." At 13, she was named the Irish national spokesmodel for the Denny sausage brand. Soon, she and her family began hoping for much more, and Ms. Hennessy dropped out of high school. "The most beautiful voice you'd ever heard -- and she would have ended up singing in the bath," says her father, Luke Hennessy, a real-estate investor.
Mr. Hennessy flew to Los Angeles in early 1999 and, after several months and a few intermediaries, got a disc of his daughter performing songs by various artists into the hands of established music producer Steve Dorff. He recorded a new demo of Ms. Hennessy singing some songs he had written, and it eventually crossed the desk of MCA's president, Jay Boberg, who says he found Ms. Hennessy's voice "extraordinary."
Although Ms. Hennessy didn't write her own music and hadn't ever performed solo in front of a big crowd, she had charisma, drive and pipes -- three things music executives say are most difficult to find in a single young performer. Mr. Boberg, 43, envisioned starting her off as a teen-oriented pop singer, in the hopes that she could one day develop into a more mature female vocalist along the lines of Celine Dion.
Over a long dinner at Spago with Ms. Hennessy and others in June 1999, Mr. Boberg and MCA's artist-development chief described their plan. Ms. Hennessy didn't object, even though she saw herself more as an edgy rock-and-roll performer. "This was my big chance," she says.
The executives offered her a six-album contract, under which Ms. Hennessy would get a $100,000 advance for her first album, plus $5,000 a month in living expenses while the album was being made. The label would own the recorded music and would front the cost of recording and promotion.
For Ms. Hennessy to make any more money, the label would first have to recoup its advance, its recording costs and half the cost of any music videos, as well as her living expenses -- meaning the album would have to sell between 500,000 and 700,000 copies, MCA says. At that point, Ms. Hennessy could collect royalties amounting to 15% of sales. But she would still owe a cut to a phalanx of producers and managers, as well as other record-company fees -- leaving her with at best about 80 cents to $1 per album, MCA says.