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Handshakes vs the written agreement
Clyde McKenzie
Friday, September 26, 2003

TOK... had no written agreement governing their relationship

LAST week we were informed in an Observer article that Richard "Shams" Brownie, a scion of a great Jamaican musical family, had parted company with TOK, the popular dancehall aggregation.

Browne served as producer and manager for the group which some believe are poised for big things. What seems evident is that the group does not see Browne in their vision of moving to the next level, at least not as their manager. According to the article, Browne and TOK had no written agreement governing their relationship. This type of arrangement most attorneys and not a few well-informed members of the business community will agree is a formula for chaos. Yet very few, even the most legalistic among us could truthfully admit that written agreements govern all our business arrangements. Many huge deals are still forged with no more binding an undertaking than a firm handshake.

Now that TOK has bolted, Browne will perhaps curse himself for not having committed their relationship to pen and paper. Yet let me be the first to point out that contracts are usually not worth the paper on which they are written if the parties adhere to the letter and not to the spirit of the agreements. We have seen a number of instances in which ironclad agreements between artistes and their record companies and managers did not achieve their desired performance provisions because the parties just were not getting along. George Michael, Prince, Courtney Love and Mariah Carey are just a few of the acts who have not allowed contractual considerations to influence their reactions to deals they later considered to be patently unfair. Contracts do not make the relationship fair or perfect; they simply serve as a reference point as to what the signatories at some point considered to be a guide for their interaction.

It is very simple: if both parties are not getting along and there is no trust between them, then there is no point sticking to the letter of the agreement. GET OUT. That said, there are certain points which would seem essential to any contract. There should be obvious penalties built into an agreement which will limit the human tendency toward making unilateral and arbitrary decisions.

Most managers spend enormous amounts of their time, energy, money, influence and sometimes prestige to develop their artistes. The artiste is conveniently oblivious when the manager is spending his money on him or sees it as a natural outgrowth of their friendship, and the price for associating with his phenomenal talent. Problems usually arise when the artistes start earning money and the manager tries to recover what he has already invested.

Many times artistes believe that a 20 per cent commission is like one of the laws of gravity; a universal given. Yet nothing could be further from the truth. If I were asked to manage Michael Jackson I would not be able to have the same commission structure as I would if I were handling the affairs of an unknown artiste whom I brought to prominence after five years of taking care of him and his 12 baby mothers. Because Jackson is already a major star, I might have to settle for a commission of 10 per cent or less. Yet that might be a huge sum indeed. On the other hand, in the case of the artiste I have brought to prominence, a 50 per cent commission at least over a specific time frame might not be unreasonable and might be much. This in absolute terms would in all likelihood be less than the amount brought in from the Jackson 10 per cent commission. In the second instance, I am recovering my investment while being paid for my current services. Most artistes find this tough to swallow and would prefer to abide by the sentiment: "Let bygones be bygones."

On the other hand, it must be borne in mind that in many instances management might only be useful up to a certain point of an artiste's development. Yet the phenomenon of outliving ones usefulness is not confined to the world of entertainment management. Some of the people who lead their country through liberation struggles are totally useless in a state of independence.

Artiste/management agreements should therefore have short terms, usually two years, in order to give both sides a reasonable time to make proper assessments on the progress of the relationship.

These agreements should contain provisions which will allow the management to share in the earnings of the artiste which might fall due after the term expires but which were negotiated during that period. Suppose I secure a multi-million dollar deal for my artiste close to the end of our term and the agreement is not renewed, should I walk away empty-handed while he rakes in a huge income as a result of my efforts? Such provisions are sadly lacking between Jamaican artistes and their managers in the rare instances where there are contracts.

Dependent on which side you are on, you might see TOK as heartless ingrates who have stomped on a solid friendship to get ahead or we might view then as pragmatic businessmen, who are all about what is best for the group. The fact is that neither position might represent the whole truth. Whatever the assessment, it is reasonable to assume that even in the face of what might have been the inevitable break-up, both sides would have been better served with a properly structured written agreement.


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