Based on my memory, like a lot of musicians in the "good old days", the record label cut him out of everything and actively hid royalties from him. The documentary "Searching for Sugar Man" goes into more details. As i recall they find the producer but can't find the money. Great Doc check it out. Also found this " One of the dramatic highlights of the film is when the interviewer confronts Clarence Avant, the label’s owner. “What happened to all of the royalties?” the interviewer asks. Avant becomes visibly agitated and is unable to offer a satisfactory answer to the question. "
I've seen the film when it came out and was listening to Rodriguez before it came out, but my memory must be failing me, as I thought he only sold like 10 albums in the US and hence no royalties, but how he got famous was bootlegged tapes and records in South Africa.
"In conclusion, while there may have been duplicity at Sussex, most likely the reason why Rodriguez never got paid royalties is because there were no royalties to be paid"
That was the heart warming thing for me, he never sold out and never knew he was famous. We all would like to imagine ourselves as such, and we'd never know the difference :)
BUT, the "record deals" often were so bad that they didn't have to hide anything they just structured them in a way that wasn't very advantageous to the artist and Pay to Play and access to distribution channels meant you you didn't have a lot of other options. Some tried to work around the system but you probably have never heard of them. A good example that comes to mind is Greg Sage of the Wipers. Youth Of America - The Wipers (1981)
It doesn't matter how lucky, talented, or hard working you are. We've known that the American music "industry" is an oligopoly for decades, now. Let's not nurture the notion that it's open for talented people to join off their merits.