|
Assembling
an
Entertainment Industry
Team
by Anthony R. Berman -
Attorney
- Posted
Jan. 2004
Back to The
Academy
I wish to be cremated. One tenth of my ashes shall be given to my agent as
written in our contract. –Groucho Marx
Rapid advances in technology today allow artists of all types to be
relatively self-contained. The creative process has become streamlined and less
expensive for many filmmakers and musicians and the Internet allows for direct
access to the public. Nevertheless, for many artists, assembling a "team" is
still a crucial step in building a long term career in the industry and
successfully developing, marketing and exploiting the fruits of the creative
process
The following is an overview of the various members that may form the team.
The Personal Manager
I have often told my artist clients that entering into an agreement with a
personal manager is a lot like getting married. It is a particularly intimate
relationship with a commitment for a long period of time. Furthermore, the
artist-manager relationship tends to have ramifications after the contract has
ended.
The personal manager is often the focal point between the other team
members
and the artist. Generally speaking, a manager's duties involve advising,
counseling and guiding the artist towards the furtherance of his or her career.
Depending on the parties involved, the manager may be very hands-on (i.e.,
selecting wardrobe, publicity materials and advising on creative issues) or, at
the other end of the spectrum, mainly involved in business transactions for the
artist.
Most management agreements have a fixed term of 3 to 5 years, sometimes with
options for additional time periods (or in the case of musical artists, album
cycles). One way to reduce a lengthy term is to include a provision that permits
the artist to terminate the agreement if he or she should fail to earn a minimum
level of income during the first 2 years. Yet another alternative would be to
include a provision that provides for the termination of the agreement certain
identified events do not occur. For example, if the artist is a musician,
management agreement might state that the agreement may be terminated if a major
label recording contact is not entered into within 18 months.
Management agreements typically seek to grant a manager a power-of-attorney
provision which can be quite broad or narrow depending on the negotiating
strengths of the parties. A limited power of attorney permits the manager to
carry on the day-to-day business affairs of the artists; i.e. endorse checks,
sign performance agreements, dealing with performing rights societies, etc. A
general power of attorney would, in addition to the above, also permit the
manager to bind the artist to long term commitments and even commence litigation
without the artist's knowledge. The artist should require that he or she has
final approval over "creative matters" and the manager is not permitted to sign,
on the artist's behalf, any recording, publishing, merchandising or similar
long-term agreement.
Personal managers invariably provide their services in exchange for a
percentage of the artist’s gross earnings. Generally, the percentage can be
anywhere between 15% and 25% depending on the relative experience of the
parties.
Often it is the case that certain expenses, costs, and disbursements incurred
in connection with the artist's professional career would be deducted prior to
the calculation of the personal manager's compensation under the terms of the
agreement. These deductions should include most monies paid on artist’s behalf
to third parties.
The most highly-negotiated provision in any management agreement is post-term
compensation. While manager will argue for a perpetual commission on income
derived from any contracts that he negotiated during the term, the artist will
understandably be concerned about paying double-commissions to the former
manager and a new manager. he or she did during the term but paid less or not at
all after they've stopped working for you. There are several compromises that
can be reached on this issue, usually centering around what is known as a
"sunset clause". In the manager is granted a post-term commission that
diminishes over time and also may be limited to certain specified revenue
sources.
Because of the economic risk inherent in the management agreement, a new
artist will find it very difficult to attract the attention of an experienced
manager until the artist is generating income or at least creating some real
"buzz". Therefore, sometimes an inexperienced, but enthusiastic novice is called
upon to be a manager in the early stages of the artist’s career.
The Talent Agent
The talent agent has one clearly defined function--------getting the artist
employment. Obviously, a very crucial function since, after all, without
employment, the artist has no income and cannot afford to pay rent and
compensate the rest of the team.
Talent agencies range from the giants such as CAA, ICM and William Morris to
the smaller one person operations. While the large agencies cover the whole
spectrum, the smaller agencies often specialize in different areas of the
entertainment industry such as niteclubs, dance companies, film, corporate
parties, etc. The real trick, though, is finding an agent. Talent agents (also
known as booking agents) not surprisingly tend to sign performers who have a
demonstrated ability to fill a room with warm bodies. This means that many
artists end up doing their own booking initially.
Most agents will represent artists only on an exclusive basis. This means
that anyone who wants to engage the artist must negotiate with the agent. This
also means that the agency may be entitled to a commission derived from
virtually all of the artist's employment in the entertainment industry, even
when the agent had little or nothing to do with procuring the employment.
Generally, talent agency agreements have an initial term of one to three
years. Additional one year options are possible, sometimes based on certain
specified levels of income having been achieved during the term. Agents
generally receive a commission which ranges between 10% and 20%. However, most
performers' union agreements impose a 10% cap on agents' commissions. The artist
should always limit the commissionable income to live performance monies and
exclude any recording and publishing income. Furthermore, unless the artist is
signed to one of the big agencies which puts together package deals in a variety
of media, the artist will not want the music agent to be commissioning income
derived from acting gigs.
Except for the provisions relating to commissions, agency agreements (unlike
management agreements) tend to be non-negotiable. One reason for this is that
talent agencies who work with union-affiliated artists are obligated to use
artist-friendly contract forms drafted by the unions.
Furthermore, it is important to note that some states, such as California,
require that talent agencies be licensed by the State Labor Commission. As a
result, in the State of California, no person, including a manager, may procure
employment for an artist without first obtaining a license from the labor
commissioner. An exception to this law permits a non-licensed individual from
procuring a recording contract for an artist
As with finding a manager, or an attorney, the best method for finding a
talent agency is by word of mouth from other artists in your field. In addition,
there are reference books and websites which list talent agencies. As with any
member you are considering for your team it is important to select an agent who
is familiar with the venues which are appropriate for your particular genre and
is enthusiastic about working with you. For this reason, for the artist who is
starting out, it is sometimes more effective to work with an energetic, but less
experienced agent rather than attempting to sign with one of the giants and
getting lost in the shuffle.
The Entertainment Attorney
Negotiation skills and general legal advice are only a portion of what
attorneys bring to the table in the entertainment industry. Many attorneys are
defacto business advisors and professional matchmakers, bringing parties
together for new projects. Some attorneys administer copyrights and collect and
receive funds on behalf of their clients. And, of course, when deals go sour, an
attorney coordinates the litigation process to resolve the claim.
Finding an attorney requires some research and the best place to start is
word of mouth. Ask other artists and industry professionals for recommendations.
The entertainment industry is a relatively small network of professionals who
tend to interface on a regular basis. One of these places is entertainment
industry conferences. Attorneys often participate at these events as panelists
and their bios are published in the conference materials. In addition, it is
easy to strike up a conversation at one of the many cocktail parties that occur
during a typical conference.
For the less socially inclined there are a variety of lawyer referral
services, some of which specialize in arts or entertainment related law. Many of
these organizations also provide regular workshops and clinics which are
informative and provide yet another method of networking with attorneys. In
addition, your local public library or county law library may have a directory
called Martindale-Hubbel which lists lawyers ranging from personal injury to
bankruptcy to probate--- but this is probably more information than you would
want to sort through initially.
Of course, an artist can also use the Internet to locate an attorney. Many of
the top-notch entertainment law firms maintain websites with information about
the firm, articles and links to other entertainment resources.
It is important to ascertain whether the attorney will be charging you for
the initial consultation. Beyond that, fee structures can vary widely, but there
are several primary methods in the industry. Firstly, there is the hourly rate.
Hourly rates can vary quite a bit based on geography and experience, but as a
ballpark range you can expect $250.00 to $450.00. Secondly, many entertainment
lawyer charge a percentage (usually 5%). While this may provide the client with
an advantage in some cases, the client should also consider that the other
members of his or her team (i.e., agent, manager, business manager) also take a
percentage, thus making what's left of the pie that much smaller. Finally,
flat-fee billing is utilized by some attorneys for specific projects such as
incorporating or registering a trademark.
In all cases, the client should expect a written legal services agreement, as
well as the requirement to pay an upfront retainer deposit, which is typically
held in trust and applied against fees and costs as they accrue. Costs, by the
way, are usually billable and can include messengers, fax, overnight mail, long
distance phone calls, and possibly photocopies.
I mentioned already that the entertainment industry comprises a relatively
small network of companies and individuals. The problem that arises for the
client is the potential for conflicts of interest. Attorneys are ethically
required to disclose conflicts of interest. Many conflicts can be dealt with by
disclosure and informed consent of the parties. However, some require that the
attorney step aside and that the parties retain separate counsel. That being
said, conflicts are not limited to attorneys--- it is also common to managers,
agents and other professionals in the industry. The bottom line is that the
client needs to be informed and then needs to feel comfortable based on the
facts and circumstances as presented.
The Publicist
Simply put, a publicist's job is to develop public awareness for an artist.
Without that awareness, even the most talented artist will have a hard time
becoming successful. It is the publicist’s job to make the media and various
writers aware of a particular artist. The media takes the information and,
hopefully, presents it to the public in a manner that will generate interest and
economic benefit.
People often think that artists end up on magazine covers or television
because the publication, television station or radio station sought them out.
Rarely is this the case. Most of the time a publicist is hired to create a stir
about an artist, or an event. A good publicist accomplishes this by building
trust over a period of time with the writers they solicit. Writers come to
depend on publicists to bring them good stories and new players in the scene.
Publicists may charge an hourly rate, a project fee, or a monthly fee,
depending on the scope of the job. For example, a four-month media campaign
might range in cost from $6,000 to $20,000 plus expenses.)
The Business Manager
Assuming the artist has a solid income stream, a business manager (usually an
accountant) is an essential member of team. Business managers, as opposed to
personal mangers, focus solely on the artist’s finances. However, good business
managers are more than just "bean counters". Whereas accountants generally do
one or two things for their clients: taxes and/or bookkeeping, a business
manager can pay the artist’s bills, help the artist collect income, do payroll,
budgets, tax planning, shop for the best insurance (life and health), investment
analysis, and track and audit royalty accounts.
Business managers are compensated on an hourly basis, monthly retainer,
percentage, or some combination of the above.
----
ANTHONY BERMAN is an entertainment and Internet law attorney in San
Francisco. A partner in the firm Idell, Berman & Seitel, his primary
practice areas include negotiation of entertainment contracts, including
recording, publishing, touring and presentation, digital distribution,
webcasting, film and multimedia agreements, advising clients on legal issues
involved in the formation of entertainment-related organizations and protection
of copyrights and trademarks. Mr. Berman is the editor-in-chief of Multimedia
& Entertainment Law Online News (M.E.L.O.N.) and a contributing editor to
Entertainment Industry Contracts, published by Matthew Bender & Co., Inc. He
was the Chair of the Sports and Entertainment Law Section of the Bar Association
of San Francisco from 1998 through 1999 and is an adjunct faculty member of
Golden Gate University School of Law where he teaches entertainment law. He can
be reached at Anthony.Berman@ibslaw.com
|
