Lady Gaga vs Producer reveals interesting problem for a Manager

Posted: March 24, 2010 in Artist Management, News Items Comments, Personal Manager
Tags: , , , , , , , , , ,

Lady Gaga is being sued by her long time Producer Rob Fusari for $30.5 Million

What is interesting to an Artist Manager is her defense as it brings up the very pertinent point for California Managers in particular that in California a manager is not allowed to act as an agent and get gigs for his artist.

He can’t be a manager and an agent its one or the other.

One needs an employment license to get some one in employment,a gig, in otherwords in California.

Other states have different laws and other than the fact, that doing both for an artist can be a conflict of interest ,in most states one can do both and be an agent and a manager.

The defense being put forth by Lady Gaga’s attorney is that he acted as an agent without an employment license.

The report in the Daily Telegraph in UK says:

“Mr Fusari claims that their business partnership entitles him to 20 per cent of her record deal.

He acknowledges that he has received $611,000 from her but says it is not his full share.

But Lady Gaga’s lawyer Charles Ortner told that court that the agreement between the singer and the producer was “unlawful”.

He said that Mr Fusari and his company violated statutes that prohibited them from “acting as employment agents without a license and charging Lady Gaga an unlawful fee for their purported services.”

Mr Fusari’s lawyer, Robert S. Meloni, called the claim “ludicrous”.

“Rob was no more of an ‘agent’ for her than she is a Roman Catholic nun.” ”

Like that last line good one!

I’m not sure where this lawsuit was filed but it looks like the UK so presumably they have a similar laws as California in regards to being an agent and any other function for an artist.

I’m not a lawyer of course but it is my understanding that an artist can sue his manager for all back management commission’s to be repaid if the artist can prove the manager got him employment as a manager in California which is pretty scary for a manager.

Because the problem is that most managers get their artists gigs that they then pass on to the artists agent (or not) as the case maybe to issue contracts as the employment agent.

One presumes there is some sort of conflict  existing between the artist and manager for this to come about and they are hardly getting along if this is happening but it has happened.

I understand, for instance ,there was a case  between Jefferson Starship and their manager and I believe Starship won and got their commissions paid returned.

The law stems from the old MCA company who were agents,managers and producers for their clients, the true 360 deal I guess.

They put their acts in their moves and concerts which was then considered as a “conflict of interest” and the law was passed.

Besides which no other agents could get their artists in MCA movies or ventures….not fair …. penalty kick!!!

I’ll give an example of how this could be a conflict of interest if I can.

The agent brings in a gig for an artist playing at Disneyland, the artist is an esoteric Jazz Pianist and the gig is totally the wrong place for the artist to perform. But the moneys very good and if the Hats of manger and artist are worn by the same person there is no one to say to the agent “hey thats wrong gig for this artist” forget it.

I’ve actually done just that and turned down a high paying gig from an agent as it was not right for my artist despite the money involved.

The manager is in fact part of a team and usually the General of that team that consists of the Manager,Agent,Producer, Attorney,Publicist, Business Manager (CPA) Promotion team,Record Label  etc. etc.

I lost a long term client one time by wearing all these hats and in fact the artist, in hind site, had NO manager in the end as its impossible to do all those functions with out creating a conflict of interest situation.

How can one be the Manager and the Record Company president.

What if the artist should be on another Record Label, is the manager going to take the artist off “his” Record Label to another label? I severely doubt it and if he did,  that would be pretty commendable if the manager could be that objective.What if he also has a fiduciary duty to run the record label to the best of his ability then he has a real problem.

It remains to be seen if Lady Gaga will prevail and the Producer (agent,manager?) what ever he is role was will get his $30 mill.

So there is an interesting scenario developing with the advent of Record Labels doing 360 deals with acts and wearing all the hats ,artist managers continually violating the California Agent/Manager  Law and getting their artists gigs and sometimes even writing the contracts. It would seem some change has to occur here on the legal level?

Not to mention with the declining state of the music business and with less income how long will artists be able to afford 10% to the Agent,15% to the manager and 5% to the Business manager,not too long I would think?

I submit to be practical these functions will have to be worn by less people and a more moderate percentage % taken from the artist as the their gross declines so they have some money to keep at least close to their existing life style!

But how do we retain the separation of these functions as they are all different and require there own expertise and if worn by one person present a “Conflict of Interest” situation in my opinion .

Plus if anything goes wrong the artist can sue and get his money back which is not bad deal for the artist at least in California.

I have a feeling there is a lot I don’t know here as I am not an attorney and this is turning out to be a frightfully boring post unless you are a manager or agent and they don’t want to hear about the problem anyway.

Interesting though if you are a manager and could be good news for artists who want to get rid of their managers and get their money back at the same time!

  1. Kent says:

    Congrats on the blog Ron – good stuff. Call sometime if you are so inclinded would be good to catch up.


  2. Congrats on the blog Ron – good stuff. Ring me up sometime if you are so inclined – would be good to catch up (312-805-2440)

  3. Paige Dunlap says:

    Wow I am honestly the only comment to this great writing?!?

  4. […] Lady Gaga vs Producer reveals interesting problem for a Manager March 2010 4 comments 4 […]

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