Posts In "Agents and Managers"

Agents and Managers




A Law Law Land Correction (and a Litigant Speaks!)

An interesting footnote to last week’s post, revisiting our “5 Cases to Watch” for 2012.

Last week, I wrote that while talent manager Rick Siegel’s legal war with his former client — which had since morphed into a crusade against California’s Talent Agencies Act writ large — was over, the fight had been taken up by Siegel’s colleagues at the National Conference of Personal Managers, which, in November 2012, brought a direct constitutional challenge against the Talent Agencies Act in federal court.  As part of my preview of the case, I noted that the case “may still be a long shot — anytime someone tries to claim that a law violates the Thirteenth Amendment’s prohibition on slavery, you have to raise your eyebrows a little.”  But this week, I received a reader correction from Mr. Siegel himself, who writes:

Ken,

The 13th Amendment claim isn’t about slavery.

The 13th Amendment of the United States Constitution states in part:  “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”

So to be constitutionally compliant, the benefit of one’s labor can only be voided should there exist: (1) a statute stating that such labor was criminal; and (2) a finding been forfeited must have been found duly convicted of that crime.  Every other California occupational licensing scheme where one loses the right to contract has statutory notice that the unlicensed engagement of activity is a criminal offense and makes that engagement either misdemeanor or felony, the TAA expressly states that per § 1700.44(b) that no TAA violation can be considered criminal.  As the action can’t be seen as criminal, the penalty violates the 13th Amendment.

The original post has been revised to refer to “involuntary servitude” instead of slavery.  Lawyers for the State of California, the Association of Talent Agencies, and celebrities who just like being able to not pay their estranged personal managers may, of course, disagree with Mr. Siegel’s interpretation of the Thirteenth Amendment, but let it never be said that Law Law Land doesn’t strive to be fair and precise in its snark.

As for me, I’m just psyched to have gotten (politely) called out by a celebrity of recent history in California law.  Can’t wait for Kim Kardashian to email the blog next!

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Agents vs. Talent: Money For Nothing?

A little over a year ago, I wrote about a rash of lawsuits brought by managers against former talent clients. If 2010 was, as I suggested, the year of managers suing their ex-clients for unpaid commissions, then 2011 appears to be year of agents suing their ex-clients for the exact same thing. This time, though, the agents are in the driver’s seat.

Last week, one of the biggest agencies in the world, United Talent Agency, sued Adam Herz, a writer and producer on American Pie 3, for at least $700,000 in unpaid commissions. A few days later, a story broke about Paula Abdul firing UTA and refusing to pay UTA commissions on her income from X-Factor. UTA seems ready to fire off another lawsuit against Paula. So, what gives? Why is UTA all of a sudden getting stiffed (or, to quote the terrible pun making its way around the Internet, “Stifler’d”)? Continue reading the full story . . . »


A Lesson in What Not to Do When Selling Your Company to Yourself

Ever since Michelle Obama wore J.Crew on The Tonight Show with Jay Leno, the company’s sales have skyrocketed. Under the leadership of my personal style hero Jenna Lyons (who is currently at the center of a ridiculous controversy over painting her son’s toenails…side note: I heart Jon Stewart), J.Crew sales went up 14%, even during the economic downturn. I can neither confirm nor deny reports that my personal purchases from J.Crew accounted for 13.9% of that increase.

So what did Micky Drexler, CEO of J.Crew, decide to do with these booming sales? Sell, of course! Only, some shareholders accused him of selling at below market value (a mere $3 billion). AND he sold it to J.Crew’s own former parent company. AND he waited 7 weeks to tell the Board of Directors about the deal. AND he said he would not work for anyone besides the buyers with whom he negotiated the deal (TPG Capital and Leonard Green & Partners). Whoops.

Not surprisingly, lawsuits ensued.

Shortly after the announcement of the J.Crew sale to TPG Capital and Leonard Green & Partners, shareholders filed a lawsuit against J.Crew, its Board of Directors, and TPG for breaching their fiduciary duties. The parties eventually settled for $10 million, netting each shareholder 15 cents per share, and each lawyer about $500 per hour (who exactly “won” this lawsuit again?). But the fight is far from over, as the plaintiffs’ lawyers now accuse J.Crew of violating the settlement agreement. And, even though corporate governance advisory firm Institutional Shareholder Services advised J.Crew’s shareholders to vote against the sale, the shareholders nevertheless approved the $3 billion buyout last month.

Although Mickey Drexler has publicly said he would conduct the sale the exact same way (I’m sure), the whole situation is basically a lesson on what not to do in a management-led buyout. Continue reading the full story . . . »


Managers vs. Talent, or, When BFFs Turn Nasty

In late March, Irving Azoff’s company, Front Line Management, sued Guns ‘n Roses front man Axl Rose for nearly $2 million of unpaid fees. Amazingly, this is the third major talent v. manager lawsuit in just the first three months of 2010. First was Sly Stone suing his former manager Jerry Goldstein for allegedly co-opting $50 million in royalties from Sly’s music, likeness and trademark. Then March brought a lawsuit between Lady Gaga and her ex-boyfriend and manager Rob Fusari, and the Axl Rose matter. So, why the sudden rash of manager disputes? Maybe it’s some mysterious plot by entertainment industry executives to reap strife between talent and their representatives. Or maybe the managers’ moons are in Venus and the talent’s moons are in Cancer (whatever that means). But I think there’s a far simpler explanation: given the unique nature of the relationships between talent and their managers, when the talent wants out, the managers are easy targets. Continue reading the full story . . . »