RCA paid $40,000 to Elvis for what purpose?

• A. To release him from his previous contract
• B. To sign him to a new deal
• C. To produce his first album
• D. To fund a tour

Answer: (A)

The key idea is how a major label secures a rising artist by buying out the artist’s contract from a smaller label. RCA paid $40,000 to Sun Records to obtain Elvis’s contract, effectively releasing him from his previous agreement. This buyout gave RCA the rights to sign and record Elvis under their label. After the contract transfer, RCA could move forward with a new deal and release records, including his first albums with them. The payment wasn’t simply a direct fund for a tour or a standalone album; it was the step that freed Elvis from Sun and opened the path for RCA to control and promote his recording career.