WEBVTT - Don Passman 0:00:08.600 --> 0:00:12.440 Welcome, Welcome, Welcome back to the Bob Left That's Podcast. 0:00:12.920 --> 0:00:17.320 My guest today is attorney done Passman, who literally wrote 0:00:17.320 --> 0:00:21.280 the book on the music business. Don hey, Pop, thanks 0:00:21.280 --> 0:00:25.239 for having me. Okay, now I can see you're in 0:00:25.280 --> 0:00:27.080 your home, although it looks like you're in the oval 0:00:27.160 --> 0:00:30.760 office here on the zoom screen. Uh, how has your 0:00:30.800 --> 0:00:35.080 practice changed since you've been at home. Well, interestingly, I 0:00:35.120 --> 0:00:38.120 can do what I do pretty seamlessly at home. Um, 0:00:38.240 --> 0:00:41.040 we're set up with computers, I'm set up as zoom. 0:00:41.080 --> 0:00:43.919 I'm set up with uh, you know, phones and so 0:00:44.000 --> 0:00:47.040 forth and emails, and I can get an awful lot done. 0:00:47.080 --> 0:00:49.280 I can access the files in the office. I can 0:00:49.880 --> 0:00:52.920 I can take care of whatever it needs to be done. 0:00:53.200 --> 0:00:55.960 It's changed in the sense that obviously there's no touring 0:00:56.400 --> 0:00:59.920 because everything is shut down. It's changed what the artists 0:01:00.000 --> 0:01:03.360 are doing in terms of what you just physically can 0:01:03.400 --> 0:01:05.959 do in this environment. Um, things that I at least 0:01:05.959 --> 0:01:09.000 wouldn't have intuitively thought about, Like, for example, you can't 0:01:09.000 --> 0:01:11.640 make videos in this environment, so you can't do the 0:01:11.640 --> 0:01:14.399 same kind of marketing. You can't do personal appearances, you 0:01:14.440 --> 0:01:16.280 can't do a lot of things that you would normally 0:01:16.280 --> 0:01:19.000 do to market and promote product. But other than that, 0:01:19.040 --> 0:01:22.600 people can still record, albeit remotely, and people can still 0:01:22.920 --> 0:01:25.800 make music, still write music, and uh, there's a lot 0:01:25.840 --> 0:01:29.560 of deals going on. Okay, since so much of the 0:01:29.600 --> 0:01:33.520 business is closed down, your particular business in work, is 0:01:33.520 --> 0:01:36.320 it any slower or as busy as ever? No, it's 0:01:36.360 --> 0:01:39.600 busy as ever. I was actually surprised by that and 0:01:39.720 --> 0:01:43.360 maybe even a little disappointed. Maybe there'll be a slowdown, 0:01:43.400 --> 0:01:46.560 but it's it's been extremely busy, and truthfully I like 0:01:46.640 --> 0:01:48.720 that better. It makes the days go by. Okay, So 0:01:48.760 --> 0:01:51.040 you said there are a bunch of deals in the offing. 0:01:51.080 --> 0:01:55.080 What kind of deals? Um, you know, buying and selling 0:01:55.120 --> 0:01:59.440 of catalogs for example, executive deals people are making, publishing 0:01:59.480 --> 0:02:04.320 songwright deals. People are still making record deals, management deals, 0:02:04.680 --> 0:02:10.040 you know, the sponsorship less so now perhaps, but still active. So. 0:02:10.280 --> 0:02:13.200 And then there's of course the whole situation with people 0:02:13.240 --> 0:02:15.720 who made deals during COVID that now aren't working that 0:02:15.800 --> 0:02:18.840 we have to sort out. Okay, can you address that 0:02:19.000 --> 0:02:22.080 about the deals that aren't working and whether insurance comes 0:02:22.080 --> 0:02:26.400 in and how amenable people are two changes and adjusting. Well, 0:02:26.639 --> 0:02:30.240 people are pretty amenable. I mean everybody recognizes this is 0:02:30.280 --> 0:02:35.400 something nobody could have contemplated. Um, everybody's businesses is challenged 0:02:35.440 --> 0:02:40.000 seriously and fundamentally, and I think for the most part, 0:02:40.040 --> 0:02:42.840 everybody has a long term view, which is that you know, 0:02:42.919 --> 0:02:45.160 we can't, we can't. I mean, just to pick an 0:02:45.160 --> 0:02:49.200 example of tours, because it's the most obvious if everyone 0:02:49.240 --> 0:02:51.880 got together and if they had the contractual right, which 0:02:51.880 --> 0:02:55.119 not everyone does to get paid during COVID, but they 0:02:55.400 --> 0:02:58.320 crushed the promoters for the you know, out of business 0:02:58.320 --> 0:03:01.640 when they have no income coming. Nobody thinks that's the 0:03:01.720 --> 0:03:03.960 right thing to do or the long term thing to do. 0:03:04.120 --> 0:03:07.119 So things are getting rescheduled, people are working together, people 0:03:07.160 --> 0:03:11.120 are taking discounts, people are deferring payments to the extent 0:03:11.200 --> 0:03:13.440 they can, and and for the most part it's it's 0:03:13.480 --> 0:03:19.160 worked out pretty amicably. Okay, Uh, Since you're doing these deals, 0:03:19.800 --> 0:03:23.680 when are your promoters wanting to start again, whether that 0:03:23.800 --> 0:03:26.120 happens or not. When are they trying to book for 0:03:27.440 --> 0:03:28.919 you know, I'm not on the front line of that 0:03:28.960 --> 0:03:32.240 because the agents are. But from the intel that I've gotten, 0:03:32.840 --> 0:03:37.360 nobody thinks anything is going to happen before summer of uh. 0:03:37.400 --> 0:03:39.640 And honestly, I think it could be more like the 0:03:39.680 --> 0:03:44.160 fall or even in it will directly depend on how 0:03:44.240 --> 0:03:48.120 quickly we have a medical breakthrough. Okay. The other thing is, 0:03:48.160 --> 0:03:52.280 have you uh been involved any issues of insurance people 0:03:52.280 --> 0:03:55.480 trying to claim whether companies are paying off whether you 0:03:55.520 --> 0:03:58.800 can get this insurance at this time? I have not 0:03:59.240 --> 0:04:02.480 recently been involved in that because nobody's putting up tours, 0:04:02.480 --> 0:04:05.760 so we're not dealing with the insurance issues. There are 0:04:05.800 --> 0:04:12.360 issues around whether insurance will cover it. It's very policy dependent. Okay, 0:04:12.440 --> 0:04:14.160 let's you know, let's break down some of the things 0:04:14.200 --> 0:04:15.760 you brought up. You said you're doing a lot of 0:04:15.760 --> 0:04:20.200 publishing deals. Everyone knows on the inside hypnosis is raising 0:04:20.279 --> 0:04:24.880 the value of catalogs. Uh. Do you think this is 0:04:25.040 --> 0:04:29.320 causing the action in the buying and selling of publishing catalogs. 0:04:29.720 --> 0:04:32.400 I think that's part of it. I think the other 0:04:32.480 --> 0:04:34.640 part of it is that we're seeing a lot of 0:04:34.640 --> 0:04:38.800 Wall Street money looking at publishing as a steady source 0:04:38.839 --> 0:04:43.240 of income with potential upside and uh and Wall Street 0:04:43.279 --> 0:04:46.480 like steady sources of income as an investment. So we're 0:04:46.480 --> 0:04:49.159 seeing all kinds of new players come into the marketplace 0:04:49.560 --> 0:04:52.159 that want to do this, and so there's not a 0:04:52.200 --> 0:04:55.240 lot of inventory and a lot of hound snapping at 0:04:55.240 --> 0:04:57.360 the door, and I think that's the reason we're seeing 0:04:57.440 --> 0:05:00.440 such a surge in that. What kind of Wall Street 0:05:01.680 --> 0:05:05.200 movement have you seen? Um? Well, I don't want to 0:05:05.200 --> 0:05:07.960 get specific, but a number of investment firms or people 0:05:07.960 --> 0:05:11.800 backed by investment type firms that are funds you know 0:05:11.920 --> 0:05:16.920 that are that are you know venture capital type funds. Okay, 0:05:17.000 --> 0:05:22.719 let's talk specifically about Hypnosis Merk's company. He wants to 0:05:22.880 --> 0:05:28.400 own the publishing entirely, and he's paying a huge multiple. Obviously, 0:05:28.520 --> 0:05:31.760 as an attorney, you listen to what your client wants. 0:05:32.240 --> 0:05:36.039 But assuming the client didn't have opinion and opinion, what 0:05:36.080 --> 0:05:39.600 would you say about selling all the rights? I generally 0:05:39.640 --> 0:05:44.400 advise against it. Historically, everybody who has sold their song 0:05:44.560 --> 0:05:47.800 has regretted it. If you look back through history to 0:05:47.880 --> 0:05:51.240 pick an example, Uh, you know, led Zeppelin sold all 0:05:51.279 --> 0:05:54.960 the royalties on their catalog for what was a good 0:05:55.000 --> 0:05:57.400 deal amount of money at the time, but over history 0:05:57.440 --> 0:05:59.840 proved to be not such a great deal. Same thing 0:05:59.839 --> 0:06:03.120 with Elvis Preshley. The people that have sold off have 0:06:03.240 --> 0:06:07.159 generally regretted it. People that sold songs, people that sold 0:06:07.200 --> 0:06:10.200 publishing companies. You know have seen them go for bigger 0:06:10.279 --> 0:06:14.279 multiples further down the road. UM. So my general bent 0:06:14.560 --> 0:06:16.680 is there is a saying in the publishing business never 0:06:16.720 --> 0:06:19.839 sell a song, and my general bent is against that. 0:06:20.680 --> 0:06:23.440 On the other hand, there are a few specific circumstances 0:06:23.440 --> 0:06:27.000 where it can make sense. There's some tax advantages to selling. 0:06:27.080 --> 0:06:30.479 You can get capital gains rather than ordinary income for 0:06:30.560 --> 0:06:34.159 the money that you get. If your need of money, uh, 0:06:34.720 --> 0:06:37.000 you can sell it in that. But if you're if 0:06:37.040 --> 0:06:40.040 you're able to hang onto it for one thing, tax wise, 0:06:40.279 --> 0:06:43.320 once you die, you get what's called a stepped up basis, 0:06:43.560 --> 0:06:46.640 which means that your errors will be able to sell 0:06:46.680 --> 0:06:49.320 the catalog for the value at the time of death 0:06:49.320 --> 0:06:51.719 and not pay any tax on the sale. Of course, 0:06:51.720 --> 0:06:53.480 you're gonna pay a state tax on it if your 0:06:53.560 --> 0:06:56.599 state's large enough. Um, but you wouldn't pay any income 0:06:56.760 --> 0:07:00.520 tax on the sale at that point. And really I 0:07:00.640 --> 0:07:03.640 like to u to keep it through the airs. Now, 0:07:03.920 --> 0:07:07.360 having said that, in a situation where someone passed away 0:07:07.560 --> 0:07:09.840 and the airs are squabbling with each other or they 0:07:09.840 --> 0:07:13.560 can't it's too cumbersome to get everybody to agree to 0:07:13.680 --> 0:07:18.840 license a song or someone. You know, different situations, it 0:07:18.880 --> 0:07:21.280 does make sense to sell. And by the way, someone 0:07:21.400 --> 0:07:25.280 who is sophisticated and not going to just squander the money, 0:07:25.520 --> 0:07:27.360 who wants to sell it and thinks they can make 0:07:27.400 --> 0:07:30.080 a better return than they're publishing is giving them by 0:07:30.120 --> 0:07:32.960 putting it into different kinds of investments, that can make 0:07:33.000 --> 0:07:36.320 sense too. But that's rare, and my general band is 0:07:36.400 --> 0:07:38.760 don't do it. But obviously I have people who want 0:07:38.800 --> 0:07:41.000 to do it, and and we we've certainly done a 0:07:41.040 --> 0:07:44.840 lot of it. Okay, what about some of your clients 0:07:44.960 --> 0:07:47.320 or people you might be aware of who are cash 0:07:47.440 --> 0:07:51.840 poor and make most of their money for touring. Uh, 0:07:51.880 --> 0:07:54.640 if we're down for another up to eighteen months, what 0:07:54.800 --> 0:07:58.920 options do these people have for income? Yeah, that's that's 0:07:58.920 --> 0:08:01.120 a good question. I mean it depends, of course on 0:08:01.160 --> 0:08:04.960 who they are. If they have good songwriting or record income, 0:08:05.080 --> 0:08:09.320 that's where it's going to come from. Possibly there's an endorsement. Uh, 0:08:09.400 --> 0:08:12.600 you know some of them have. There's been this situation 0:08:12.640 --> 0:08:15.040 which I haven't had highans involved in, but I've I've 0:08:15.040 --> 0:08:18.480 heard about tangentially where people are you know, getting tips 0:08:18.600 --> 0:08:21.160 or trying to you know, some pay per view, although 0:08:21.200 --> 0:08:23.960 a lot of that's for charity. That generates some amount 0:08:24.000 --> 0:08:28.360 of money, but nothing like touring would. But generally it's tough. 0:08:28.440 --> 0:08:31.240 I mean, if you don't have income from other sources, 0:08:31.320 --> 0:08:34.360 it's going to be a rough period of time. Okay, 0:08:34.440 --> 0:08:38.400 talking about income in the future. There are cases where 0:08:38.400 --> 0:08:41.240 people have an interest in a record. A well known 0:08:41.320 --> 0:08:44.800 cases Todd Rundgren produced Bad Out of Hell of the 0:08:44.840 --> 0:08:48.120 meat Loaf record. Now, in his particular case, he sold 0:08:48.120 --> 0:08:50.080 all the royalties. I could go down that path. I 0:08:50.120 --> 0:08:53.760 know more about it. But there are people who sold 0:08:53.840 --> 0:08:58.560 royalties in records because they say it's very difficult to collect. 0:08:58.679 --> 0:09:01.960 Is the years go by and never never mind collect 0:09:01.960 --> 0:09:04.400 a hundred cents on the dollar. What do you think 0:09:04.440 --> 0:09:07.800 about that whole situation. I'm not clear why they think 0:09:07.800 --> 0:09:11.400 it would be difficult to collect. I know a number 0:09:11.400 --> 0:09:15.960 of cases where the new regimes come in, Uh they 0:09:16.000 --> 0:09:19.080 people work gets screwed up. The new people say they're 0:09:19.120 --> 0:09:21.960 not owed the money, and especially someone who needs the 0:09:22.040 --> 0:09:25.720 money has a very hard time going through the process 0:09:26.040 --> 0:09:29.439 and then ultimately even lawsuits in order to collect what 0:09:29.480 --> 0:09:32.440 they deserve. As I say, if you haven't experience that, 0:09:33.920 --> 0:09:36.360 I've not experienced it, but I don't doubt it happens. 0:09:36.720 --> 0:09:39.079 Uh you know, and if it's not for a lot 0:09:39.120 --> 0:09:41.320 of money, it's not going to be worthwhile to file 0:09:41.360 --> 0:09:44.440 the litigation. As I say, there may be situations where 0:09:44.440 --> 0:09:47.360 selling makes sense. You don't get capital gains on an 0:09:47.360 --> 0:09:50.719 income stream. By the way, if you're a producer getting royalties, 0:09:50.760 --> 0:09:53.240 you can't sell it for capital gains. You can only 0:09:53.280 --> 0:09:56.359 sell capital gains for an asset, which would be a copyright. 0:09:56.679 --> 0:09:58.559 In fact, if you don't own the copyright and you're 0:09:58.600 --> 0:10:01.400 only selling your stream as a writer, you don't get 0:10:01.480 --> 0:10:04.400 capital games for that either. So there's no particular tax 0:10:04.440 --> 0:10:08.160 advantage to that. It's just a question of uh. And 0:10:08.280 --> 0:10:11.080 if you want to do a cold financial analysis, how 0:10:11.160 --> 0:10:13.080 much money will they give me? Now? What can I 0:10:13.120 --> 0:10:16.040 earn on that money? Uh? Am? I better off doing 0:10:16.080 --> 0:10:18.640 that than keeping it and getting the income as it 0:10:18.679 --> 0:10:22.600 comes in. You're certainly hedging against it going down over time, 0:10:22.880 --> 0:10:25.440 but you're also losing the benefit if it goes up 0:10:25.440 --> 0:10:30.520 over time. So these are very fact specific situations and 0:10:30.679 --> 0:10:32.640 you have to analyze it based on who they are 0:10:32.640 --> 0:10:36.160 and what their needs are. Generally speaking, the people who 0:10:36.200 --> 0:10:39.480 make all this money, who are performers, are not that 0:10:39.840 --> 0:10:42.920 good at business. So to what degree if someone does 0:10:42.960 --> 0:10:45.360 get a lump sum, do you advise them what to 0:10:45.440 --> 0:10:50.600 do with the money? Well, I don't advise on financial matters. 0:10:50.679 --> 0:10:53.880 It's not my expertise, and I try to stay in 0:10:53.920 --> 0:10:57.520 the lane that I know best and not not get 0:10:57.559 --> 0:11:01.840 out of it. Uh, the financial it depends. I mean, 0:11:01.920 --> 0:11:04.560 some artists don't know much about business, but they have 0:11:04.640 --> 0:11:07.520 smart people around them and they listen to them. And 0:11:07.640 --> 0:11:09.720 if those people know what they're doing and think it 0:11:09.800 --> 0:11:12.400 makes sense on a financial basis, and you're not going 0:11:12.400 --> 0:11:14.679 to run out and you know by jets and yachts 0:11:14.679 --> 0:11:18.120 with the proceeds um, then it might make some sense 0:11:18.200 --> 0:11:22.240 to do it. But it's very very fact dependent. Okay, 0:11:22.400 --> 0:11:26.280 let's go back to the royalty situation. You make a deal, 0:11:26.559 --> 0:11:28.800 and let's just assume for the sake of discussion, the 0:11:28.840 --> 0:11:32.920 act actually goes into profits into royalties. What has been 0:11:32.960 --> 0:11:36.160 your experience with those acts getting paid and getting what 0:11:36.240 --> 0:11:40.839 they deserve? Giving the example of UH high price, attorneys 0:11:40.880 --> 0:11:44.720 like yourself negotiate the deals, but frequently the people who 0:11:44.720 --> 0:11:48.120 are doing the splits or someone uneducated in the back room. 0:11:48.640 --> 0:11:51.160 So to what degree if you experienced a problem here 0:11:51.160 --> 0:11:55.000 and if you could address that. Sure. Uh, it's gotten 0:11:55.080 --> 0:11:57.520 much better over the time I've been practicing law. It 0:11:57.640 --> 0:12:00.680 used to be that things were very a sloppy and 0:12:00.840 --> 0:12:03.560 very difficult. And that was also in the days when 0:12:03.600 --> 0:12:08.040 royalties were computed with this incredibly complex formula which basically 0:12:08.640 --> 0:12:11.080 was the answer to how can I give the artist 0:12:11.160 --> 0:12:13.520 a high royalty rate and pay them as little as possible? 0:12:13.840 --> 0:12:17.200 And they go through all these complicated matching nations, and 0:12:17.679 --> 0:12:20.559 you know, starting maybe eight or ten years ago, they 0:12:20.600 --> 0:12:22.960 simplified it down to you get a percentage of what 0:12:23.080 --> 0:12:26.160 we get. So and the major labels I find are 0:12:26.200 --> 0:12:30.440 pretty straightforward, and the major publishers pretty straightforward because we 0:12:30.480 --> 0:12:33.439 audit them regularly to check and you know, we find 0:12:33.480 --> 0:12:38.040 something or sometimes there's a contractual dispute. Sometimes they're honest mistakes. 0:12:38.320 --> 0:12:40.840 But for the most part, they're pretty straightforward. And the 0:12:40.920 --> 0:12:43.559 size of the audits compared to the old days when 0:12:43.559 --> 0:12:47.080 the companies played games are I find, are much smaller. 0:12:47.320 --> 0:12:51.480 There's still significant money and there's still things to argue about, um, 0:12:51.559 --> 0:12:54.200 but but for the most part, I think they try 0:12:54.320 --> 0:12:57.200 pretty well. When you get an independent labels, it can 0:12:57.240 --> 0:13:00.400 be a different story. It just depends on how sophisticicated 0:13:00.400 --> 0:13:04.359 their back room is, or whether they've got somebody doing it. Um. 0:13:04.400 --> 0:13:08.240 You know, I don't find as many people intentionally playing 0:13:08.280 --> 0:13:12.200 games as we used to, but I do find honest mistakes. 0:13:12.240 --> 0:13:14.200 And you know, some of the smaller labels can just 0:13:14.360 --> 0:13:19.000 be sloppy or maybe have cash flow issues going back 0:13:19.040 --> 0:13:23.439 to the majors. So forget forgetting someone who's an Internet 0:13:23.480 --> 0:13:28.840 phenomenon like Little Nasax. If you're an act and the 0:13:28.960 --> 0:13:33.400 label wants you and there's no bidding war, all you're 0:13:33.400 --> 0:13:37.560 saying almost all of the deals or a percentage of net, Well, 0:13:37.800 --> 0:13:40.440 they're not a percentage of net directly, they're a percentage 0:13:40.480 --> 0:13:44.240 of the labels receipts. They're closer to a percentage of gross, 0:13:44.280 --> 0:13:47.600 although there's issues around what gross means, particularly when you 0:13:47.640 --> 0:13:51.120 come to foreign territories. But it's a percentage of what 0:13:51.160 --> 0:13:54.880 the label receives. Correct. Okay, so let's just talk about 0:13:54.880 --> 0:13:58.200 domestic money. We sign with one of the three major labels. 0:13:58.640 --> 0:14:02.760 What would be the rain of percentage that you would 0:14:02.760 --> 0:14:05.560 make a deal for both an established act and a 0:14:05.679 --> 0:14:09.240 developing act. Yeah, developing act would probably be in the 0:14:09.360 --> 0:14:14.200 fifteen to eighteen to twenty percent range, depending on bargaining 0:14:14.240 --> 0:14:17.959 power UH an established act, and sometimes you can get 0:14:17.960 --> 0:14:21.040 a little bit more on streaming. UH. An established act 0:14:21.360 --> 0:14:24.400 could be in the twenties, and again with a bit 0:14:24.440 --> 0:14:27.680 more on streaming. When you're getting into really superstar ranges, 0:14:27.760 --> 0:14:29.840 you can get into all kinds of different things like 0:14:30.120 --> 0:14:32.880 shares of profits. And indeed, some of the new artists 0:14:32.880 --> 0:14:35.480 that are hot with bidding wars can get you a 0:14:35.520 --> 0:14:39.280 share of profits and distribution type deal where they own 0:14:39.320 --> 0:14:42.080 the masters and they just allow the company to distribute 0:14:42.080 --> 0:14:44.640 it for a period of time. Uh. And you know 0:14:44.760 --> 0:14:48.200 all kinds of things in between. So let's just assume 0:14:48.240 --> 0:14:51.240 I have for the second numbers, I have deal. What 0:14:51.320 --> 0:14:55.480 would be taken out of the gross Traditionally, well, under 0:14:55.520 --> 0:14:59.200 today's formula nothing. Uh, it would just be of the 0:14:59.200 --> 0:15:02.680 company's gross. And in the United States, that's pretty straightforward. 0:15:02.720 --> 0:15:05.120 I mean, it's what they would uh. It's what they 0:15:05.160 --> 0:15:06.880 would get for a c D, what they would get 0:15:06.920 --> 0:15:09.400 for a download, what they would get for a stream. UH. 0:15:09.440 --> 0:15:14.480 Synchronization licenses or generally meaning the right to use this 0:15:14.680 --> 0:15:16.200 song and a film, or the right to use a 0:15:16.240 --> 0:15:19.240 song and a commercial. UH. That's that's a different split. 0:15:20.040 --> 0:15:23.400 When you get the foreign percentages. Uh, you know that 0:15:23.400 --> 0:15:26.160 that's when it's a bit more in the the gamesmanship 0:15:26.320 --> 0:15:30.280 on the on downloads and cd s, it's pretty straightforward 0:15:30.320 --> 0:15:33.200 about what the their affiliates going to get. But when 0:15:33.200 --> 0:15:36.240 you get the streaming, sometimes the companies will take a 0:15:36.360 --> 0:15:40.320 percentage in France, for example, before they send the money 0:15:40.320 --> 0:15:42.000 back to the US, and then you only get the 0:15:42.000 --> 0:15:44.560 percentage of the US. So one of the things we 0:15:44.600 --> 0:15:46.640 asked for in streaming deals now is that they have 0:15:46.720 --> 0:15:50.000 to be at source, and the words at source mean 0:15:50.160 --> 0:15:52.680 that that's where the money is generated. So if it's 0:15:52.720 --> 0:15:55.360 French money, it's it's in France. If it's German money, 0:15:55.400 --> 0:15:58.480 it's in Germany without any deductions before it gets back 0:15:58.640 --> 0:16:02.560 to the US and the company pays it to the artists. Now, 0:16:02.600 --> 0:16:05.520 in this particular case, unlike in decades past or certainly 0:16:05.520 --> 0:16:11.240 prior to nineteen seventy, where these companies own their worldwide outlets, 0:16:11.240 --> 0:16:14.640 they're not licensing to a third party. Is the reduction 0:16:15.080 --> 0:16:18.160 for foreign moneys just a negotiating ploy or do they 0:16:18.200 --> 0:16:21.720 give some kind of rationalization or they give a rationalization 0:16:21.800 --> 0:16:25.960 that the local company has marketing expenses and that they're 0:16:25.960 --> 0:16:28.560 putting actually effort and money into it and so forth. 0:16:28.600 --> 0:16:31.000 But the reality is is that if you have enough cloud, 0:16:31.080 --> 0:16:33.200 you can get your money its source. Maybe a lower 0:16:33.240 --> 0:16:36.760 royalty for them, but you can get it as source. Okay, 0:16:36.880 --> 0:16:40.720 let's pull back the lens because we've talked previously that 0:16:41.320 --> 0:16:43.200 you know, used to be a lot of your time 0:16:43.200 --> 0:16:46.960 was spent negotiating record deals, but it shifted to a 0:16:47.000 --> 0:16:50.920 great degree to live business. Can you comment on that please? Yeah, 0:16:51.720 --> 0:16:55.000 I mean in terms of our personal time, you know, 0:16:55.120 --> 0:16:57.400 we will as more and more of these deals are 0:16:57.440 --> 0:17:00.160 done with one single promoter will do it in some 0:17:00.320 --> 0:17:03.160 ount of work on that promoter deal. But we also 0:17:03.320 --> 0:17:06.920 tours are very labor intensive. Tours require contracts for things 0:17:06.960 --> 0:17:10.200 you don't normally think about, like, uh, somebody to build 0:17:10.200 --> 0:17:14.639 the stage, the trucks, the buses, the crew, the band, 0:17:15.320 --> 0:17:17.800 the dancers. I mean, there are all kinds of things 0:17:17.840 --> 0:17:22.160 that go into it, insurance issues. So tours are actually 0:17:22.520 --> 0:17:24.840 quite a bit of work. Um. But you know, I 0:17:24.880 --> 0:17:27.639 wouldn't want to say that it shifted the majority of 0:17:27.680 --> 0:17:30.080 what we do. I just say it's just a big 0:17:30.119 --> 0:17:34.320 part of it. Okay. Uh, So let's assume I make 0:17:34.320 --> 0:17:39.040 an overall deal with live nation or concerts West. You 0:17:39.080 --> 0:17:43.960 mentioned all those things. Those are the responsibility of the act. 0:17:44.000 --> 0:17:46.000 Where does the line between the responsibility the act and 0:17:46.000 --> 0:17:49.800 the promoter lay for life? I'm not sure what you 0:17:49.840 --> 0:17:55.000 mean by responsibility. Okay, you're talking about hiring people, insurance, etcetera. Okay, No, No, 0:17:55.160 --> 0:17:57.760 the act, the act does all of that that. The 0:17:57.840 --> 0:18:01.399 promoters deal is just simply we're gonna pay you X 0:18:01.440 --> 0:18:04.480 to show up and do y concerts. I mean, there's 0:18:04.480 --> 0:18:06.359 a lot more to it than that, obviously, but that's 0:18:06.640 --> 0:18:10.160 that's the essence of what the contract is. Uh. Every Then, 0:18:10.320 --> 0:18:13.280 the act is responsible for delivering the show. So they're 0:18:13.359 --> 0:18:17.639 hiring the band, they're hiring the the crew, they're hiring 0:18:17.680 --> 0:18:21.719 the buses, they're hiring the trucks. Okay, and let's just 0:18:21.880 --> 0:18:25.960 assume the venue is not owned by the promoter and 0:18:26.080 --> 0:18:28.639 there is an accident, I would assume the act gets 0:18:28.640 --> 0:18:31.480 sued in addition to the promoter. Yeah, there's an age 0:18:31.560 --> 0:18:33.480 I legal theory. If you're going to throw a party, 0:18:33.520 --> 0:18:37.399 you invite everybody, So anybody who is anywhere near what 0:18:37.560 --> 0:18:47.280 happened is going to be sued along with it. Okay, Now, 0:18:47.760 --> 0:18:49.840 you know, let's talk about a superstar act might go 0:18:49.880 --> 0:18:54.320 out with twenty trucks, uh, crew of dozens, etcetera. To 0:18:54.480 --> 0:18:57.639 what degree are you involved in the micro management? What 0:18:57.680 --> 0:19:00.720 I mean by that is someone gets five A or 0:19:00.800 --> 0:19:04.000 a a roadie gets, you know, their ankle broken. Do 0:19:04.080 --> 0:19:06.639 they call the attorney or their layers before it gets 0:19:06.680 --> 0:19:10.200 to you? Um? Both? I mean, yes, there's layers before 0:19:10.200 --> 0:19:12.440 it get to us. But anybody being fired or any 0:19:12.520 --> 0:19:15.080 kind of injury or insurance issue, we're going to be 0:19:15.119 --> 0:19:18.720 involved in it as well. Okay, And let's just talk 0:19:18.760 --> 0:19:22.520 an overall deal with one of those international promoters. Who 0:19:22.680 --> 0:19:27.400 ultimately comes up with the price and who does the negotiation? Um, 0:19:27.560 --> 0:19:30.479 Usually it's the agent that does the negotiation of the 0:19:30.480 --> 0:19:35.520 major terms, uh and the prices you know a marketplace mitting. 0:19:36.240 --> 0:19:38.240 You know, they'll look at their history, they'll project what 0:19:38.280 --> 0:19:40.720 they think they can do, they'll figure out a percentage 0:19:40.720 --> 0:19:42.919 of it, they'll want to guarantee of a certain amount 0:19:42.920 --> 0:19:47.119 of it. And it's just part of the back and forth. Okay. Now, 0:19:49.160 --> 0:19:52.760 a certain number of superstar is don't have an agent 0:19:52.840 --> 0:19:55.320 at all. Do you see what do you see the 0:19:55.359 --> 0:19:58.560 future of the agency business being? Well, I think the 0:19:58.600 --> 0:20:01.439 agencies bring value. I'm mean, I think they have a 0:20:01.560 --> 0:20:04.800 lot of knowledge that even I mean, there's a few 0:20:04.800 --> 0:20:08.679 managers that are perfectly capable of doing everything, but for 0:20:08.720 --> 0:20:11.480 the most part, the agents have a depth of knowledge 0:20:11.520 --> 0:20:15.480 and relationships and knowledge of other deals, knowledge of routing, 0:20:15.560 --> 0:20:18.760 knowledge of UH you know, what the marketplace is like 0:20:18.840 --> 0:20:22.080 in different places that I think makes invaluable and particularly 0:20:22.080 --> 0:20:24.840 for managers without that expertise, I think they're an important 0:20:24.880 --> 0:20:27.520 part of the team. Okay, let's talk because you're on 0:20:27.560 --> 0:20:31.639 the artist team. Uh. In the old days, everybody paid 0:20:31.680 --> 0:20:35.040 ten percent, but a very successful artist usually does not 0:20:35.240 --> 0:20:37.960 pay his agent ten percent. What is your experience there 0:20:37.960 --> 0:20:42.040 and what's the negotiation like. Well, if you're bringing in, 0:20:42.200 --> 0:20:45.000 you know, a tour that's you know, a hundred million 0:20:45.040 --> 0:20:47.760 dollars there, it's unlikely they're going to pay ten percent 0:20:47.840 --> 0:20:52.679 for it. But it's negotiated very specifically in each instance. Uh, 0:20:52.720 --> 0:20:54.720 you know, it can be a very low percentage. It 0:20:54.800 --> 0:20:57.800 can even in a few cases not so much anymore, 0:20:57.880 --> 0:21:01.200 be a flat fee. Oh kay. In the old day, 0:21:01.400 --> 0:21:07.199 certainly prior to there were six major UH international companies 0:21:07.280 --> 0:21:12.040 in some very large independence distributed by them. So in 0:21:12.160 --> 0:21:15.080 terms of getting record deals, how is the landscape change 0:21:15.119 --> 0:21:18.280 as a results of consolidation in the Internet. In terms 0:21:18.320 --> 0:21:22.640 of record deals, well, there are less buyers for obvious reasons. 0:21:22.680 --> 0:21:24.639 I mean there are now you know, a number of 0:21:24.680 --> 0:21:27.879 independents that are also in the marketplace, but in terms 0:21:27.880 --> 0:21:31.480 of majors, there are only three. Uh. And they don't 0:21:32.000 --> 0:21:35.080 let their labels compete against each other. So if two 0:21:35.240 --> 0:21:39.080 labels owned by the same major are both wanting the artists, 0:21:39.119 --> 0:21:41.960 they will negotiate jointly, or the artists will nick a 0:21:42.040 --> 0:21:45.320 Laine before they do that because they won't outbid each other. Um. 0:21:45.359 --> 0:21:47.879 But you know, as long as you get two horses 0:21:47.920 --> 0:21:51.640 in the race, you can still have a spirited bidding. Warm. Now, 0:21:51.680 --> 0:21:55.800 in the old days, attorneys were conduits for talent. To 0:21:55.840 --> 0:22:00.600 what degree is that still the game? Um? I think 0:22:00.640 --> 0:22:03.240 it's just still the game to some degree. I mean, 0:22:04.000 --> 0:22:07.000 you know, the attorneys have more knowledge than others because 0:22:07.040 --> 0:22:10.200 we can have more clients. Uh. You know, agents may 0:22:10.200 --> 0:22:12.679 have more clients, but they're in a one lane. In 0:22:12.800 --> 0:22:16.840 terms of overall understanding of the industry. Managers can't have 0:22:16.960 --> 0:22:19.679 as many clients. Some of the big companies obviously do, 0:22:19.800 --> 0:22:23.120 but I'm saying individual managers can't and lawyers are much 0:22:23.160 --> 0:22:25.840 less of a time commitment, so we have more clients 0:22:25.840 --> 0:22:28.040 and we see a lot of deals. So we have 0:22:28.160 --> 0:22:30.639 quite a bit of quite a bit of knowledge, and 0:22:30.680 --> 0:22:33.680 we have relationships with with people as well. So when 0:22:33.720 --> 0:22:36.280 someone you know needs to be connected or needs something done, 0:22:36.359 --> 0:22:39.760 we're in a position to do it. Okay, to what 0:22:39.880 --> 0:22:43.119 did we? Are people knocking on your door wanting to 0:22:43.280 --> 0:22:47.800 hire you to make a record deal? Um? If you 0:22:47.880 --> 0:22:51.360