Personal managers and talent agents, as I've indicated,
have different roles.
The job of the personal manager of course is to advance the artist's
career from one level to the next.
Whereas the job of the talent agent is to procure employment on
behalf of the talent.
Sometimes this can create some, as Robin Thicke would say, blurred lines.
And this is the reason why the state of California wanted to be sure it was
one of the first states to enact legislation requiring talent agents to
register with the state.
In 1967, they enacted the California Talent Agency Act, basically saying
anyone that procured employment on behalf of an artist, or any other kind
of talent, had to be registered with the state of California.
And then in 1978--
I think because of obvious instances of personal managers not being
registered as talent agents, but procuring employment--
California decided to add personal managers also as a category under the
Talent Agency Act.
In other words, if personal managers procured employment on behalf of their
talent, they also had to be registered under the Talent Agency Act in
California.
Now if you're registered as a talent agent in the state of California, the
contracts with your artist, or the talent that you represent, can only be
two years long.
And that's because any talent agent registered with the state of
California must comply with union contracts.
Now the two primary unions for musicians are, the American Federation
of Musicians, and the American Federation of
Television and Radio Artists.
Of course, the AFM American Federation of Musicians, represents
instrumentalists and musicians primarily.
Whereas AFTRA, the American Federation of Television and Radio Artists,
represents vocalists.
And their form contracts say that talent agents can only represent those
types of talent for two years.
So if you're a registered talent agent in the state of California, your
contract can only last two years.
Also, if you're a talent agent, your maximum commission can only be 10%.
However, if you're a personal manager, and registered with the state of
California as a talent agent, that commission can be 15%.
Because you're in a position of offering both the services of
procuring employment and advancing the artist's career.
Now that creates quite a problem with most personal managers
in the music business.
Because, as we just talked about earlier, most personal managers want a
commission of at least 20%.
And a personal manager also wants a contract that can last up to,
possibly, a minimum of five years.
A personal manager doesn't want to get involved with the talent, working with
the talent, identifying producers and studios and trying to get a recording
agreement, and a publishing agreement--
which might take two years to actually happen-- only to have the act at that
point sign with another personal manager.
And they lose the investment that they've made over
those past two years.
So the result is, most personal managers do not register as talent
agents in the state of California.
Most personal managers don't register as talent agents in the state.
And I mean personal managers, not that just live in the state of California,
but also managers that live in other states.
Even in other countries.
Because if you have a talent that becomes successful in entertainment,
sooner or later, they're going to go to the entertainment
capital of Los Angeles.
They're going to perform on TV shows, they're going to perform,
possibly, in movies.
They're going to have other activities instead.
They might record in the state of California.
Many artists, once they become successful, rent condos or even buy
houses in state of California.
And once that happens, once they have significant context with the state of
California, then they fall under the jurisdiction of California law.
So even if I'm a manager, say, in my home state of Ohio.
And I'm originally from Cleveland, Ohio.
About an hour away from Cleveland as a city called Akron, Ohio.
And I'm just showing you how real this could be.
There was an act, a drummer and a guitar player and singer that put
together a great band that became very successful from Akron, The Black Keys.
Suppose I was their manager early in their career.
And I was trying to book them across the country.
I decided that I wasn't going to register as a talent agent in the
state of California, or any place else for that matter.
I'm strictly the manager, trying to advance their career.
And as a part of that, I decided that I was going to try to book some dates
in the state of California.
And did, in fact.
Before they became famous.
Well once they become famous, at that point, if there's ever a problem
between the artist and the manager, the artist might use the fact that I
booked dates for them in the state of California against me.
Because if I am not a registered talent agent in the state of
California, that artist could file a complaint against me with the
California Labor Commissioner, that oversees enforcement of the California
Talent Agency Act.
And in that complaint, they can allege that I was an unregistered talent
agent, but I booked engagements for them in the state of California, in
violation of that Act.
There's very serious ramifications from the filing of a complaint with
the California Labor Commissioner.
Because the California Labor Commissioner can order
a hearing on that.
And if they determine that I, in fact, procured employment in the state of
California and I was an unregistered talent agent, the Labor Commissioner
can make two findings.
One, order that the contract between me and the talent is terminated.
And two, order me to pay all of the back commissions that I might have
earned up to that point to the talent, to the artist.
A lot of people aren't aware of that Act.
And it's very important.
When I first got involved, my very first case, when I first started
practicing law, was with the O'Jays.
And at that time, the O'Jays were huge stars.
And they had fired their manager a couple of years before, they had
stopped paying him commission.
And at some point, the manager felt that the agreement was still in force.
So he sued the O'Jays for $100,000.
And that was a lot of money back then.
And of course I'm a young law student, and my childhood idols, the O'Jays,
gave me this case.
And I was thrilled, but scared, of course.
And all I could do was apply what I learned in law school, and that is to
go of the law library and research the case.
And that's exactly what I did.
Once again, this is in 1980.
The California Talent Agency Act had only added personal managers to be
considered as talent agents in 1978.
And as I researched, I found that law.
And it said that, if a personal manager does not register as a talent
agent, and they procure employment in the state of California, they're
violating the California Talent Agency Act.
So I called a California Attorney and made him aware of the circumstances.
At first, of course, I had to speak with my clients, the O'Jays.
And I sat down with them one day, one of the members, and I said, did this
manager ever get any gigs for you, over the past few years?
And he said, yeah, there was a time, about two or three years ago, that he
came to us and he said, you know I've got this tour in California for you.
I've got dates in Stockton and Sacramento.
You'll do San Diego, and of course you'll do LA and Oakland.
And this is the problem with personal managers.
They always like to take credit for getting work for the artist.
So they are there more than happy to say, I got this for you.
Little did he know that that would come to haunt him.
Because once I got that information, and shared it with the California
attorney, we strategized that we would prepare a complaint with the Labor
Commissioner against the manager.
Alleging that he violated the Talent Agency Act by procuring employment
without being a registered talent agent.
And we decided we'd send a copy of the complaint to the manager, just let him
know, look, we're going to file this complaint against you.
We found that you violated this Act.
As soon as we sent the complaint to him, without even filing it with the
Labor Commissioner, the manager dropped the law suit.
And of course I loved it.
A new lawyer, and I came up with something for the O'Jays, something
that really helped the O'Jays.
And they were able to say, well, this young lawyer, maybe he can do a pretty
decent job.
So that's how I first became aware of this Talent Agency Act.
And surprisingly, folks, that was many years ago.
To this day, many personal managers are unaware of that Act.
And many personal managers have been caught in the web of procuring
employment on behalf of their clients in the state of California.
And violating that act, because they weren't registered talent agents.
I'll give one other example.
In the early '90s, Arsenio Hall--
who is also from my hometown of Cleveland, Ohio-- had a talk show, an
evening talk show.
That became very successful overnight.
And after the first two years, his manager went in to the network and
renegotiated an extension of his contract.
And renegotiated, and then came back to Arsenio Hall and said, Arsenio,
look, I renegotiated this agreement.
And this is what you're going to get--
And Ardenio didn't ask him to do that.
And he said, well wait a minute.
I didn't ask you to do that.
I might have, you know, I wanted to be included in that.
In other words, he was upset with his manager for doing that.
And he filed a complaint with the Labor Commissioner, basically alleging
that his manager-- who was not a registered talent agent-- had procured
this extension of his contract without his permission.
They went through a hearing, and the Labor Commissioner did find that his
manager was an unregistered talent agent, and had procured employment in
violation of that Act.
Terminated the contract, and ordered the manager to pay $2.5--
I think it was $2.5 million in back commission to Arsenio Hall.
Now you would think, with that happening in the early '90s, managers
would still be aware of that.
Well there's been case after case since then, where managers have gone
in and procured employment on behalf of their talents.
And they weren't registered as talent agents.
And so, the lesson here is, if you are a personal manager, don't procure
employment in the state of California.
Make sure that your artist has a talent agent to
perform those services.
Now you are certainly going to be in a position, as Shelley Berger was, to
screen the types of engagements that the talent agent procures.
But your job is to determine which of those engagements are the best ones
for them to take.
But you can't be involved in the solicitation and the
negotiation of that.
Now that law has had some changes over the years.
I think currently it is allowable for managers at least to reach out to
record companies and publishing companies, and talk about doing a
potential deal.
But for the most part, that has to be incidental to what
they're doing otherwise.
In other words, there can't be a significant amount of procuring
employment in the state of California.
Also, they have a similar law in the state of New York.
But that law is a little more lax in enforcement.
It does allow a manager to procurement employment, just so long as those
services are incidental to be other duties that the personal manager is
performing.