Who Are My "Team of Advisors"?
By
Michael McCready
Attorney at Law
A band is often surrounded by what Donald
Passman calls the
"team of advisors." These include the business manager,
accountant, and lawyer.
A business manager, as the name implies, manages an
artist's
finances. Needless to say, you don't need a business manager
until you are receiving enough money to justify the expense.
However, when you get to that point, a business manager is a very
important individual. A business manager monitors the bands'
income, expenditures, budget and insurance. Most importantly,
they will be aware of the tax consequences of your career. As
all bands realize, the entertainment industry does not take taxes
out when they pay you. I challenge the band to find me a show
they played where their net pay was $273.54 after taking out
social security, state and federal taxes. It just does not
happen. When you make enough money, that tax bite can come
pretty hard come April 15th.
There are no requirements to be a business manager. Most
business managers are CPA's. An accounting degree is not
essential, however, be sure that your business manager is skilled
at complex financial transactions. Also be sure that he is
familiar with the entertainment industry. This criteria is
essential because the entertainment industry has many unique
aspects which differ from general business. Try to find a
business manager who charges hourly as opposed to a percentage of
your income. If the business manager insists on a percentage of
income, try to include a cap so that if your album goes triple
platinum, your business manager does not get to retire. Never
agree to pay a business manager more than 5% no matter how much
money he says he can make you or save you.
Another important member is an entertainment attorney.
The
entertainment industry is built on contracts. Lawyers write them
and lawyers break them. Before you sign anything, it is
advisable to have an attorney look at it. Most attorneys charge
by the hour or a flat fee. Some, however, will want a percentage
of the band's income. As with all other members of your
entertainment team, avoid this if you can. An attorney who takes
a percentage of a band's income may create a conflict of
interest. Be wary of a lawyer who does this, even if they are
merely shopping your tape. Since they are
getting a cut, who's
interest is she looking out for? I don't know any lawyers who do
work before getting paid. It is wise to consider a retainer to
an attorney so when you do have a legal question or problem, you
can call them up and get advice and apply it toward your
retainer.
Another member of your team is the talent agent. This
person books your shows. There are different levels of talent
agents from those who work only in a particular city to regional
to national. Have you ever wondered how a band plays 150 shows
across the country or how a band from Georgia plays at a night
club in Cleveland? Talent agents book these tours. They have
the contacts and they route their bands across the country. A
talent agent is almost a necessity if you plan on touring outside
of your region.
Talent agencies are generally governed by law and union
agreements. New York and California have stringent laws
regarding talent agents. Most reputable talent agents are
members of various entertainment guilds/unions such as AFM,
AFTRA, etc. and abide by their constitutions and bylaws. These
guilds have standard contracts between the artist and the talent
agency. A standard fee for a talent agent is 10%, but it may go
as high as 20%. There are some local talent agents who
specialize in getting bands shows in a certain region. They
generally prefer bands who want to perform for a living,
including week nights. If you want to play only Saturday nights,
a local talent agent is not what you need. Getting shows means
perseverance. Send your tape to the club and be willing to
accept playing any night the owner requests. Don't expect to
start out playing Saturday nights. Pay your dues. For the full-
time band, however, a talent agent can be a big bonus.
The most important member of your team is the producer.
She
is the one who makes you sound the way you do on your tape.
Since the entertainment industry is driven by recorded music,
what you sound like on tape is crucial to your success. A
producer can make your sound soar or make you sound like a dull
drone. Initially, most producers will want to be paid a flat
fee. This is understandable because most bands just don't make
it. Sorry to disappoint you, but 95% of bands never get out of
their basements. Therefore, it is hard to convince a producer to
take a chance and produce your band for future royalties.
When you get to the point of recording an album for a record
label, things change. Producers generally want money upfront,
which is called an advance, and a percentage of the royalties
from the sale of the record, which is called points. Producers
almost without exception receive three percentage points on a
record contract. The key to picking a producer is listening to
her prior work. Find a band whose tape you like the sound of and
find out who produced it. It is likely that the producer has a
style that you want your music to possess.
All of these people play an important role in a band's
development. Chose these people carefully. You should be
comfortable with them personally as well as professionally.
Check the reputations of the persons you consider hiring since
your reputation is also on the line. You will be known by the
people you surround yourself with. Each player fulfills a role.
Michael McCready
represents clients in all areas of the music industry including
music, radio,
television,
stage, and book publishing. His music law practice includes
representing bands, record
labels, production companies, recording studios, promoters, and
music publishers.
His work includes copyrights, analyzing and drafting contracts,
trademarks,
publishing,
and litigation.
Michael McCready
Attorney at Law
1900 Chicago Road
Chicago IL 60411
McCready@music-law.com
(708) 754-6212
Fax: (703) 754-8658
