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Fifth Harmony's New Deal: Quartet Re-Ups With Epic After Camila Cabello's Exit: Exclusive

Now a foursome, the label has exercised its option for a third full-length album, Billboard has confirmed.

The group Fifth Harmony splintered over the Christmas holiday, announcing on Dec. 19 that founding member Camilla Cabello, 19, was leaving the group to pursue a solo career and that the four remaining girls -- Ally Brooke, 23, Normani Kordei, 20, Dinah Jane, 19, and Lauren Jauregui, 20 -- will continue on as a four-piece. Three days later, Epic Records and Syco exercised their option on the pop act, Billboard has confirmed, moving full-steam ahead with a third Fifth Harmony album to be released in 2017. Cabello, meanwhile, is expected to drop her first single -- after appearing alongside Shawn Mendes and Machine Gun Kelly on two Hot 100 top 20 hits -- in April or May.

After selling 7 million U.S. digital downloads and nearly half-a-million albums (according to Nielsen Music), scoring a top five Billboard Hot 100 hit ("Work from Home” in 2016) and racking 1.6 billion U.S. on-demand streams in a career launched on Fox's The X Factor in 2012, Fifth Harmony has reached the sort of career milestone that graduates of reality shows rarely see. “There’s a stigma attached to a reality show that they have eclipsed,” says Joe Willis, longtime manager of American Idol winner Jordin Sparks. “That Fifth Harmony has been able to build their fan base, as One Direction did, was a masterstroke by Simon Cowell.”

And success provided the act the leverage to renegotiate what is typically an onerous contract -- signed by the girls as individuals before even stepping foot on the TV stage that would give them their Cowell-constructed shot -- with terms that dictate a length of seven years and assign them to specific companies and affiliates within the Sony Music system. (Syco Entertainment is a joint venture with Sony.)

“The standard contract is worse than a 360 nightmare,” explains Loeb & Loeb attorney Debra White, who negotiates similar deals for contestants of NBC's The Voice, adding that a company like the Cowell-founded Syco Entertainment "gets to be the record company, the publisher, the manager, they have a piece of touring and merchandise." Re-signing allows for a re-evaluation and offers an opportunity to diminish or eliminate terms that seem unfair to an artist who has had hits and brought the label revenue. According to a source, negotiations are ongoing, with the Fifth Harmony members having already reclaimed ownership of their trademark. Adds White: “If it were me, I would want a higher royalty rate; I would try to get all of the ancillaries uncrossed and limit the amount of product and length of the contract. I would also fight hard to increase the committed money for marketing and promotion, and creative approval.”

Representatives for Fifth Harmony would not comment beyond affirming that “Epic has in fact exercised their deal option with Fifth Harmony,” but a source in the camp says staying put is a win-win. (The group shared its first official photo as a quartet on Jan. 5, below.)

“They’re in a position to have more creative involvement and really direct where they want their music to go,” the insider offers. “They're a huge name on the Epic roster so it makes sense to keep them there and work on another hit album. While, at the same time it benefits the girls to stay as well and really own the direction they're going in rather than litigate themselves out of a deal.”

Another label source says Epic Records chairman Antonio "L.A." Reid “Doesn't ‘let go’ of successful artists -- ever. He even has a hard time parting with the unsuccessful ones.”

As for Cowell, a rep assures that he has remained "committed as ever to the group he envisioned."

The girls' contentious division -- made all the more awkward with both Fifth Harmony and Cabello signed to the same label and working on music separately but at the same time -- shouldn’t worry fans, either, says White. “It proves that Epic/Syco is really believing in the brand, and they don't give a shit if it's Fourth or Fifth Harmony. They’re going to find amazing songs and make a go of it.”