The purpose of this column is to provide career guidance from the perspective of an entertainment lawyer. The information presented here is not intended to be legal advice nor an overview of how to write, negotiate or interpret contracts. Rather, each article addresses issues like business relationships, considerations when seeking legal advice, and in general, a "backstage" informal dialogue about the realities confronted in pursuing a career in today's music business.
A short note about how you should approach the information you read here. We're trying to teach you something here not dissect "wherefores" and "therefores." That's what lawyers do for you. If you have specific questions, write us and we'll try to clear up your confusion. Otherwise, what we do in this column is present actual real life fact patterns and situations to give you perspective by pointing out "what is wrong with this picture?" That's what our goal is, to show you something, to make you realize something you may not have realized before. With some excellent books out on the subject of the music business, there are opportunities for self-study on the business of music. Especially good are Donald Passman's "All You Need to Know About the Music Business," and Mark Halloran's "The Musician's Business and Legal Guide," and of course Bill Krasilvosky's classic, "This Business of Music" updated on a regular basis. All great investments for your music library.
There is a marked distinction between "wanna-be's," who are looking for a deal (as opposed to the "break" they methodically worked toward), and professional music people who are doing business and need legal advice and services for "transactional" (contract) situations. There are certainly a range of contracts involved in your career, and it is generally the case that the contracts are related to "doing business." From our experience in fielding many telephone inquiries, unsolicited submissions and letters, from readers of this column, there are many inquiries about legal representation to get signed, but much less emphasis on the steps in between. In other words, few, have truly focused on developing "business" with their music. The objective is clearly asking to be pitched and discovered, thinking that their missing "right of entry" to the big time lies in having CD's and tapes submitted under a lawyer's letterhead.
This is not a criticism, but rather an observation. Music business contracts are rather precise documents which have evolved through years of industry transactions. Some of you may already be involved in situations where contracts in fact play an important part. There are simple letter agreements and "memos", which can be composed to fit the situation, depending who writes them (you can do a lot of damage with a short self-authored memo); and of course there are the "standard" "long form" agreements, which address the same issues with some variation company by company, for the fundamental relationships, such as management, production, exclusive recording, etc.. You'd be surprised how informal some dealings can be between lawyers and legal departments among the most successful music people, who make sure contracts, agreement and understandings are adjusted as you go along and flexible to move the business and creative process ahead. It's easy when you know what you are doing, and doing business and selling music are getting done..
As musicians, you had best let the lawyers and business affairs people handle that business, so that the creative people can be creative. But the "bottom line" is really what counts, and that's what we like to talk about here and in our private consulting, because business counseling and direction and is the most valuable benefit an attorney can offer. Let's look at the whole picture and then talk... Are you making money with your music, investing it, spending it, or losing it?. Are you getting paid or working for free? Do people want to hear what you are selling or do you clear the room? Are you selling what the people want? These are some of the fundamentals, and to be honest if you do not get this straight, you may never see a real contract that represents a "transaction."
And now for something completely different...
The "It Really Happened" Situation of the Month Department.
We're going to tell you about a situation about a group that is coming out on a major label, but you should be glad that it's not you. They are utterly, absolutely misguided, unrepresented, and manipulated. At the time when these early twenty's guys should be ecstatic because they now have their celebrated record contract, they are totally demoralized. Why? It's all about signing the wrong contracts with the wrong people and not following the advice we give right here in this column...such as "you better to see an attorney fast before you sign, say, or give away anything you might regret, because the lives you screw up may be your own.
There are at least two configurations for an act to be on a major label. Some would say you sign with a record company and they put out your record. Sometimes that's exactly correct.. When you sign directly with the record company, it is generally under an exclusive multi-album (at their option) recording agreement between you and the label, i.e., a Polygram label, a Sony label, etc.. In this arrangement you have what is referred to as "privity of contract" with the label. There are only two parties involved, you and the label. The label will see to it you have a producer, and the producer of the record will be "hired" by the record company (in the earlier days of the modern producer's era, there were "staff producers" (not "free agent" independent producers) working for the label to produce the record. You may still find this to be the case today if you sign with a label where the record producer is intrinsically connected to the label, the creative soul of the company. Sometimes, you will see the supervising company person as "executive producer." Those of you who studied the Beatles may recall that George Martin "worked" for EMI Parlophone as a "staff producer, " a true employee of the company. As the business of pop music has evolved, in many ways the industry has become a "producer's medium. The budgets, the creative control and the ability to make or break a new group comes to the producer. Today, the producer's in the " (young) old boy network" who have their multi-artist deals, absolutely rule in this business, because you, the artist/the band become their "vehicles." Surprised? Once they bring you to the label, they pretty much call their shots once they get the go ahead. In the event you do sign directly to the label, it will be up to the label and hopefully the input of your manager and/or attorney to maneuver you to the right producer.
Try not to end up with the wrong producer. A hot producer is always preferable to one who is not. But make sure if you have the chance to request, set your sights on a producer is a "real producer," not just a name, unless they really can make things happen for you, not-with-standing their lack of true production talent. And don't work with a "yes man." Choose a producer who will challenge you musically and creatively to get the most out of you out of you in both material and performance.
Independent producers start their own production "companies" and sign artists to production contracts. These contracts are exclusive recording artists agreements, and they are virtually the same as record company contracts, except you are signing with a business "intermediary " between you, the artist, and the record company. One thing to understand is that the agreement with the record company runs between the producer (the production company) and the record company. The money, the budget, the royalties, are paid to the producer. The producer signs you, the act, pays you a signing advance (if you are fortunate), and you receive record royalties, if any, from the production company at some future time if your record(s) recouped the costs. In addition, the record company gets you, the artist, to sign a short document known as the "inducement letter". This is the record company's way to hold on to the artist, in case for some reason the producer no longer can deliver your recordings to the record company (and the obligations as promised by the producer to the record company have not been satisfied). The record company wants to make sure they get the record from you they are entitled to, as it was promised by the production company.
The story of the band in trouble is a really a long one, so we will summarize the basic circumstances. You may recognize the problem. The manager of the group in question is Overreaching Mgmt Inc.. The production company they are signed to? Overreaching Productions, Inc.. The publishing company that took all their songs? That's right. Overreaching Publishing. If there is one thing this management/production group does right, it is "overreach". What makes this situation even worse, is that they are apparently not very nice people. For example, the group was prohibited from engaging professional advice to negotiate the contracts. Can you believe this exploitation is still happening? Now the group is working for the management. If they cross the management, they are threatened with expulsion or severely fined. (It's their act, not the managers!) They have no access to their money unless management gives it to them. They are afraid to move, and they do not want to give up this dream to have a record. The only problem is they have lost their joy, and the music will probably follow. And they are now so afraid they will not let anyone help them. One other thing, the management has threatened them verbally, emotionally and physically. They are a battered band! The record company thinks their production people/management are great guys. What a welcome to the music business for these impressionable young guys. These things happen. Our hope is that something you read here will keep things like this from happening to you.
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and comments for future articles to:
Robert Rosenblatt
301 West 53rd Street
New York 10019
Telephone (212) 262-2112
or email to legal@soloperformer.com.
© Copyright 1997 Robert Rosenblatt
