It varies, but mostly it involves marketing. Press, branding, merchandise, etc. Alongside all the other odds and ends like helping you find support staff (visual artists, booking agents, tour managers, etc), legal representation, and fronting money for the recording process. There's quite a bit that goes into it all, there's a reason why large record labels have so many employees.
They take the most of the money so the artists won't get rich too early (or at all). That way the artists has to be creative and come up with something new next years as well.
