Business Plan Advice from Entertainment Lawyer Claybourne E. Chavers

I asked Mr. Chavers a series of questions regarding my business plan. My most important question to him was what business entity I should form my company under. Mr. Chavers stated that I should form my business under a Limited Liability Company because of the benefits of having the protection of being separated from the business on issues of liability the company might endure during its years in business.  He went on to discuss the differences of the entities and stated that later I would be able to switch to an S Corporation when business starts to pick up and I wanted to involve shareholders.

The one thing he also told me was that I needed to make sure that was something I wanted to do because once I made the switch to S-Corporation I wouldn’t be able to switch back to an Limited Liability Company. He also stated the importance of having an accountant on hand to explain to me the different tax laws involved with the different business entities to help solidify my decision. Mr. Chavers told me that the accountant should only give me advice on tax issues and not legal issues regarding forming a business entity. Mr. Chavers stated that I should have employee agreements and non-disclosure agreements drafted for future employees to sign so that they won’t give away any confidential company information on how we operate as a business or start their own business with the same ideas if they decided to work for a competitor or start their own business in the same field.

The other issue we discussed was the importance of having artist management agreements for the recording artist we plan on managing after the development stage. He stated that having these agreements in place would solidify the artist management relationship. It will also put to rest any issue about what my job is as an artist manager and what my company expects from the recording artist we manage. It also takes care of the issue of how much my commissions are on the artist’s income and what part of the artist’s income is included in my percentage.

The information that Mr. Chavers gave me can be applied to my business plan by taking the advice on how I should form my business, the importance of artist management agreements, employee agreements, non disclosure and non compete agreements.

http://www.chavlawfirm.com

Industry Liabilities Affecting Recording Artists

Since the digital revolution in the music industry many artists have suffered from the loss of revenue due to illegal file sharing and the new way music is being distributed online. I have researched three articles from the New York Times Media Decoder in which states the many different industry liabilities affecting recording artist at this time. As a recording artist it is important to understand what is at stake in the music industry and being aware of how to go about to resolve the issues that take place on a daily bases in the music industry.

On October 30^th 2012 author Ben Sisario discussed Eminem’s on going battle about digital royalties in a lawsuit that has been finally settled. The case was entitled F.B.T. Productions v. Aftermath Records. F.B.T was a group of early producers who sued a subsidiary of Universal Music Group because they felt that they were not getting the royalties that was owed to them from iTunes and many other digital stores. This particular event opened the door for many other prominent artists to sit down at the negotiation table and discuss their cut from digital sales that was not received. I personally agree with this situation of artists needing to get paid. Just because digital is a new avenue of revenue doesn’t mean that they should not get compensated for their work that is being distributed in the digital format.

The next article from New York Times author Ben Sisario discusses recording artist Chuck D. suing Universal Music over Digital Royalties. Chuck D. is a member of the group Public Enemy. He is one of the latest major recording artists to sue Universal Music Group for digital music royalties. Carlton Ridenhour (Chuck D) stated in an argument that UMG has miscalculated royalties for MP3’s and ringtones. The other big issues was that UMG had incorrectly accounted for downloads as sales stated in the New York Times article.  My opinion on this issue is that at the end of the day recording artist need to be compensated on all aspects of the revenue stream when it comes to music royalty payments.

This is an on going battle that must be fought to the death so that recording artist can continue to be compensated for there work for years to come. This example is a powerful testament to work that has been done over 20 years ago for recording artist not getting compensated for work being distributed in a new revenue stream.

The last article I would like to discuss is also from New York Times author Ben Sisario Digital Notes: Music Stars Criticize Pandora on Digital Royalties. This article discusses legal issues pertaining to Internet radio royalties being distributed amongst recording artists. On November 14^th 2012 an open letter signed by over 100 recording artists including Cee Lo Green and Sheryl Crow discussing fair compensation of royalty rates for services like Pandora and the passing of the Internet Radio Fairness Act. The IRFA will enable more jobs in the music industry along with more streams of revenue for recording artist and bands.  The letter was publicized by the MusicFirst Coalition, which represents major unions and musicians in the music industry. My opinion on this situation is that this will most likely help both sides of the recording industry consumer and artist. It is important to understand that with new ways of making money artist need to be compensated. This was a very good route for recording artist to take to come together to champion for a very important issue right now in the recording industry. This is a good example for up and coming recording artist to take note that the buck doesn’t stop where the record labels allow. Fight Fight Fight!

Articles:

The New York Times

October 30^th 2012 Lawsuit Seeking Greater Digital Royalties for Eminem’s Music Is Settled http://mediadecoder.blogs.nytimes.com/2012/10/30/lawsuit-seeking-greater-digital-royalties-for-eminems-music-is-settled/

November 3^rd 2012  Chuck D. Sues Universal Music Over Digital Royalties http://mediadecoder.blogs.nytimes.com/2011/11/03/chuck-d-sues-universal-music-over-digital-royalties/

November 14^th 2012 Digital Notes: Music Stars Criticize Pandora on Digital Royalties

http://mediadecoder.blogs.nytimes.com/2012/11/14/digital-notes-music-stars-criticize-pandora-on-digital-royalties/?pagewanted=print

The Relationship Between Artist and Manager: What you should know

The connection between artist and manager is an important union in the entertainment industry. Whether you are an actor, comedian, musician, or recording artist the relationship builds character on both sides of the spectrum. The manager is the point of contact between the business of the industry and the artist. It is important to remember that with out a manager it would be virtually impossible for the artist to function on a daily bases. The relationship is built on trust and a common understanding of the roles each entity plays to get the job done.

According to the This Business of Artist Management book by Xavier M. Frascogna. Jr. and H. Lee Hetherington the artist manager is a planner, adviser, organizer, strategist, overseer, coordinator, detail person, traveling companion, and friend. The relationship is built on the initial exploratory period when the artist and manager are feeling out each other. It is important for the artist to understand what he/she is looking for in terms of management. The exploratory meeting between artist manager gives both parties an understanding of what is necessary to cultivate a lasting union or no union at all. This process helps in drafting the final management agreement with attorneys.

Some important questions for recording artist to ask according to the book This Business Of Artist Management is:

1.     How did I get involved with this Manager?

2.     What is this manager’s background and track record?

3.     What exactly do I want from my career?

4.     Is this the right manager for my career and me?

The manager should ask:

1.     Why did this artist come to me?

2.     Was he/she recommended or referred by one of my clients, an associate, or a friend within the industry?

3.     Is the artist worth my time according to his creativity and dedication?

At the end of the day the artist and manager relationship is one that will take time to grow. It is a give and take, take and give relationship and it is important that everyone does there part. I will be posting more on the topic of the relationship between artist and manager in the future so stay tuned.

The Importance of Management For Your Band

So you are a leader and member of a band and you are starting to get really busy right? Since the beginning you have managed every aspect of how you and your members are going to make it. Every decision you make is in your hands and your band is looking up to you. What will you do if a record label approaches you and they offer you a deal? Who will you have to look over that offer for you? Will you take it into your own hands and continue on the path of self-management or will you relinquish your powers to a trust worth artist manager or Management Company?

It is important to remember that you are an artist and an artist must remain in the zone of creativity and cultivation. About.com talks about the importance of Band Management. Management can provide this opportunity to you because of the extra workload that would be taken off of your shoulders. You really don’t know how busy you can get until you get busy. It is important to make the right decision for you and your band members so that you can continue to become well known and profitable. You didn’t work this hard to get to where you are at now to throw it away on the notion that you are letting a stranger manage your career. That stranger has talents that you don’t have in terms of moving you in the right direction.

History is here to remind us that people have done this and it has ether worked or hasn’t worked. Creedence Clearwater Revival is a perfect example of self-management going wrong. The band’s leader John Fogerty thought that he could do it all. He was a very talented songwriter and producer for his band CCR. He looked over every contract and signed on the dotted line not knowing how it would impact him in the future. He didn’t have the advice of an artist manager that would have been able to help him develop his ideas and include everyone in the band in the process. This can be the turning point of you continuing a successful career or breaking up like CCR eventually had to do because of their differences.