FREEMAN GÜNTER: What would you recommend to singers about to sign a contract? Should they avail themselves of legal advice?
ROBERT PERLSTEIN: Yes. Whether they are new singers or singers who’ve been in the business a long time, it always helps to have another set of eyes to look at a document that’s of such importance. It might as well be a lawyer, and one who knows about recording contracts.
FG: How can singers be expected both to sing and to know these things?
RP: Actually some do. And some are quite good at the business aspect, some are quite bright about it, some get pretty heavily involved, and others take a very relaxed attitude about it. Any approach is fine, as long as artists have somebody who’s helping them through it. A singer should remember, when a lawyer gives advice, it is just advice. The client can reject it. So even if the lawyer is saying something that the singer feels the company may view as too harsh, or the lawyer suggests a certain revision that the singer is hesitant to request, the singer – the client – is the boss. And the client can say, “no, let’s forget about that.”
FG: The lawyer can only give his best call on it.
RP: Right. And then it’s up to the singer to decide what if anything should be said to the company, and how the negotiations are going to work.
FG: And how much they may be willing to rock the boat. Is there anything a singer should do to prepare on his own?
RP: I think educating oneself about these matters is a good idea. Clients should read the paper that’s submitted by the recording company. And they should ask questions of the attorney, anything that bothers them or anything that they’re curious about. There shouldn’t be any harm about raising all their concerns with their attorney. That’s the point at which they can plan the strategy and figure out what issues are going to be raised and what ones are not going to be raised. I think for an initial meeting with a lawyer it is nice if a singer does come with a little preparation. I always like to know about the art of someone I am representing. I like to know – not that I’m holding myself out as a judge of the art or as an expert in the music – but I want to know if I am dealing with a soprano or a tenor. And what’s the repertoire? Is it Rossini? What’s the specialty? It helps in the negotiation if you know who your artist is. So if there’s a CD or a sample tape I like to listen to it. I like to look over the press kit so I have some sense of how they are presenting themselves, and how they want to be presented. I need to know what our leverage is, and what it isn’t.
FG: Do you think a singer should get legal advice for every recording?
RP: Yes I do. These contracts are legal documents. Well, I’ll give you an anecdote. I was at CBS Masterworks in Business Affairs. One day Placido Domingo came in waving his royalty statements around and wanting to know why he wasn’t getting royalties on some early recordings of his that we had issued. I said, “Placido, just sit down a second. I have no idea. Let me pull the contract.” So I went to the files and I pulled the contract and found that he wasn’t getting royalties because he wasn’t due any royalties. He had gotten a fee for the recording session and he hadn’t negotiated or hadn’t negotiated successfully at the time. So he was earning no more money from them. He had gotten paid a thousand dollars or something to do them, and now they were selling huge numbers of units and he wasn’t due any money because he had not negotiated. But he wasn’t Placido Domingo then. So that’s the reason I think it pays at least to think. And look, had he raised the issue of royalties at the time, he might have had no leverage and the answer might have been no. So it’s not necessarily the wrong thing. What’s right later in your career, or what you can get later in your career, you can’t necessarily get at the start of your career even if you know you should.
FG: Yes. You just don’t have the leverage to demand it.
RP: You don’t have the leverage, and sometimes those baby steps are important to getting established. So I don’t even think he was necessarily treated unfairly at the time, because he did what he was doing to get himself launched. It was “Hey, I’ve got to have a record out there.”
FG: And it was a beginner contract.
RP: Right. Exactly. So, each contract is different, and each situation is different, and that’s why I think it’s always a good idea for an artist to consult with an advisor before signing a document .
FG: Singers often need demo recordings that they can send out in order to get work. The orchestras, the unions forbid this but the singers record them secretly. As long as they are not selling them for commercial gain, can they be prosecuted legally for recording their performances and sending them out?
RP: It depends on the contract between the union and the orchestra management. If there is a contract that says that there can be no recordings of any kind, the answer is if they do it…
FG: They could be prosecuted.
RP: “Prosecuted” is a harsh word. They’re not going to be thrown in jail for this. But somebody could at some point go after them and say you owe us X dollars or you need to destroy this or something like that. The unions can get pretty vigilant. I don’t think you’re going to find a self-respecting lawyer who is going to advise clients to violate…
FG: Because you’re not going to be legally covered: you are not technically in the right in that situation.
RP: Right.
FG: I showed you a letter from a singer who took a job with a symphony for a concert and a subsequent recording session. He was paid a flat fee for both of $3,200 and then later wondered if he had made a mistake.
RP: Well it’s all hindsight. I think the posture that “the exposure’s good for my career” is right. And if this is a new singer he probably didn’t make a big mistake. If he entered into this kind of an agreement without anyone advising him or looking at it, it was a mistake but it probably wasn’t terribly harmful. You just have to start somewhere. And if the recording gets a Grammy it’s going to be great for the singer’s career. Listen, most classical recordings, even ones that get a Grammy, are not going to create a retirement situation for anybody. You don’t have that kind of sales.
FG: It certainly will help you get work and make your name. It’s good for your career.
RP: Absolutely. The issue isn’t really if the recording makes a profit, by the way. That’s not how recordings are looked at in the recording industry except by recording companies, which care if the recording makes a profit for them. Even in a royalty situation, the record company usually starts to make a profit long before the artist is earning royalties because even in the classical situation, the company will recoup the artist’s fee, which is usually an advance against royalties in a royalty case. The issue isn’t when the recording is making a profit, the issue is what are the sales. It’s good for the artist to know how his or her recordings are doing, to know how the sales are going and then if he is entitled to a royalty and at what point that kicks in. How you know is that you make sure that if you’re signing an agreement of this nature, you have accounting clauses and audit clauses and all the other protections that go in to a contract that provides an artist a royalty. And how you make sure those clauses are there is you go out and get a good lawyer. And that has to do with things like credit as well. Those are contractual issues and they can be raised.
It used to be that a performance contract was really straightforward. You show up April 3rd, you sing for an hour, and then we’ll give you a check and you can go home. But now these contracts frequently have extensive media clauses. So you have to think about these matters. They can make archive recordings, but the archive recordings can be used for certain promotional purposes and they also make video sales of one kind or another. So, while the contracts for performance are not really for recording sessions, the question is what can they do with the media that they’re creating out of the rehearsals and performances? Then the product exists and questions are raised as to who can do what with it and who has what rights to it. So you have to watch even the performance contracts for issues of media exploitation.
FG: But you don’t want to kibosh your chance to give the performance by asking for too much. Is that possible?
RP: Yes, but that’s every contract. Again you’re into the issue of leverage. If you’re Richard Leech or José Carreras you have some leverage to negotiate these clauses. If this is your first go ever, they’re probably not going to give you a veto power with what they can do with the video. So again it’s an issue of leverage. But I think that even for an artist with no leverage, it’s still good to know the issues. It’s good to know what you’re giving up, good to know what you’re getting. Then you can do it with your eyes wide open. You can say, “I have no leverage, I’m not going to win these issues now. I know what I’m giving up. Next case.”
FG: Yes. And not let it bother you.
RP: Right. You did it with full knowledge and you did the best you could.
FG: And you know why you did it at that point in your career.
RP: Absolutely.
FG: What are the basic kinds of contracts?.
RP: The basic kinds of contracts are what’s called a Date Agreement, which is essentially a contract for one recording, or participation in one recording. There is also an Exclusive Term Recording Agreement, where the artist is tied up exclusively for recording purposes. You could have non-exclusive term agreements where an artist commits to five albums but the services aren’t exclusive to one recording company. It can be exclusive for recital albums and non-exclusive for full operas. That’s a kind of standard variation. Most recording companies won’t commit to most artists to do all of the repertoire that the artist needs to do in terms of complete operas. So frequently there are “outs” for the artist. An artist can sign an Exclusive Term Agreement, but the agreement can also say for purposes of certain operas or for purposes of complete recordings there are “outs.”
FG: If your company doesn’t want to record a certain work, and another company does, they’ll let you out to do it if they have no plans themselves to record you in that piece.
RP: Exactly.
FG: What are the most common mistakes performers make in regards to recording contracts?
RP: The most common mistakes are not reading it, and not getting advice about it; just being so eager and thrilled to have a chance to make a record. Now we are talking about newer artists obviously, we’re not talking about more mature artists. But, they’re so thrilled to have the opportunity that they don’t read it or get some of the things that even a new artist can have for the asking. For example, for many years the form agreement at CBS contained a three-quarter-tape rate. In other words, if the royalty rate were ten percent, if a tape got put out, you’d get 7.5 percent instead of the ten percent. This is historical; that clause isn’t there anymore. That was the kind of clause that would be changed if anybody raised the question. But if you never even asked, it never got changed, you’d never get the full ten percent. So even newer artists should read and raise questions. And usually, if people are operating in good faith, if certain points are raised, you’re not likely – although it’s possible –to get a response from the record company, “Drop dead. This deal is off.” Normally you’re going to get a response, “Sorry, we’re not changing that.” Or “We’re not changing that for you.” Or “This is our policy.” Or “Yours is not an important enough role.” There can be a million answers. The answer isn’t usually, “Because you raised an issue, goodbye, the deal is over!” It doesn’t jump from raising a question like that to “No opportunity.” So there’s room in there, particularly if you’re well-represented. Your lawyer, or whoever, should have a feel for what can be raised and how it can be raised nicely and politely. So even if you don’t get every point you’re asking for, it’s not going to kill the deal.
FG: So don’t think you can’t stand up for yourself.
RP: Right. And sometimes, you may want to walk away. I mean it’s not usual, but there may be a deal that’s so onerous that you just decide it isn’t worth it. But that’s something the artist should sit back and evaluate. The moral is: There are points that even a new artist can bring up. And should.
FG: I would imagine that the question of royalty arrangements would go back to whether you have the clout to demand them.
RP: Well if the role is more than a two-second role, even for a new artist, if the role is significant, I think it’s a legitimate question to raise in a negotiation. If you get a contract and it just has a fee in it and no royalty, I think you’re entitled to say, “What about a royalty?” And get an answer. “The orchestra are getting a royalty and we’ve got Domingo and Kiri te Kanawa and there’s no room for you.” Okay. And sometimes you can say, “Yes, but there should be room because, this is a forty-minute album and I’m singing thirty-nine minutes of it!”
FG: If the singer has a royalty arrangement, how does he or she make sure the record sales numbers are accurate? Are the record companies generally above board? I have heard horror stories from artists.
RP: There’s always a horror story. But again, you make sure that you have a clause in the agreement that requires an accounting. You make sure that you have the right to raise objections. You make sure that you have the right to audit. You make sure that the accounting has to be timely rendered and in reasonable detail. You make sure that it includes not only sales but also gratis distributions. Frankly, that’s what makes a recording contract lengthy. If you look at a recording contract, which is not a royalty contract, it’s short. When you see a big hefty contract it’s because of the royalty provisions where you get into a lot of issues. And then afterwards you monitor it. You make sure that you get a statement. Then, if the album’s been out a year and you don’t have a statement, you know you should be doing something.
So you have to pay attention to everything. It’s an issue for artists who are starting out and think they don’t want to spend a lot of money for lawyers and accountants and things. But, you invest in coaching, an instrument, or vocal lessons or whatever. So, this is part of the career. And if you want it done right, you make a sacrifice to get it that way.
FG: Do you have any insights into how singers get recording contracts in the first place?
RP: You either have a good agent or manager, or your performance career has let you develop a relationship with conductors or other stars who say, “I want this artist on my record.” Frankly though, if I had a really great answer to that I would be…
FG: …a much-sought-after person!
RP: Yes. We’re all looking for a key. I think what you do is you try to maintain your relationships.
FG: The contacts that you make in the course of your work.
RP: Absolutely. And use them in a nice way.
FG: Networking in the really good sense of the term.
RP: Yes. Absolutely. I think getting a good manager and agent is important here. Finding a right match is tough in the management world.
FG: What would an initial consultation with a lawyer cost?
RP: Some lawyers might do that for free, although I’ve learned over the years that a lot of real work gets done in such a consultation. If you’re just in to view a lawyer to see if he has one head, and knows how to speak English, there should really be no fee. But if it’s really a consultation like “Where do I go from here? Will you read this agreement? Should I sign this?” then it’s a real consultation and the fee would be basically whatever the hourly rate is for the particular attorney. That could be anywhere from fifty dollars to four hundred. Now this isn’t to say that a really complicated project would have to be done on an hourly basis. There are all kinds of arrangements lawyers and artists can strike with each other. There can be a project fee. Or there could be a cap on the hourly rate. You know, we’ll negotiate it and bring it up to the point of making comments on the first draft, then the fee will be based on hours, but it won’t exceed a certain number that the artist and the attorney can agree on.
FG: So the artist should not be fearful of taking this step.
RP: No I don’t think so.
Robert S.Perlstein is an attorney with long experience in the record industry and a background in entertainment law. He has offices in New York and Berlin.
