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.
In California (and other states, including New York and Tennessee), talent managers cannot procure employment for artists — in other words, they can’t negotiate with concert promoters or booking agents or otherwise find people to pay the artist for his or her services. That’s what talent agents do, and you need a license to do it. Yet, talent managers get paid a lot of money — Azoff is claiming $2 million and Fusari is claiming a whopping $30 million from Lady Gaga. But if these managers aren’t out there finding work for the artist, you’re probably wondering — as is Lady Gaga — what did they do to deserve millions of dollars?
Well that’s a good question. Talent managers provide a variety of vaguely defined services such as counseling and advising the artist, taking care of business and personal arrangements, and charting the course of an artist’s career. Think Kevin Connolly’s character “E” on Entourage, but probably taller. For these amorphous services, talent managers usually take 15% of the artist’s income (sometimes more). Wouldn’t that be the life — nobody really knows what you do, and you make a bunch of money!
When all is going well, the artist usually doesn’t question the relationship. Most managers are on the phone or hanging out with their clients on an almost daily basis. They’re the artists’ BFFs (or, if you believe Fusari, BFWBFs — that’s “best friends with benefits forever”). As long as business is good, the artist is happy to have 15% go to a friend or lover. But, the artist is also paying 10% to an agent and maybe another 5–10% to a lawyer. The artist knows what those people do — the agent gets the work and the lawyer makes sure the contract is fair and reasonable. So, if things get a little tight and the artist gets tired of giving away 30–35% of his or her income, the axe is most likely to fall on the manager.
The close relationship between artists and managers can also result in interpersonal conflicts that cause the relationship to break down (sure, the “F” in “BFF” stands for “forever,” but that’s “forever” in the entertainment industry). So it’s no accident that when Fusari sued Lady Gaga, he included all kinds of allegations about their prior romantic relationship (a “Bad Romance,” perhaps?).” Or maybe the artist just loses faith in the manager’s business judgment and decides being a friend isn’t enough qualifications to do the job.
Whatever the reason, once an artist decides to cut his or her manager loose, the artist usually has the upper hand. Management agreements are often done orally (although apparently not in Lady Gaga’s case). Have you ever heard the old saying “an oral agreement is not worth the paper it’s written on?” Some would say it was invented for artist-management contracts.
In fact, in the case of management contracts, the oral agreement might actually cost the manager money. If the manager “procured employment for the artist,” meaning the manager landed one single gig for the artist, the manager can be forced to give back all the money that was paid years ago. Sometimes this can lead to the manager owing the artist millions of dollars in addition to paying attorneys to fight the battle. Most managers walk a very fine line regarding “procuring employment” for the artist, so the artist has the incentive and leverage to try and get out of the management deal.
This is precisely what’s going on in Lady Gaga’s case. When Fusari sued her, she countersued to get back millions paid to Fusari claiming Fusari illegally acted as a talent agent. Will Axl follow suit and try to get back money paid to Front Line? Only time will tell, but it definitely wouldn’t be a surprise. And given the state of the law governing relationships between talent and managers, we can almost certainly look forward to more of these lawsuits in the future.