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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.
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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.
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