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you should see the contract that American Idol makes its participants sign...not just the winner, but all the participants in the Hollywood round and beyond have to sign a contract.

American Idol is more like a record label that signs a ton of artists and puts out releases in the form of weekly contest shows on which they perform.

I'm not going to go look for the actual contract, but there has been controversy about the American Idol contract for years. Out of all the shows you could have picked, why would you pick one involving recording companies? :)

Here's a excerpt from the American Idol Wikipedia page, talking about the contract:

"The contract the contestants are required to sign gives Simon Fuller's company the right to oversee not just the recording deal for "American Idol" stars, but also control any merchandising, touring, sponsorship and movie deals."