
bknot1
Hustle Magic!! We Got It.
good info for you all
Negotiation... The Discussion Before the Contract Stage
The music business is deal driven. Every dollar earned is the product of a negotiated contract. Good negotiators achieve better deals. Negotiation skills are essential to be highly successful in the music business...
Most of the lucrative deals in the music industry are not simple contract offers. They are the result of long-term relationships... it is important to recognize the difference. This is the reason that most artists are continually seeking out established representation. Many experienced representatives are not interested in working with many new acts because development needs and maintenance requirements are often too time consuming. Every new artist needs to continually work hard at being good enough to attract quality interest. The reputation of a good representative will not and should not be compromised by offering a substandard act to his/her long established list of clients. Get used to rejection... and get inspired to work harder.
Deal making isn't just about booking performance dates. A knowledgeable dealmaker knows that the on-going relationship between the parties is what brings the most rewarding results. Therefore, the deal process often requires the exploration of the personal needs and expectations of the participants and should always form a bridge of opportunity for a long-term association. Don't be discouraged by the lack of interest from the big guys... you are likely not good enough yet. Make an honest effort to get better and try again.
Essentially, deal making is the process for building a business relationship. It is the foundation for a mutually enduring association between an artist and his or her commercial entities. There is a lot to learn about the art of deal making. This article will focus on the most important aspects of the process. It is my approach - and one that has been proven to work for me. It may not suit everyone.
Whenever approaching a new deal, the dealmaker must ask the following questions...
Who is The Buyer and who dictates the terms? In many cases there is no room to negotiate... an established event, venue or production may have a "house contract" with set budget, rules and regulations that limit or clearly stipulate the artists' and buyer's responsibilities. You must basically either accept or reject these gigs. There may be very little room for any adjustments. A good negotiator will soon know if there is any wiggle room or not and, in the long run, will usually do much better for the artist than they can do for themselves. This is the main reason why most successful artists have professional representation to deal with their business requirements.
Has a Deal Memo been issued? It is advisable to begin every new deal opportunity with an introductory letter of agreement outlining the most important deal points with the request for an approval response from the buyer. This allows the dealmaker to revisit the artist's position in the event there are any objectionable points. For example, if the artist has just experienced a "non-payment" situation and requests an advance payment on the contract, and the buyer has recently lost a "deposit" by way of a "no show" performer... the deal would likely collapse. Of course, the average gig details can be discussed totally on the telephone. But, it is so much more professional to follow up with a written proposal. All contract details can usually be worked through successfully if the process starts with a non-threatening "deal memo" that is issued as a "first draft" which suggests that the deal points are not written in stone. Many deals have been lost without an explanation when the contract appears too demanding or one-sided. The buyer may suggest that he/she has changed their mind when the "deal-breaker" was actually the tone of the contract. It is always wise to test the water before issuing the final contract.
Have all the Important Points been covered? Aside from the date, place, time and length of performances, etc., many other items should be clarified. In an on-going production, some artists insist on complete control of the performance and others just show up and do what they're told. If creative control is an issue, the negotiator must find a way to provide the performance assurances needed for investors to accommodate this requirement. Unless the artist has producer skills or credits, this item could be a deal-breaker.
Artists' Support might be a factor in a deal... a well-known producer or choreographer might enhance the artist's skill level and be a deal-maker. An artist with children may have to establish the framework for the provision of some child-minding or supervision. Unless the buyer recognizes conflicting obligations and/or special needs of the artist, and can find mutual ground for agreement, reaching a deal is very unlikely.
Who is providing What? Unsatisfactory travel arrangements quite often are a deal-breaker for the artist. Is there a travel allowance? Is the airline ticket provided only good on stipulated dates to and from wherever? Do we travel in a mini-van or a spacious coach? Is it a five star hotel or a three star motel? Are meals included or a per diem paid? How many room nights are provided and can I come in early? What kind of sound system is there? Can my technician run the sound? What time is rehearsal and sound-check? Is there a toilet and mirror in the dressing room? All your questions must be discussed with the buyer in advance of issuing the contract. There is no room for assumptions or expectations... you need to put it in writing!
In some cases you know from a previous experience that an agent, producer or buyer can be trusted to deliver with only the vaguest of terms in the contract. With others, you know that if it isn't down in black and white, it isn't going to be delivered. But, why take the chance... always write it down!
Discipline is Essential in Negotiation. Too often significant deal points have already been conceded by the artist before the dealmaker gets a chance to negotiate them. If you hire an experienced representative's services, don't talk business with a prospective buyer... only talk music or performance.
Discussing aspects of the deal with the other side before the dealmaker does will likely cost you money in the end. The negotiator will almost certainly have to work at regaining some of the points you have given away. Here is a great analogy that says it all... DON'T HIRE A DOG & THEN BARK YOURSELF!
Sometimes an artist will think the negotiator is threatening the deal. The buyer may even make that implication to the artist. An experienced performer will simply make it politely clear that such matters are in the hands of the negotiator and promptly steer the conversation back to artistic issues. Any such discussion should be reported to the negotiator so that he or she knows exactly what has been said. Successful negotiation requires team loyalty. Remember who is on your side. Don't get rattled, the buyer is just trying to get the best possible deal.
Never make the buyer part of your "in house" discussions. Any concerns are matters for your team to resolve. Don't flag your problems to the other side. Think of it in terms of a sports team... if you have a problem with one of your team members, you don't ask the other team's coach what you should do. You thrash it out behind closed doors. The experienced performer will listen to criticism and modify their technique or behavior as necessary.
Good Negotiation Technique is a Major Asset. Most negotiators will tell you that the best deals are made by first listening to the other side completely before you discuss any of your deal points. This allows the negotiator to modify any intended requests that may have been obviously dangerous. Here are a few pointers in negotiation technique...
1. Always Start With a Deal Memo - This is especially necessary when approaching a large deal as the points will likely be much more complex. It is easier to understand a deal if everything is set out in summary form without the distraction of the legal terminology which will later bind those points together. This provides a much better chance for a successful result.
2. Focus On the Important Points - When preparing the full-length contract, be sure and continue to focus on the deal points... don't try to re-draft it. It's easy to get overly thorough now that you have an accepted deal. Don't go there... it is extremely dangerous. No deal is perfect. Get some advice if you're nervous... no need to fall into a trap for the unwary.
3. Have a Good Reason for Every Request - The essence of every good deal is reason and common sense. If the other side understands that your requests are reasonable, it is likely to be accepted. Outright demands are rarely effective. A buyer may be forced into acceptance due to a number of circumstances... if this is the case, the relationship is probably over. If you know a request is unreasonable, why go there? This is usually more about ego than negotiating a fair deal.
4. Speak With One Voice - Remember previous warnings... always let the negotiator take care of the business. This is not just a matter of protocol, it is essential to maintaining the relationship. If it becomes necessary to deal hard on any issue, let the negotiator be the bad guy.
5. Ask For Changes in a Block - Try not to make the negotiation a torture test. Don't ask for changes that haven't been discussed. Buyers become rightfully irritated when you keep asking for stuff that they believe has already been covered. The only points that should be revisited are issues resulting from the negotiation of later deal points.
6. Never Promise What You Can't Deliver - This is an absolute rule of thumb... if you are not sure, be honest about it. Building respect is part of the process. And, when you give your word... be prepared to bend over backwards to deliver on your promise. Unexpected changes that "take away" from the other side should be replaced with something in return.
7. Don't Lose Your Temper - It's only business... nothing personal. Negotiation is an exercise in control. If you lose your temper, the other side wins... it's that simple.
8. Leave Your Ego at the Door - Like entertainers, good negotiators need to have a strong ego... but they should never bring it to the negotiation table. Have a cold shower in the morning and wash it down the drain before getting on the phone... or tuck it safely in your pocket before going into a meeting. Testosterone and ego will always harm the negotiation process... they are both destructive and will usually destroy any possibility of reaching an agreement. Don't go there!
9. Take It or Leave It? - At the end of the day, there are limits to every deal. Should you do the deal or should you walk? Sometimes a lawyer will advise against a deal and the artist will go ahead anyway... the lawyer will always facilitate their client's wishes. But, when a lawyer advises against a deal, there is likely some unhealthy reason involved and there's a good chance for failure. If a contract is not fair to both sides, it will never work. And, if either party feels ripped off, or grows disillusioned with the deal - it's over. Only the lawyers will win.
10. Dance With the One What Brung You - This is the oldest rule in the book, stemming from the old fashioned country dances on the farm... where the girls would always save the last dance for, and go home with, the boy that brought them. It's a common courtesy that every performer should adopt when re-booking any engagement. Always pay the agent or representative that booked you at the first gig for every replay thereafter. It is a good habit that will bring huge dividends in the future. Remember... real success is about long-term relationships. Try not to burn any bridges... it may be a huge shortcut down the road.
In conclusion... a good contract has to embody the needs and expectations of both parties. The contract is a formal expression of those two elements. Sometimes a contract has to try and guess the future and must be re-evaluated if either party experiences any unforeseen hardships. For example, if a project doesn't come close to the expected sales, and is facing a shut down, perhaps a renegotiated fee will save the day. It is impossible to define every eventuality. The parties have to develop mechanisms for achieving a fair adjustment later when some results are in and more information is known.
Long-term deals, such as personal management and artist development, are especially vulnerable to disastrous conclusions. Therefore, it is invaluable to build in a "Sunset Clause" for uncertain situations... a clause whereby both parties agree in advance to a separation procedure that kicks in when either party wishes to terminate for whatever reason. This clause must set out fair perimeters for termination, and clearly state what happens with payments and/or penalties, etc. for both parties when termination is implemented.
One final deal making tip... Always remember "An ounce of prevention is worth a pound of cure."