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Part
Four
By Harlington L. Hanna
Jr.
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Management and Agency Rights
An important object in the acquisition of
entertainment properties and income revolves around the
acquisition of management and other agency rights which
the wise entrepreneur may acquire from the holders of
talent, or the talent themselves. Perhaps the most
important aspect for gaining success for the talented
artist, author or producer is access to competent
management or agents which may be essential for the
success of most artists. Competent management is not
easy, nor is it ubiquitous in the marketplace. However it
is something almost every artist, including those who
already are business wise and savvy, can benefit
from.
The right to manage and or provide other agency type
functions is a potentially valuable right and certainly
an important responsibility which the entertainment
entrepreneur can acquire. Managers sit at the table where
decisions are made and exercise a significant amount of
control and direction to entertainment talent. Mangers
and agents should and do see the deals and opportunities
available to the talent before any one else. If they are
good and perform their function well they deserve every
penny they make and sometimes more. A good manager or
agent becomes the brain of the business and as such can
be an indispensable partner in the process.
Good managers may make up to twenty five percent or
more of the applicable income of the artist. While the
higher percentages may seem high, a good manager is
usually worth his weight in gold.
Even in acquisitions where the actual management or
agency rights are not the primary property being
acquired, it is extremely important to determine whether
the artists involved in acquired entertainment property
have adequate management. This is may be the critical
factor in the success of any project dependent on artist
performances. The acquirer of the entertainment property
may desire to require or provide for such management if
it is not present. If the acquirer attempts to undertake
management himself he must be aware of some of the
potential conflicts of interest issues which may arise in
such a situation. Additional care must be taken in such
cases to provide for adequate disclosure provisions in
the contracts and in the actual practices performed under
the contracts.
Artist Attitude & Disposition
An important word about properties where artists
performances are being acquired or where artists
themselves are the prime subject of the acquisition.
Obviously the attitude, mental disposition, character,
physical and habitual attributes of the artist(s) must be
highly considered. Provisions providing indemnity for
losses incurred due artist behavior or lack of
performance must be negotiated into the contract. If
there is any doubt as to the cooperative disposition of
the artist the acquirer should seriously consider moving
on to the next opportunity. Uncooperative artists can be
the worse situation an entrepreneur can encounter despite
the quality of the talent. It must be remember that
legally the artist can not be made to personally perform,
and so contractual measures such as indemnity clauses,
anti competitive clauses, attachment of income,
constructive trust arrangements, and rights to the
artists income emanating from the investment forwarded,
must be provided for in the contract.
Promotion & Marketing
All of the money in entertainment is tied to the
quality and amount of promotion and marketing. In other
words it's mostly tied to hype. Certainly quality
productions and good material is always helpful, but more
important is publicity, or creating attention and
excitement in the marketplace surrounding the production.
As the world gets more sophisticated, market boundaries
become more blurred and competition becomes more
prevalent, promotion and marketing becomes more
important. Today producers who expect to make significant
money from their production efforts must be prepared to
put at least as much or more effort and resources into
promoting and marketing the product. In effect the
promoter and marketing process will usually control the
outcome and in many cases even the production process.
The product produced must be marketable and so before it
is produced the promotional and marketing potential and
value must be considered. Unfortunately most productions
are undertaken in just the opposite manner. Producers
tend to produce what they like or want and then try to
find a market for it. A wise producer looking to make
money should do just the opposite.
The I.P. acquirer is usually also the ultimate I.P.
exploiter. He is the party who is taking the risk of
ensuring that the property will be marketed and bring
profits. With this in mind he must enter the acquisition
negotiations process with some idea of how he is going to
make money from this acquisition. This plan should
actually be in place before he acquires the I.P. he must
understand that the resources need to profitably exploit
his acquisition may require two or three times the
acquisition amount for effective promotional and
marketing activities after the acquisition. His
acquisition efforts must therefore allow for this and
particularly where there may be multiple parties involved
account for such factors.
Part Three
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Five 