The State of Delaware is the second smallest state in the US. It is bordered by the states of New Jersey, Pennsylvania and Maryland. This gives its inhabitants easy access to New York City and Washington DC.

LLCs (Limited Liability Companies) combine the most beneficial aspects of a corporation and a limited partnership. This form of entity protects the personal assets of its owners, while providing them with “pass-through” taxation. The Delaware LLC provides similar benefits to a traditional ‘offshore’ company. Business transactions conducted by an LLC are usually tax free where the members of the LLC are non-resident aliens.

Other benefits of forming a Delaware LLC are as follows:

• Due to the limited liability status of the LLC, the law protects the members from the debts and other obligations of the LLC.
• A Delaware LLC may be fully owned by non-resident aliens.
• There are minimal compliance requirements.
• Anonymity of members may be preserved by the use of nominee shareholders.
• Delaware maintains a separate corporate law system, called the Delaware Court of Chancery, that uses only judges who are corporate law specialists.
• One person can hold all officer positions and serve as the sole director of the LLC. Directors names are not required to be listed in the articles of incorporation.
• No minimal capital investment in the LLC is required.
• As Delaware is a US state, LLCs have access to the extensive range of tax treaties between the US and other countries.
• Delaware LLCs are ideal as holding companies or companies that own trademarks, patents and other IP (a major concern for many entertainment entities).
• Foreign investors may be able to participate in grants and other incentives, such as the Delaware Competitiveness Fund and the Technology-Based Seed Fund.
• Even if income is apportioned to Delaware, it is subject to an extremely low rate of tax.
• Delaware does not impose dividend, interest or royalty withholding tax.
• Delaware has no thin capitalisation, controlled foreign company or transfer pricing rules.

Due to the nature of the industry, many entertainment entities are global in nature. Due to the favorable corporate, tax and IP laws in Delaware, it is a very attractive jurisdiction for global entertainment entities to establish a holding company or presence.

Please contact the author for further information.

This article does not and is not meant to constitute legal or business advice. It is for informational purposes only and independent legal and business advice should be sought prior to incorporating in Delaware. The author does not guarantee the accuracy of statements made in the article. The author will not be held liable in any way for any reliance placed on the information contained in this article.

The nasty thing about it is, nobody ever remembers my genius prognostications (maybe because they’re more mundane than genius, who knows?).  So here’s a few ideas based on my recent reading of The Business of Sports Agents by Shropshire and Davis:

• Some agencies will begin including a percentage ownership clause in client-contracts. This can serve both parties.   Providing near- and long-term incentive for clients to succeed within the parameters of the agent-client relationship will help foster mutual commitment and client behavior that not only is in the client’s best interest directly, but indirectly through promotion of the firm and other actions supporting fellow clientele.
• Non-profit organizations will be formed for the purpose of educating entertainers (including athletes), the public, etc. on matters important to the entertainment industry. Employment of entertainers within these organizations will provide a baseline income and training for otherwise unemployed  or partly-employed entertainers.   The training aspect is as important to a representative as the income aspect is to the entertainer because education about the “biz” is often viewed as a key component to an entertainer’s success (especially long-term success).
• Small and mid-size agencies will extend their breadth of services well beyond contract negotiation and job-hunting. This can be accomplished by various methods any of which must be aimed at reducing the costs associated with running mega-firms (i.e. one-stop-shops).   Sharing the burden of work with the entertainer via guidance and counsel and utilizing a network of small firms offering various services are among the possible approaches.
• A national organization by and for entertainment agents will establish a code of ethics and licensing bureaucracy.

Luckily, my taking credit has very little to do with ensuring that I am, indeed, first to make these claims.  And because I’ve not done the research to ensure otherwise, these ideas may already be proliferating unbeknownst to me.  What say you readers?  Who should be taking credit in my stead?

Insurers declined to take on the financial risk of the shows not going ahead, apparently concerned that the singer, who appeared frail at the unveiling of the concerts in March, would not be able to complete the run of concerts.

AEG’s chief executive, Randy Phillips advised that the company owned by the American billionaire, Philip Anschutz, was willing to “self-insure”, and shoulder the potential cost himself. By doing this, it shows the determination of AEG’s plan to get Michael Jackson on top of the music business, which he dominated.

Randy Phillips also advised, “It’s a risk we’re willing to take to bring the King of Pop to his fans,” insisting Jackson had passed a thorough medical examinations “with flying colours”. AEG declined any allegations of pushing the pop star to his limits when practicing for events.

Ray Waddell, a live entertainment expert from Billboard magazine, recently reported that the limited cover AEG managed to obtain did not include Jackson’s non-appearance despite this typically being a basic component of such policies. He said that “if AEG had a policy, that doesn’t mean Jackson’s death, and the losses incurred, would be covered,” He also commented, “If Jackson’s death was a pre-existing condition, drug or alcohol related, a normal cancellation policy would not cover that, even if he had passed a medical exam.”

The original buyers of all 750,000 tickets for the concerts, which were priced at £50-£75, are expected to be given a full refund. However, fans that bought tickets for thousands of dollars through internet auction websites like eBay, will not get their money back. Tickets for the concerts sold out in one morning, after being bought at a rate of 11 per second. This incredible rate of ticket sales shows that the king of pop had retained his title as the king of global music.

The concerts would have been based at London’s O2 arena, however due to the passing away of the star, O2 management advised the public, “At this moment our thoughts are with Michael’s children, family and friends. We will announce ticketing details in due course.” AEG and the O2 must now either find acts big enough to fill the 15,000-capacity arena for the 50 dates, which span in July, or let the venue sit empty.

Predicting the financial fall out would be messy as well as expensive, ultimately, AEG may have to file a claim against Jackson’s estate. Also, since the king of pop has hundreds of millions of dollars of debt, and a couple of multimillion-dollar lawsuits pending, the worth of that estate is very much in doubt.

The Leadership of Howard Stringer.

Howard Stringer, the CEO of Sony, has already had his hands full trying to return Sony to profitability this year with buyouts, attracting investors and marketing Sony as the one stop station for entertainment. But now he is doing far more with being one of the most powerful men in entertainment.

Sony’s shareholders approved the restructuring of the management of the company that will effectively add leverage to the stripes of Stringer’s chairman and CEO titles at the Japanese entertainment and electronics giant.

Stringer, 67, is tackling a steep downturn in Sony’s core electronics business, which includes sales in TVs, cell phones, Walkman music players, Vaio computers and other hardware like the PlayStation 3. The electronics slump led to the company’s first fiscal year loss in 14 years. Also, a downturn in consumer spending of each brand means less profit for Sony.

On Friday, Stringer told a room of 8,300 shareholders in Tokyo that he’s focused on bringing together Sony’s movie, TV, music, videogame and businesses to develop more products and services for the digital age. We understand already that Sony is competing for a contract that allows films to be published through a specialized digital format through Internet purchases; they also want to expand their blu-ray brand. This will make Sony a premium brand in digital publishing for movies in the future and will revolutionize how people watch movies across the world.

“We’re working on profit recovery and growth strategy. That’s what we’re committed to,” Stringer said. This will include adding wireless connectivity to its devices; rivals such as Apple and Samsung have already benefited from implementing such a change. Sony wants to channel their products in the same direction as Apple in terms of the ‘I’ product range but advance it with digital media publishing. This will ensure that Sony will maintain its status as a big player in the entertainment business and leverage their market value for future products.

“In the 20th century, this company created great champion products,” Stringer told shareholders. “In the 21st century, other companies took our hardware like the Walkman and added network capability and turned it into the iPod. We are not going to be beaten again in the network age.”

Sony still needs to figure out a way to make the PlayStation 3 more of a must-have in households and keep game makers happy. An idea has come to make the PlayStation 3 an all round media system in the home which can cover playing games, movies, internet and downloads but updating the system when technology advances, such as playing digital media from films.

Within the movie business, Sony Picture is one of the major players in Hollywood and in other film corporations around the world, such as Asia and Europe. They have produced some of the biggest movies, such as Angels and Demons and 2012. In terms of movies, Sony has maintained its position of being a major film production company and has the budget to produce anything.

“We have not finished,” Stringer said. “We have a long way to go.” This comment shows that Sony as a global business has to work on developing new ideas and products to the market that can impact the entertainment business in a positive way. This regime will test Stinger’s ability to lead a company out of a recession and make profits for Sony.