Mr. Industry
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Dear Mr. Industry,
Someone told me that our band manager isn't allowed to also book our gigs. Is this true? Why? Does this mean we need a separate booking agent?
– Grant Y.
Los Angeles, CA
Dear Grant,
Both California and New York have Talent Agency Acts on the books stating that no one besides those licensed as talent agents by the Labor Commission in the state may book shows for artists, regardless of whether they are paid a commission for the activity. Among other requirements, in California a "licensed" agent must have his/her form of contract approved by the Labor Commissioner, maintain his/her client's funds in a trust fund account, record and retain certain information about his/her client, and refrain from giving false information to an artist concerning potential employment.
Though arguably a relic of the pre-modern touring world, several managers have been disgorged of profits for violations of Section 1700.14. This means that not only have they been barred from collecting commissions on the engagement, but that the manager must return all commissions earned from that particular artist during the entire manage/artist relationship, which is pretty harsh. Needless to say, this is a potent threat of which all managers (and artists) should be aware.
Most managers explicitly state in their management agreements that they are not "talent agents" under California or New York law, and that they are not hired for this purpose. Even with this language, a manager should avoid booking shows for clients without a license (though ironically this is the very thing managers are often asked to do), lest they get sued down the road from those same clients. At the very least, all artists (especially those living in California or New York) should be ready and able to book their own shows until a licensed talent agent can be procured, perhaps with guidance or the relationships of the manager.
– Mr. Industry
Dear Mr. Industry,
Can you explain what a "point" is? I was hanging out with this guy in a band that got signed last year, and he was talking about how different people get points on their record when it's done. I didn't want to sound stupid, so I acted like I knew what he was talking about. Is it like extra money that some people get paid? Or what?
– Mikael D.
Vancouver, BC
Dear Mikael,
A point is generally defined as a percentage point of the suggested retail list price (SRLP) of an album (or 1% of retail). Though record deals have begun to shift toward using simpler and arguably more equitable formulas, such as "profit split," "price per dealer," or wholesale formulas, they have traditionally paid artist royalties in terms of "points" of retail. A customary major label deal may pay an artist an "all-in" royalty of 12 to 15 points (or 12% - 15% of retail), with standard deductions such as packaging (25%) free goods (25%), new technology (15%) and singles deductions (25-50%). From the artist's all-in royalty, a producer might be paid 3 points, with a mixer getting 1 point.
Looked at this way, "points" are fairly valuable even though they are only single-digit percentages of the retail price of a record, as they generally represent from 6.6% to 8.3% of what an artist earns from record sales.
– Mr. Industry
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney in your state/country for individual advice regarding your own situation. In addition, no e-mail or other message to or from rightround.com establishes any attorney-client relationship.
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Posted April 2007
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