Lesson 4: Managers, Agents, and Attorneys

Lesson 4: Managers, Agents, and Attorneys

“Introduction … Personal Managers … Traits of the Successful Personal Manager … Commissions … Term … Fiduciary Relationship … Business and Road Managers … Agents … Regulation Attorneys … Role of the Personal Manager … Recap”
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Summaries

  • Lesson 4: Managers, Agents, and Attorneys > Introduction > The Music Business Team
  • Lesson 4: Managers, Agents, and Attorneys > Personal Managers > The Role of the Personal Manager
  • Lesson 4: Managers, Agents, and Attorneys > Traits of the Successful Personal Manager > Personal Manager Traits
  • Lesson 4: Managers, Agents, and Attorneys > Commissions > Personal Manager Commissions
  • Lesson 4: Managers, Agents, and Attorneys > Term > Contract Term
  • Lesson 4: Managers, Agents, and Attorneys > Fiduciary Relationship > Fiduciary Responsibilites
  • Lesson 4: Managers, Agents, and Attorneys > Business and Road Managers > Business and Road Managers
  • Lesson 4: Managers, Agents, and Attorneys > Agents > Booking Agents
  • Lesson 4: Managers, Agents, and Attorneys > Regulation > Regulations of Managers and Agents
  • Lesson 4: Managers, Agents, and Attorneys > Attorneys > Music Lawyers
  • Lesson 4: Managers, Agents, and Attorneys > Recap > Lesson 4 Recap

Lesson 4: Managers, Agents, and Attorneys > Introduction > The Music Business Team

  • In this lesson, we’re going to talk about the artist’s team, managers, agents, and attorneys.
  • Various types of managers, agents, and attorneys are a part of the team and assist the artist in achieving success.
  • You have personal managers, business managers, road managers, talent- sometimes called booking- agents, and at least two types of attorneys.
  • Each team member must have the proper perspective of building a sustainable career for the artist.

Lesson 4: Managers, Agents, and Attorneys > Personal Managers > The Role of the Personal Manager

  • Personal managers- let’s talk about personal managers first.
  • Many people think that the personal manager’s job is to get the artist work- to get the artist more work than they probably had before.
  • He wanted to make sure the act had a dynamic stage show to be able to be the equal of all of the other great Motown acts.
  • What a lot of people don’t know is that Motown had a 360 degree deal model way back in the ’60s before it became the current rage that it is now in that Motown artist’s songs were published by Motown’s publishing company.
  • All of the acts were managed by their in-house management company.
  • Shelly Berger had come from a background of a new medium at that time, a new technological innovation- television.
  • They were only in the second decade of that new medium at the time he came on the scene and decided to work with the Motown artists.
  • He wanted to use that medium to really expose the artist to a broad, vast audience that many of the Motown artists had never achieved.
  • Now, the Ed Sullivan show was a huge television show at the time.
  • There were only three television networks at the time, and this was really the primary program for the CBS network.
  • Most recently over the past decade, I think, the highest ranking prime time television show in the United States was an episode of American Idol that might have reached 35 million people.
  • The Jackson 5 came out on the stage- totally captivated both the audience there and the viewing audience all across the United States.
  • As they were moving to the music, they had the five inch afros that we’re bobbing in time.
  • 5,000- can you believe it? Most of these acts are working six days a week for $2,500 a night.
  • Shelly Berger’s out of his head. Well, during that period of time, singles we’re big.
  • The only debut act to have that in number of consecutive number one singles at all.
  • Will you please bring the act out, and perform, and get out on the road. Yes, we’ll be out.
  • A personal manager’s job is to build the artist’s career and take it from one level to the next.
  • They counsel and advise to build the artist’s career from one level to the next.
  • It’s up to the manager to determine which jobs the artist should take depending on what the personal manager’s strategy is for building the artist’s success.
  • So Shelly used that new medium at that time- television- to really reach a broad audience.
  • Once again, it’s the personal manager’s role to build relationships between the artist and the fans in order to take the artist’s career from one level to the next- not only the relationship with artists and fans, but many times relationships with other types of companies, record companies, publishing companies, sponsorships, and endorsements.
  • So we talked about a 1960s story, the second decade of that new technological innovation television.
  • Let me tell you a story about a current manager in the music industry who happens to be a graduate of the music business department at Berklee College of Music.
  • He recognized that he had to use this new technology to build a relationship between artist and fans that could inure to the benefit of his client.
  • At the same time, he used the new method of reaching a mass audience through social media.
  • He picks the bloggers with her story and her songs and said, this is an artist that you really need to pay attention to.
  • He used that success to pitch bloggers here and saying, look, they’re recognizing Betty Who- that she’s going to be a major artist.
  • So you need to really listen to her music and think about blogging about Betty Who.
  • He picked up other bloggers here in the United States slowly but surely- bloggers that reached a limited market, and then bloggers that reached even more people, all the way until the point that he got Perez Hilton, the biggest blogger in the world, to recognize her music and to say Betty Who is going to be the next big act.
  • Billboard Magazine was the next media outlet to pick up on it and said she was really an act to watch out for.
  • He had her perform in clubs in New York in the Brooklyn section of Williamsburg, which is really the hot area of the music business right now, to rave reviews.
  • I think it’s important to note that Ethan recognized- and it’s also important for personal managers to have an understanding of the dynamics of the industry.
  • He recognized that while sales of digital copies may not be increasing as they used to increase, streaming and giving away music for free is very, very important and can really help an artist go from one level to the next.

Lesson 4: Managers, Agents, and Attorneys > Traits of the Successful Personal Manager > Personal Manager Traits

  • Is this company profitable? Will that company be viable for the second and third record? Will you have the kind of support that you need, both financial and as well as having the manpower to really promote the artist, to take the artist from one level to the next what that particular company? What’s the image of the record label? Does it release the kind of music and have a history of releasing the kind of music that really falls into the genre of the artist that you’re working with? So it’s important not only to understand the dynamics of the industry, the dynamics of the record company and publishing company that you’re dealing with, but also all of the other companies that your artist might do business with, for endorsements and sponsorships.
  • Does the brand, the brand of that company that your artist is going to endorse, will that help build the artist’s brand, and really take the artist’s career from one level to the next? Personal managers have to advise and counsel the artist on a number of different matters.
  • So it’s very important for the personal manager to really help the artist have the proper perspective of the importance of their maintaining that professional image, even in their personal lives.
  • The personal manager needs to understand what studios are really creating the recordings, the powerful product that are really affecting the industry and could really benefit their artist if the artist recorded in the studio.
  • Something that’s becoming very big in the industry are artists performing on the other artist’s recordings.
  • The personal manager should advise their clients on the types of royalty rates they should receive, the amounts of the advances, and really work with the artist’s attorney in achieving a contract that’s worthy of their status.
  • The personal manager counsels and advises the artist on touring, a very, very important part of an artist’s career currently.
  • The may have to counsel and advise as to how many people the artist should take on the road. Is it important to take more people? Is important to have more production as far as a new lighting system, to staging that’s really going to help the artist project an image that can be of benefit in pitching to sponsors and in products to endorse? That’s a possibility.
  • Another aspect of a personal manager’s job in counseling and advising the artist is scheduling.
  • The new artist manager is going to be really concerned about the artist being able to participate in social media, making sure that they’re tweeting regularly.
  • So it’s very important for the manager to schedule the tour so that the artist can get it in in time to rest so that they can have a great interview to promote their show and promote their career.
  • When is an artist going to go on tour as opposed to staying off the road and recording the next album? When is the artist going to perform their next video? When is the artist going to do commercials for the products that they are endorsing? All of these activities have to be coordinated.
  • The artist’s day really has to be mapped out very carefully.
  • The personal manager is a personal manager because they have to make sure that the artist has enough time off so that when they’re on, when they’re performing, they have the kind of energy that they need to deliver that dynamic, powerful product, powerful performance.

Lesson 4: Managers, Agents, and Attorneys > Commissions > Personal Manager Commissions

  • So how is a personal manager paid? Usually a personal manager receives a commission or a percentage of the artist’s earnings.
  • It could depend on the leverage of the manager, the experience of the manager.
  • Most experienced managers that have leverage with record companies, publishing companies, might charge a commission of 20%. Whereas, you might have a new manager that’s coming in, one of the friends of the band, that says they’re really going to work hard.
  • They’re going to charge less than that experienced manager if the band gives them a chance.
  • They might charge 10%. So you have a sliding scale, so to speak, as far as determining how much a personal manager is going to get paid in commissions.
  • Some managers have made as high of a commission as 50%. Now, that’s very rare.
  • Usually in the music industry, personal managers commissions won’t exceed 20%. So you might ask 20%, 20% of what? 20% of the gross income of the artist.
  • Many experienced managers with great track records of success will insist upon 20% of the gross.
  • If the manager is receiving 20% of the gross of that date then a manager is going to get a fee of $1,000.
  • That’s kind of tough thing for an artist to swallow that their manager has made so much money while individually the amount of money that they take home is much less.
  • That leads to the argument of whether or not the personal manager should be paid on the gross as opposed to the net.
  • Let’s say that the manager is paid on the net rather than the gross.
  • If the manager is paid on the net, the 20% is going to be taken on $2,500 instead of $5,000.
  • So in this example, you can see when the commission is paid on the net, both the manager and the artist make the same amount.
  • Whereas when the manager’s commission is based on the gross, the manager is making much more money than each individual band member is taking home.
  • That could cause some bad feelings and usually does in the artist manager relationship.
  • Sometimes it takes the personal manager to make it clear to the artist that there are a number of expenses, including their commissions, that have to be born before the artist is in a position to have a net amount to split among the band members.
  • Once again, you’re talking a personal manager’s commission of maybe 20%, a talent agent’s commission of 10%. We’re going to talk about other types of managers and other team members that might also be on a percentage basis with the artist.
  • Well, the idea of personal managers and personal managers’ commissions isn’t immune from change.
  • This idea of a manager being like a member of the band isn’t new.
  • It really goes back to the ’70s and ’80s. As a matter of fact, the Commodores, which was a great band that included the great Lionel Richie, had a manager Benjamin Ashburn who was like the seventh Commodores.
  • It’ll be interesting to find out if this is a new trend when you have people like Ethan Schiff and other young managers who are working hand in hand navigating this new digital age for their artist and creating a kind of success that the artists hoped to achieve.

Lesson 4: Managers, Agents, and Attorneys > Term > Contract Term

  • Most personal managers would want a contract for a period of years, maybe an initial period plus four one-year options.
  • So the personal manager feels that during that first two years, they’re really going to have to lay the groundwork for success for the artist.
  • That’s why many personal managers have a problem with the initial term only being one year.
  • Particularly in today’s environment, it’s tough to really build an artist and really get them to the position of building a mass audience within one year.
  • In some situations where you have very successful recording and performing artist, the term might be based on album and touring cycles.

Lesson 4: Managers, Agents, and Attorneys > Fiduciary Relationship > Fiduciary Responsibilites

  • The manager has to put the artist’s interests above their own.
  • In other words, the deals that they strike, the type of activities they pursue have to benefit the artist first, before benefiting the manager.
  • If a manager breaches that responsibility, the artist can sue them to break the contract.
  • Their personal manager, unbeknownst to them, into a consultant’s agreements shortly after that success, with the very record company that the artists was signed to.
  • The manager didn’t tell the artist that they had a consultant’s agreement.
  • In other words, the manager was being paid thousands of dollars a month as a consultant with the record company that the artist was signed to, which can clearly be considered putting his interest before that of the artist.
  • The power of attorney is a provision that basically states that, the manager has power of attorney from the artist, to do things that the artist could do, anything the artist could do- sign checks, enter into agreements.
  • All of these things are going to be very important to the artist.
  • It’s advisable for the artist to try to limit the power of attorney, so that the manager can only sign for certain types of activities, say, a contract for only a few days, as opposed to a contract for a number of years.
  • It’s important for artists to recognize that they can place limitations on the power of attorney.

Lesson 4: Managers, Agents, and Attorneys > Business and Road Managers > Business and Road Managers

  • As I mentioned at the top of the lesson, there are various managers that provide services to the artist to help them achieve success.
  • Two of the other types of managers are business managers and road managers.
  • What are business managers? Business managers are usually accountants, and it’s important for you to try to have a business manager that is certified in the state that they conduct their business.
  • Many business managers are CPAs, and they’re responsible for keeping track of the income and making sure all of the expenses are paid for the artist, including their taxes.
  • So you need to have a road manager that really understands the dynamics of being on the road. Because the road manager is put in a position of having to please not only the artist and making sure the artist has everything they need to give a dynamic performance and fulfill all of the other responsibilities the artist has on the road, but they also need to make sure that the live promoter and the venue operator is happy and getting what they need to make sure that the live performance is a success.
  • If you’re new to the music business and really wondering what kind of role you’re going to play, I have to say that being a road manager is a really, really good idea to start your career.
  • If you really rise to the position of being the actual road manager, it can put you in a position of networking not only with the band that you’re really working for, but other bands that are on the bill in various cities.
  • Let me tell you a story about the importance and the influence of a road manager.
  • Once again, the road manager’s job is to make sure that the act has everything it needs, to make sure that the act is where they’re supposed to be on time.
  • I remember distinctly that the road manager told the crew and the artist, a total of about 26 people, that they had to be on the bus- this must’ve been maybe around 12:30 at night.
  • Just like their tour manager said, I was amazed when that bus was packed and on the road by 2:10, 2:15.
  • The road manager is responsible for making sure the artist is where they have to be on time.
  • So how do business managers and road managers get paid? Well, business managers with any kind of experience and success will probably want to be paid a commission of 5% of the artist’s gross.
  • Whereas road managers many times are paid salary, as well as all of their expenses on the road.

Lesson 4: Managers, Agents, and Attorneys > Agents > Booking Agents

  • Talent agents, sometimes called booking agents, seek employment for their clients and are regulated by the states in which they do business.
  • States, many years ago, recognized that talent agents really do have to be screened and registered.
  • Sometimes people involved in criminal activity being talent agents, and really not accounting for the money that they might have taken on deposit for a performing act to perform a specific live performance.
  • It really created problems and states decided that they really needed to impose regulations to make sure that they screen the people that wanted to be talent agents, force them to open up an separate escrow account to put the deposits for the live performances, and that no one could touch until the act performed the date, at which time, the talent agents could then take out their commission and pay the balance to the artist.
  • The agent is a middle person, between the talent and the talent buyer, sometimes a producer of a television show, a live promoter, a nightclub.
  • It’s important for that agent to both recognize the value of the artist, as well as what that talent buyer is willing to pay.
  • The talent agency business is a tough business, but it could be a very prosperous and good business for you.
  • Unlike recording agreements and personal management agreements, sometimes acts enter into non-exclusive deals with agents.
  • I have notes on acts that will only do nonexclusive deals with many agents.
  • In the case of an exclusive written talent agency agreement, one of the provisions might be what is called a key person clause.
  • The key person call clause said that person leave the agency, then the talent has the right to terminate the contract.

Lesson 4: Managers, Agents, and Attorneys > Regulation > Regulations of Managers and Agents

  • Personal managers and talent agents, as I’ve indicated, have different roles.
  • Whereas the job of the talent agent is to procure employment on behalf of the talent.
  • This is the reason why the state of California wanted to be sure it was one of the first states to enact legislation requiring talent agents to register with the state.
  • In 1967, they enacted the California Talent Agency Act, basically saying anyone that procured employment on behalf of an artist, or any other kind of talent, had to be registered with the state of California.
  • Then in 1978- I think because of obvious instances of personal managers not being registered as talent agents, but procuring employment- California decided to add personal managers also as a category under the Talent Agency Act.
  • In other words, if personal managers procured employment on behalf of their talent, they also had to be registered under the Talent Agency Act in California.
  • Now if you’re registered as a talent agent in the state of California, the contracts with your artist, or the talent that you represent, can only be two years long.
  • That’s because any talent agent registered with the state of California must comply with union contracts.
  • Their form contracts say that talent agents can only represent those types of talent for two years.
  • So if you’re a registered talent agent in the state of California, your contract can only last two years.
  • If you’re a talent agent, your maximum commission can only be 10%. However, if you’re a personal manager, and registered with the state of California as a talent agent, that commission can be 15%. Because you’re in a position of offering both the services of procuring employment and advancing the artist’s career.
  • Because, as we just talked about earlier, most personal managers want a commission of at least 20%. And a personal manager also wants a contract that can last up to, possibly, a minimum of five years.
  • A personal manager doesn’t want to get involved with the talent, working with the talent, identifying producers and studios and trying to get a recording agreement, and a publishing agreement- which might take two years to actually happen- only to have the act at that point sign with another personal manager.
  • So the result is, most personal managers do not register as talent agents in the state of California.
  • Most personal managers don’t register as talent agents in the state.
  • I mean personal managers, not that just live in the state of California, but also managers that live in other states.
  • Because if you have a talent that becomes successful in entertainment, sooner or later, they’re going to go to the entertainment capital of Los Angeles.
  • So even if I’m a manager, say, in my home state of Ohio.
  • I decided that I wasn’t going to register as a talent agent in the state of California, or any place else for that matter.
  • Because if I am not a registered talent agent in the state of California, that artist could file a complaint against me with the California Labor Commissioner, that oversees enforcement of the California Talent Agency Act.
  • In that complaint, they can allege that I was an unregistered talent agent, but I booked engagements for them in the state of California, in violation of that Act.
  • If they determine that I procured employment in the state of California and I was an unregistered talent agent, the Labor Commissioner can make two findings.
  • One, order that the contract between me and the talent is terminated.
  • Two, order me to pay all of the back commissions that I might have earned up to that point to the talent, to the artist.
  • The California Talent Agency Act had only added personal managers to be considered as talent agents in 1978.
  • It said that, if a personal manager does not register as a talent agent, and they procure employment in the state of California, they’re violating the California Talent Agency Act.
  • Because once I got that information, and shared it with the California attorney, we strategized that we would prepare a complaint with the Labor Commissioner against the manager.
  • Alleging that he violated the Talent Agency Act by procuring employment without being a registered talent agent.
  • So that’s how I first became aware of this Talent Agency Act.
  • Many personal managers have been caught in the web of procuring employment on behalf of their clients in the state of California.
  • Violating that act, because they weren’t registered talent agents.
  • He filed a complaint with the Labor Commissioner, basically alleging that his manager- who was not a registered talent agent- had procured this extension of his contract without his permission.
  • They went through a hearing, and the Labor Commissioner did find that his manager was an unregistered talent agent, and had procured employment in violation of that Act.
  • Well there’s been case after case since then, where managers have gone in and procured employment on behalf of their talents.
  • Make sure that your artist has a talent agent to perform those services.
  • Now you are certainly going to be in a position, as Shelley Berger was, to screen the types of engagements that the talent agent procures.

Lesson 4: Managers, Agents, and Attorneys > Attorneys > Music Lawyers

  • Entertainment lawyers are also a very important part of the artist’s team.
  • Entertainment lawyers, you will usually find, specialize in one or more areas- usually music law or TV and film law.
  • It’s very important to find experienced entertainment lawyers that work in the specific field that you’re involved in if you’re a talent.
  • I was fortunate enough to find a great client at the beginning of my career- the O’Jays.
  • There are two primary types of entertainment lawyers that are really going to work on behalf of artists and their companies.
  • Litigators sometimes are paid on an hourly basis, and most experienced litigators, and entertainment lawyers, in general, can earn between $300 to $1000 an hour.
  • An hourly rate will usually apply to situations where clients are being sued, and the attorney has to defend them in court.
  • In certain instances, litigators might take a case on where a client has a claim against someone else- where there’s the potential of winning a money settlement or money judgment against another client.
  • In a contingency-fee agreement, the attorney doesn’t bill on an hourly basis, but they receive their money contingent upon them winning the case on behalf of their client.
  • They get paid instead on a certain percentage of whatever they might recover on their client’s behalf.
  • I happen to be the second type of entertainment lawyer- that is, the transactions attorney.
  • What does a transaction attorney do? Well, we usually are involved in the negotiation of contracts, establishing business organizations on behalf of clients, monitoring the contracts in their business dealings to make sure that everything is handled according to the contracts and the business deals that we work so hard to get our clients involved in.
  • Transactions attorneys may also be paid on an hourly basis, and at times they can be paid on a contingency-fee basis.
  • Many times, transactions attorneys will have relationships with record companies and with publishing companies, and will provide a service which is called shopping- or in other words, trying to shop a deal, or try to get a deal on behalf of their client- either a recording contract or a publishing contract.
  • It’s important for you to know that attorneys also have a fiduciary obligation to their clients, just as personal managers do.
  • Their clients place their trust in them to look out for their clients’ interest over their own.
  • Most state bar associations that regulate attorneys prohibit attorneys from going into business with their clients, because at some point there’s the potential that the attorney’s interest could be adverse to that of their client.
  • Conflict of interest issues can also be raised when an attorney represents a group.
  • The supreme court of each state registers and regulates attorneys, and give them licenses to practice law.
  • That’s the reason why personal managers shouldn’t necessarily be entertainment lawyers.
  • Here’s the problem- if you’re acting in the capacity as a personal manager, and you’re also an entertainment lawyer, should your artist have a problem and feel that you have a conflict of interest issue, or that you’ve breached your fiduciary duty as a personal manager, they can file a complaint with the supreme court of the state in which you’re licensed as a lawyer.
  • So you have to really make a decision whether or not you want to be a personal manager or an attorney.

Lesson 4: Managers, Agents, and Attorneys > Recap > Lesson 4 Recap

  • The central player on the artist team is the personal manager.
  • The personal manager in this evolving digital age needs to recognize that it’s crucial for them to develop a very special ongoing relationship between the artist and their audience.
  • The personal manager also has to act like a conductor of an orchestra.
  • All of them work together to advance the artists career.
  • Would you like to be a member of the artist team? If so, where do you think you can best use your talents to create a sustainable and successful career for an artist, and move the industry forward?

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