This is how record labels work:
Essentially it's a huge loan given to you after you sign. You are given a certain amount for the produced music (you studio of choice usually) and they pay for all the promotion materials, lawyer fees, etc. Lots of lots of cash goes into you before you even release the album.
When the album is released, you have to sell X number of copies to PAY BACK the loan. After that you begin to recieve cash. If the album goes platinum, you make tons of it. Royalties can add up, especially with a hit album.
If you don't make enough, basically your done and the record company finds someone else. You usually don't have to pay back a cent, even if you fail. This is course varies from contract to contract (which people should read carefully, and have a lawyer look at it)
It sounds like the article writer simply didn't sell enough. 300,000 isn't enough. Usually with a major label, you have to sell 1 million before you see a cent.
Today things vary a bit more than they used to however, so it depends on the deal. For instance, if you get featured in a film, that's much more cash. If you wrote the song, that can equal more cash as well.
The Disney project I was a part of, was so low budget that royalties usually come in full value, however the split was so much that it won't be enough to make a living. Not to mention the album could bomb.