Sunday, August 30, 2015

A "Sunset Clause" in a Management Agreement essentially means that the manager still gets paid a commission after the deal ends on money the artist is still making off deals the artist signed during the term of the Management Agreement, but at a reduced rate from the what the commission percentage was during the term of the Management Agreement. For example, if an artist signs a 3 album deal during the term of the Management Agreement and the 3rd album comes out after the Management Agreement Term is over, the manager still gets paid a commission for the money the artist makes from that release, but at a reduced commission rate for a certain number of years post-term (on average 3-5 years), and the rate goes down to eventually 0% (e.g., 1st year post-term = 15%, 2nd year post-term = 10%, 3rd year post-term = 5%, thereafter 0%). Ben McLane Esq

Saturday, August 15, 2015

Music Business/Law Tips - "Consumer Data = $$$"

Universal has formed The Global Music Data Alliance (GMDA) which will analyze billions of pieces of digital consumer data to hopefully provide new revenue streams to labels and artists. Essentially, GMDA will inspect behavioral patterns of listeners/buyers (e.g., what songs a Democratic voter listens to) to find patterns that can be used for target marketing. This should allow artists to monetize their fan bases more effectively, and allow advertisers to better figure out where to put their ad dollars/which artists to tie in with. Ben McLane Esq

Saturday, August 1, 2015

Music Business/Law Tips - "Employee vs. Independent Contractor"

In the entertainment business there are a lot different employment situations: part-time, full-time, consultancies, internships, working remotely, etc. One of the most common arrangements is for someone to be an independent contractor. However, there are legal ramifications to this status, and often neither party really knows exactly if the worker is considered an independent contractor or a true employee with benefits. Although there is no exact definition of an "independent contractor", the California Department of Industrial Relations provides 12 factors that a court would consider if there was ever a dispute: 1. The most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. 2. Whether the person performing services is engaged in an occupation or business distinct from that of the principal. 3. Whether or not the work is a part of the regular business of the principal or alleged employer. 4. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work. 5. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers. 6. Whether the service rendered requires a special skill. 7. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision. 8. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill. 9. The length of time for which the services are to be performed. 10. The degree of permanence of the working relationship. 11. The method of payment, whether by time or by the job. 12. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests. Ben McLane Esq