Many managers claim that they can solicit employment on their client’s behalf. However, under the Code, managers can only negotiate employment agreements if done “in conjunction with and at the request of, a licensed talent agent”.

The primary role of an entertainment attorney is to protect his client with respect to the legal aspects of a deal. As such, clients stand to benefit where they engage the services of a talent agent who has a law degree and has also practised as a lawyer.

With regards to the art of deal-making in the current age, there are many different opinions as to how negotiations should be conducted.  Some common principles espoused by talent agents in the relevant literature are:

1. To always leave your adversaries dignity intact – you never know when you will be negotiating with them again.
2. Only commence negotiations with regards to a project when you are certain that it will be a commercial/critical success.
3. Know what your client’s walk-away point is.
4. Studios negotiate according to precedent. Know how much they will bend/what they will be willing to pay.
5. Form relationships with people who you will end up negotiating with. When there is trust and respect, a deal can often be reached that is fair and reasonable.

THE CHANGING LANDSCAPE

The emergence of reality programming has meant that TV series budgets are shrinking. Gen Y are using the Internet, mobile phones etc at an unprecedented rate and this means that more and more advertising dollars are being directed towards these communication mediums. In addition to this, those watching TV are increasingly using technology such as TiVo to skip over commercials.

Branding and merchandising is also becoming a huge source of income for talent agencies. Packaging a celebrity personality creates strong brand recognition which equates to increased revenue.

Studios and networks are attempting to expand the scope of required services from projects to include work for the Internet, video games, extended content etc.  Obviously, talent agencies need to be allowed to participate in the revenues generated by these ancillary areas.

In the current environment, a talent agent will need to consider every possible source of commercial exploitation of a project, including: pay-per-view, VOD, electronic sell-through, online and digital distribution, cellular and wireless distribution, live attractions, video games, ringtones, publishing, merchandising, commercial tie-ins … what’s next?!

Gene works in the Los Angeles office of Abrams Artists Agency. He is a member of the Beverly Hills Bar Association, has practised commercial (including entertainment) law in Sydney and London, as well as working as a talent agent for a Sydney firm. He has a business degree, a law degree with honours, a post-graduate diploma in legal practice and has completed six subjects of a Masters of Laws.

First, I think Seth is correct.  Obviously, or I wouldn’t be posting.  Right off, I’m thinking about whether I’m one of the “mass” group (those that ignore ads) or in the early adopter group (call me a laggard and we might have beef).

With few exceptions, I’m in the “mass” group.  Those exceptions are few because there’s only a few things I’m truly interested in or find extremely important. Sound familiar? I early adopted Google Chrome, for example, because I spend so much time on the web and was not happy with Firefox, let alone Explorer.  But for the most part, I’m in the mass group even in areas of interest such as music.  There’s just too much available NOT to apply a significant filter and just plain ignore most of what comes across my field of perception.

I was at Bonaroo several years ago.  It was fun, but I actually remember very little.  Substance-intake aside, I do remember a band that I didn’t stay to watch (I went to the Medeski, Martin, & Wood tent instead): The Flaming Lips.  Why did I remember?  Because everyone was talking about them and how crazy they were and that they jumped around in bunny suits.  This is just an anecdote that doesn’t prove Seth’s point.  My point is, The Flaming Lips achieved the first levels of marketing success–recognition and recall–just by being remarkably different and garnering the interest of a select group of early adopters.  (For those that haven’t heard of them, The Flaming Lips are not new; they’ve been  successful over the long term and are known for exceptionally bizarre live shows.)

I came across an interesting example in another area of entertainment with the guerrilla-advertising campaign for Dante’s Inferno, a video game based on the first part of a medieval epic novel in which a man descends through hell.  Their advertising campaign was most successful when it targeted the early-adopting and truly interested few: Video Game Bloggers! (there’s some fun stuff to read in this breakdown of the campaign)

Okay, so if this has piqued your interest to consider how this might help you, here’s my thoughts on the how:

The Agent

How are we and what we offer clients remarkable?  Across the way at SportsAgentBlog, we find a piece on the potentially damaging result of agents’ intuitive knowledge that remarkable is important to marketing.  However, the difference for those that promise big results and what Seth was talking about is to focus on whether the PRODUCT is remarkable (i.e. the agent and what he’s doing).  The RESULTS, which are the subject of so many false promises, are to be judged by the consumer/entertainer/client.

The Client

How are our clients and what they offer remarkable?  I think this is an area where agents can start to contribute much more value to clients.  The old saw is that artists don’t want to sell out and adhere their art to the “business realities” espoused by agents, producers, et al.  The revelation based on fringe sales is that it’s not about selling out or buying in, but pushing the art to the extreme and striving for perfection.   And if that artistic extreme incorporates neo-strange oddness ala The Flaming Lips bunny suits, that’s cool because they are remarkably different.

The Target

Lastly, we need to consider our clients’ clients; i.e. the consumer.  Who are the select few early adopters that care so much that they’ll spread the word and make your clients’ product successful?  For music, I am patting myself on the back some because I’ve written about this in earlier pieces: DJs that actually put shows together (unlike many U.S. terrestrial-radio DJs) are a perfect example.  For actors and many others, we realize there are folks between the artist and the end-consumer.  A film actress needs to self herself to a director before an audience of film-buffs can give the thumbs up and spread the word.  However, applying Seth Godin’s thought, we can see some other opportunities, such as focusing on getting exposure with film societies and (again) bloggers devoted to serious acting.

That said, there’s an implied point in Seth’s talk that will be very important to your client.  While “safe” is risky (because it’s near-guaranteed failure/mediocrity), “risky” is still risky–i.e. your client’s remarkable will not necessarily match-up with enough folks (or the right kind of folks) to proliferate via word-of-mouth or reach enough folks to make money.  In other words, the counsel we agents might find ourselves providing would-be entertainers is:

Commit all the way and make your art remarkable.  If that doesn’t grab people , then we’ll have the opportunity to reinvent ourselves and give it another go.

I’ve been watching as many videos over at TED recently as my spare time allows.  TED, for the uninitiated, is a gathering (in person) and collection of mostly videos (on the web) by some exceptional people doing and thinking some exceptional things.

Take a look… I’ll wait.  Okay, here are the Cliffs Notes:

• The standard mass marketing approach is wrong because there are too many choices and people don’t have time.  The “mass” (the middle of the bell curve between early adopters and laggards) are really good at ignoring and often consider advertisement an annoyance.
• Successful marketing targets the products to a select few who really care about it then spread the word.   Example?  At the time, Steve Jobs was giving his talks to 50,000 nerds and the iPod was about 1-year old.  In the video there is also a staggering Pearl Jam example.
• “Safe” is risky.  Average products for average people is now risky.
• “Being very good is one of the worst things you can possibly do.”  It is boring.

So here’s the part where we need to think how to apply this as agents.  I’ll post my thoughts in Part II.  In the meantime, what’d you think?

If the movie flops and isn’t the blockbuster your client or the movie company expected, this clause may end up causing a lawsuit between the movie company and your client for breach of contract for failing to promote the movie.

For example, this summer Paris Hilton was sued by movie investors  concerning her 2006 movie, “Pledge This”  (I swear to you, like most other people on the planet, I’ve never heard of it until I read about the lawsuit). Investors sued her for more than $8 million for failing to honor her contract in promoting the movie.

While I don’t know the exact terms of the contract, I do know it included provisions which stated that Paris would do the usual rounds of PR. According to Paris, she lived up to her end of the bargain.  She stated that  ”[a]ny chance I got, any red carpet, any press, if I was doing something for another product, even if I wasn’t asked about it, I would just bring it up.”  However, according to the investors, she rejected numerous TV talk shows, radio shows and magazine interviews despite the contract.

The judge ultimately ruled that Hilton was not responsible for the movie’s failure.  However, I’m sure it still caused quite a headache for her agent.  Therefore, as an agent,  it is important to negotiate public relations provisions concerning a movie which state exactly what obligations your client will do and what they are not responsible for in terms of promoting the movie that is the subject of the contract.

There is no doubt that the quality of a filmmaker’s script is a paramount consideration in order for an indie division to consider the script, as well as validation from a trusted professional, such as an attorney or another reputable talent agent.

It is also important for a film to already have at least one key attachment already committed to the film, such as a reputable director or actor. Filmmakers also have to have produced a short for their project.

How do indie filmmakers attract A-list talent to their film? A pay-or-play offer is definitely required. This is where private funding or a foreign sales agent is used to back financial offers to stars.

Lets start by saying that if you’re thought is to finance the film yourself, this is a darn near impossible task. There are not enough payday loans in the world to finance the distribution of a film, especially an indie film, never mind paying the actors, camera personnel, etc.

How much do agencies receive for packaging? They will usually charge a percentage on commissionable elements (writers, directors etc who are clients) – this is around the 10% mark, as well as charging a packaging fee if the film was financed with the assistance of the agency. Packaging fees are often in the vicinity of two percent of the budget of the project, with a floor.

Agencies will often distribute films domestically, as well as placing the films with foreign sales agents. The sales fee charge is a percentage of the sales price and is usually about 10 percent.

Naturally, indie divisions are also concerned with ancillaries flowing from the films, such as sequels, TV applications, stage adaptations, and game and mobile content.

A similar “packaging” system operates with TV.

Packaging fees can be much more lucrative for an agency than straight commissions from clients because fees include participation in the back-end. An agency will usually receive a percentage of the license fee of the show payable when an episode is produced, a percentage of the budget of the show, which is recoupable when the show is in a net profit position and a double figure percentage of the back-end, when the show is syndicated.

The great thing about this model is that studios pay the packaging fees – which are built into the cost of the show. Studios are often happy to pay these fees because agencies often put multiple elements together and act as a development executive.

Gene is a talent agent and lawyer. He has a law degree with honours, and a business degree. He is a member of the Beverly Hills Bar Association.

Once a recording contract has been secured, the manager acts as the artist’s liaison with promoters, marketers, lawyers and other industry professionals.

One of the most important aspects of a music manager’s job is to establish goals and guidelines for the artist’s career development. The manager is, amongst other things, the coordinator of the release and marketing of albums, tour schedules and publicity campaigns.

A good manager should be familiar with the construct of commercial contracts in ways that musicians aren’t. As well as arranging performances, a good manager should also be able to negotiate contracts to bring musicians other types of work, such as radio or TV appearances, appearances in commercials and finding sponsors for tours.

Many agents/managers started out with large commercial agencies. For example, billionaire David Geffen, founder of Asylum Records started in the mailroom at WMA. He became one of the first agents to represent only music groups and was one of the first to identify the big-business potential of rock. He then proceeded to run his own record labels with artists like the Eagles and Guns N’ Roses.

The best managers often have a background in business, sales and law. Becoming a successful manager takes passion, contacts, discipline, hard work, people skills, sales expertise and excellent legal skills – whether these are required for a challenging negotiation or complex contract.

A musician should always consult a lawyer before executing a contract with a record label or a music publishing company. Contracts are always open to negotiation. A lawyer who is familiar with music contracts can provide valuable advice and can often negotiate on the artist’s behalf. Where an artist’s manager is also a practicing lawyer, an artist can save considerable time and effort as they often won’t need to obtain independent legal advice.

Good producers must have a good understanding of legal and business concepts. Producers are conscious of production costs and are always trying to minimize such costs. The business acumen and negotiating skills of a producer are often far superior to those of an actor, whose discipline is of a creative, as opposed to business nature. As a result, actors rely on their agents to have training in law and/or business in order for them to negotiate effectively.

In the past, agents acted more like managers, assuming responsibility for such things as introducing clients to studios and producers and handling the media. However, agents have increasingly confined themselves to the central task of sending actors to auditions and negotiating the commercial and legal terms of the resulting deals. As a result of this, actors have turned to personal managers to do the things that agents used to do.

In some US states (most notably, California), state legislation prohibits managers form soliciting employment or negotiating deals. This is not the case in other countries, such as Australia.

In those US States that legislate agents, managers are not subject to the same financial interest restrictions that govern agents.

This legislative scenario allows managers to use the talent they manage in TV productions and films that they produce, for their own financial benefit. Agents are prohibited from doing this.

These restrictions have meant that the major players such as CAA and WME have had to be innovative and entrepreneurial in their approach to talent management.

Many agencies have expanded their highly profitable music touring departments. Agencies such as Paradigm have setup a film-financing division. Film and TV packaging has increased. Firms are constantly looking to tap into new media and endorsement opportunities or secure financing for deals that give unprecedented ownership and monetary upside that studios never grant.

Whilst demand for films in the US is waning, demand from China and India is rapidly increasing. These markets provide opportunities for agencies that are different to any experienced in the entertainment industry to date.

Regardless of whether they are a ‘manager’ or ‘agent’, these Asian opportunities will no doubt be pursued with gusto. The activities of agents and managers in places such as India and China will also be less regulated and provide more opportunities.

Ovitz as a talent agent, managed major film stars such as Tom Cruise, Dustin Hoffman, Kevin Costner, Michael Douglas and Sylvester Stallone.  In addition, he managed directors such as Steven Spielberg and Sydney Pollack. Ovitz was credited by other Hollywood power brokers with putting together the major elements of hit films such as Rain Man, Cliffhanger, and Jurassic Park. However, Ovitz’s power extended far beyond the creation of entertainment projects, as he used his deal making skills as an investment adviser for several industry transactions including Sony’s 1989 purchase of Columbia Pictures for $3.4 billion, the French bank Credit-Lyonnais’ rescue of MGM in 1993 and Matsushita’s purchase of entertainment conglomerate MCA for $6.6 billion in 1990.

Furthermore, Ovitz and his CAA army made a big impact on the advertising industry, as they won the assignment of Coca-Cola’s global advertising account in 1991. This assignment was aimed at television audiences and to innovative commercials. Not only did CAA produce the “Always Coca-Cola” advertising campaign, but also successfully popularized Coke-drinking computer animated polar bears, which we see even now in 2009.

Ovitz had a leadership strategy where his clients and deal making skills were evident in his earlier work as a television “packager.” A package is where an agency combines the elements of a proposed program, selected actors, scripts, and a director from their stable of clients. Then an agency will shop this “package” to the networks for approval and financing. This pitch and package is then agreed among investors, clients and the agents to make. However, in some cases it is known that agents themselves can receive 10% of any deal that is formed. Then the talent agency receives an overall packaging fee from the network and a percentage of the profits. In the 1970s, CAA was the first agency that packaged television programs, such as the game show the Rich Little Show and the Jackson Five Show.

Ovitz also worked with companies to help develop their new strategies in the technology industry, such as being a consultant to AT&T and to the Computer baron Bill Gates, the head of the computer software giant Microsoft. Under Ovitz’s authority, CAA also consulted with Bell Atlantic, Nynex, and Pacific Telesis to create Tele-TV. With Ovitz’s wisdom and knowledge, companies felt secure and safe when dealing with the super agent, as he used savvy business skills to lure in clients and create new channels for sponsorships and advertising, such as packaging deals and using digital media to create new market revenue.

Due to Ovitz being a prominent figure in Hollywood, he would go on with CAA to aggressively sign other talents agents and their clients. This not only increased CAA’s net value, but made the agency an international powerhouse. However in 1995, the talent industry was baffled when Ovitz decided to sell his stake in CAA and become the president of the Walt Disney Company. With this move to Walt Disney, chairman Michael Eisner made Ovitz in charge of Disney’s film studio, television production company, theme parks and resorts. Ovitz had authority in the merger and acquisition of Disney’s $19 billion investment of Capital Cities/ABC. Ovitz also integrated the companies’ products through providing various media channels, which included film, animation, television programming, publishing, cable television, and the national broadcast network, ABC.

From the early success of Ovitz’s leadership back in 90’s, CAA is still continuing to dominate in Hollywood. CAA currently represents A-list and emerging stars in movies, television, music, and sports, such as Lebron James, Will Smith, Ludicris and Oprah Winfery. This impressive list of clients can only come down to a factor: could CAA have done it without Ovitz? For an agency that started out on top of a pizza parlor in downtown LA and now dominating the industry, I’m not sure if CAA could of done without Ovitz’s leadership capabilities. What can we learn from Ovitz and his credentials? Well if you’re an inspiring agent, you need to be tenacious, have courage, think smart, communicate well, build relations and know what you are going for in the short and long term. CAA has kept this strategy in place and are ever climbing to be the best in the industry, but only time will tell if the outstanding CAA bubble will burst.

In the show, Gold is renowned for his arrogance, bravado and for having the vernacular of a street pimp mixed with a college grad. He’s a bully but has an unusually likable character that associates say is characteristic of Emanuel as well.

Many believe that the loud-mouthed Gold character portrayed in the show is a caricature of Emanuel, who in his younger days was described as volatile but is said to have mellowed considerably in recent years. Even Emanuel has acknowledged that there are aspects of himself in Gold.

However, what’s beneath the surface of the real-life Ari Gold? Emanuel is the younger brother of Rahm Emanuel, who is the Chief of Staff to President Obama’s administration. Ari Emanuel founded the ‘Endeavour Talent Agency’, which recently merged with powerhouse agency ‘William Morris’. The combined behemoth is now known as the ‘WME Agency’ and is the largest talent agency in the US, apart from CAA. Emanuel represents the likes of Martin Scorsese, Mark Wahlberg (interesting, considering that Wahlberg is executive producer of Entourage) and Matt Damon.

Ari Emanuel recently articulated his vision for the future of entertainment agencies – it could have come straight from Gold’s mouth:

“In order to survive, talent firms are going to have to do more. They must stop being simple deal-makers [and] become “mega-agencies” – vast, multi-faceted companies with marketing departments, events divisions, and new media offshoots which help clients to leverage income from a wider variety of sources.

Agents will also have to take a more pro-active role in the actual creation of films, making them more likely to be called upon to “package” a production: attaching directors, producers, and actors from their own stable to a particular project, before selling it to the studios.”

If Emanuel’s vision does come to fruition, how will his ego cope?

Dance music is big business!

One of my clients is currently seeking financing for a movie about a New Yorker from a blue-collar, traditional Italian family who dreams of one day being as big as DJ Tiesto (who is the world’s penultimate DJ and will star in the movie).

This is a common dream for many. The notion of being a DJ conjures up images of glamour, beautiful people, jaw-dropping beats and exotic locations, such as Ibiza.

So what does it involve on a day-to-day basis?

Identifying talent

There seem to be three common qualities that managers look for in DJs:

1. A DJ who already has kudos and respect amongst other DJs.
2. Earning power. Good managers look for DJs who are playing at marquee clubs and earning good money.
3. DJs who have an edge, a certain ‘jena se qua’ that sets them apart from their contemporaries.

Everyday tasks

Managers need to:

1. Help DJs to realise their full potential;
2. Interface with clients to make sure their needs are met and they receive a professional, first-class service;
3. Ensure that all legal and financial obligations are met;
4. Look after all promotional aspects for a DJ;
5. Assist DJs with personal issues; and
6. Produce events and develop nights/promotions for clubs that DJs perform in.

Differentiating a DJ from ‘the pack’

Promotion, promotion, promotion!

Managers need to pass out promotional mixes and make sure that all PR-related aspects are professional and tight. Twitter, Facebook, MySpace pages, all need to be constantly updated. Press kits should also be all-inclusive. From the imaging that gets used on all marketing and promotional materials to the actual performance, the manager wants to leave an indelible mark, a mark that distinguishes the manager as being a consummate professional.

Mistakes

A manager should never try and get his DJs to copy the style of other successful DJs. This is not conducive with good brand development and management.

A manager should also ensure that his acts are always on time, professional and respectful. Soundchecks should always be done well in advance of any performance.

Don’t assume anything! As a manager becomes bigger and more successful, they should pay even more attention to details. People will be expecting more and as a result, it is up to the manager and the DJ to step-up.