The point of the article challenges the way the major record companies do business. They are not known for their concern for quality product. 20% for a manager is OK I guess if they are really doing their job. My question is that in the case of a new artist, what is their incentive? They are not going to get that artist placed with a major label today.
In dealing with major companies, the new artist has no bargaining position whatever. They are entirely expendable and at the mercy of the label. The manager if he is unscrupulous, which many are, has an incentive to get a bad deal with a new artist. The manager loses very little if the artist doesn't make it. All that is required is for the manager to have the signature on the dotted line. If for some fluke the artist happens to click, than the investment has paid off.
The basic problem is the mentality of the artist who enters the pop music jungle. They are naive and want something for nothing. By this I mean, they want to play the game by their rules. They expect the label to bend over backwards for them just because they are signed. The carrot that is held over their head is that they might build a massive audience. The solution is not to play the game in the first place. There is an old industry saying "a % of nothing is nothing". But there's the added saying "a % of nothing is preferable to owing a large % to the company." Remember about owing your soul to the Company Store? Merle Travis knew what he was talking about.