EQ Magazine - May 2008 - (Page 13)

PUNCH IN undesirable judicial rulings. The main hypothetical ruling is that, now that the label has total participation, they may also have a fiduciary responsibility to the artist. In laymen’s terms, this means the label is legally responsible for helping the artist make decisions that are in the artist’s best interest—which might mean not signing the deal. Ironic? Sure. Bizarre? Definitely. But very possible, and this is why being a fiduciary is something labels have been trying to avoid for decades—to the point of spending gobs of lobbying dollars. Another area to explore is “conflict of interest.” All of the revenue streams the label now participates in seem to qualify them as a “manager.” However, by law, you cannot be both a manager and a label to the same party. In many such cases, judges have severed—and sometimes completely dissolved—contracts because of such conflicts of interest. Case three: If the label uses 360 Deals as an opportunity to start booking acts (and they will), and the label is based in California (as most of them are), they will bump up against California’s famous Talent Agencies Act that prohibits anyone other than a registered agent from booking gigs. And if the label doesn’t secure their legal status to book gigs to sidestep this law, the artist could then claim that the label has abandoned some of their rights, and, therefore, the judge may give them back to the artist. The labels’ first defense will be pretty obvious. They will claim they are not really mangers, or agents, or fiduciaries. They are simply enjoying revenue from these sources without actually contributing to their value. This will lead to the artist claiming “unjust enrichment”—an almost indefensible position under these circumstances. Now, it’s possible the labels have thought all this out, and are ready to tackle such claims. After all, it’s not as if big business entities are short on legal counsel. But, historically, labels have been short on long-term thinking. Given that, I doubt they are ready for any massive artist backlash. In addition, if they are as unprepared as I’m guessing, there will be some very intriguing sparks in the years to come. Instead of threatening to audit their label, if an artist became unsatisfied, they will simply threaten one of the actions above. No label wants to go to court over a contract dispute. History has shown that judges look shamefully down at them, and these issues have even greater legal teeth than the old ones of simple “breach of contract.” I predict labels will do nearly anything— up to and including giving back some of these new “rights”—rather than debate the integrity of their new 360 Model in front of the courts. I mean, imagine investing millions in an act only to have a judge say the deal is off. Then, imagine every artist using this ruling to get out of their record deals—years after they have taken large advances. As the old Chinese proverb goes, “May you live in interesting times.” www.eqmag.com MAY 2008 EQ 13 http://www.eqmag.com

Table of Contents Feed for the Digital Edition of EQ Magazine - May 2008

EQ Magazine - May 2008 Contents Talk Box Sounding Board Jamie Lidell, What the New Model of Record Deal Means to You, Part II, Andrew W.K. Tool Box Aerosmith Fast Tracks Guitar Trax Bass Management Key Issues Drum Heads Vocal Cords Mix Bus Cheat Sheet DigiDesign Pro Tools LE 7.4 Cakewalk Sonar 7 Line 6 UX8 Studio Projects CS5 Art Tubefire 8 Jazzmutant Dexter MCDSP Emerald Pack Overloud Breverb KRK Exposé E8B Mackie MR5 Blue Sky Exo Monitor System Big Fish Audio Around the World in 80 Raves East West Fab Four Virtual Instrument Sony Matt Fink- Starvu Session Keys Room With A VU

EQ Magazine - May 2008

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