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Kickbacks vs. commission
Old 7th July 2002
  #1
Lives for gear
 
e-cue's Avatar
 
🎧 15 years
Question Kickbacks vs. commission

I'm a freelance engineer without management and love it this way. I've had a couple manager's in the past, and while it's nice to have them handle some of the business, they always acted like THEY were MY boss. Now, I negotiate my own rate, schedule myself, and have a person that takes 5% to do all my billing for me.
When a studio manager hooks me up with a gig, I pay them a commission (after I'm paid for the gig) of anywhere of 5% on up. This seems honest to me. However, lately I've been getting fishey requests for commissions from A&R reps that just don't seem legit to me. Sometimes, it's blatant "Hey buddy, you wanna mix every song I work on, let's see some dead presidents (cash to the non-Americans)" and I know this is just a kickback. But where do you draw the line? Seems like I'm drifting more into the gray area, and usually if I'm in doubt, I avoid the situation all together.
Legally, and ethically, what is the difference between a commisson and a kickback?
Old 7th July 2002
  #2
Craneslut
 
Brad Blackwood's Avatar
 
🎧 15 years
Re: Kickbacks vs. commission

Quote:
Originally posted by e-cue
Legally, and ethically, what is the difference between a commisson and a kickback?
A kickback is something you pay someone for getting you a gig you wouldn't get otherwise...
Old 7th July 2002
  #3
Founder
 
Jules's Avatar
Well the A&R guy already GETS a wage for their job - finding mixers for tracks, so that's a kickback demand for sure!

Still, its a poor industry to play Captain America in so.....

You could persuade yourself that these people are all sort of acting as 'freelance agents' for you - and they just happened to also have paying jobs!

I wonder if they would have the balls to demand that if you used a manager?

Hmmm..! An upfront "so lets get this straight, you want a percentage of each job you give me? - How much then?" would do.

Practically - Being blackmailed further down the line / A&R folks upping the commission demands AFTER the fact and I suppose being arrested are all things to concider. Also there's the phrase 'guilt breeds resentment' - The A&R could turn their backs on you if they feel guilty later on about their actions.. What if the kickback guy becomes president of the company? Will he dig seeing you around the building?

Morally - The extra dough either comes from your share, but more likely from an elevated fee to accommodate the kickback, in which case, the artist is getting shafted. One could, on the other hand, have the rose tinted view that the whole process was necessary to get your unique and career enhancing talents on the artists project.

Wow! I would probably learn how to roll with it but would be sure to treat the session to a nice dinner so they remember me favorably later on when on the witness stand!

The morally 'more solid' here will be outraged by the practice I am sure..

As to the precise criminality of the arrangement, I admit to being totally in the dark... Probably it's very serious! Beyond Judge Judy's level I imagine, more yer Ally McBeal type of thing!

I offer percentages to folks I know in a position to recommend me on a frequent basis. I owe one drummer chum a dinner, thanks for reminding me!

Such an interesting topic!

(I hope that smile doesn't scare you!)

All rise!

heh
Old 7th July 2002
  #4
Lives for gear
 
Ol' Betsey's Avatar
 
1 Review written
🎧 15 years
Whoa e-cue, that's pretty heavy. Not in a "run for your life" kind of heavy but definitely an Ally McBeal vs. Judge Judy kinda way.

I would say that's a pretty serious case of "conflict of interest" coming from the A+R guys.

All hypothetical...

Just say a band ends up spending $500,000 recording their album (which I don't think is too uncommon among some the acts I imagine your working with...) and it's flop.

The reason the band are unhappy is because they think management within the label totally screwed them over.

The Band/Label end up in court, your called to in discuss your professional dealings with said label (dig my courtly vocab. ) and somehow it comes out that the A+R was receiving a commision from you in return for mixing the album.

Well the A+R guy is supposed to be trying to get the best product for both the band and the label and anybody knowing that he has a financial stake (outside of wether the album actually sells) in whoever mixes the record would know that this objective could be compromised.

All the band would have to say is that if they'd had the record mixed by someone else (and I'm not saying you didn't make this thing shake some ass, cuz I"m SURE you did!) it would have sounded better and they would have been famous. But because the A+R wanted to make some extra cash, he used you because he had a financial interest in you doing the work.

Man, I'm not a lawyer. In fact I watch Judge Judy just to find out what I should do when somebody messes up my wedding pictures! (that's IF I ever find a woman, but that's another topic, right?) But as you say, this does indeed sound fishy.

As far as giving commision to people outside this circle (studio managers etc.), I totally agree and feel that your being a bro and keeping the machine finely oiled.

What would I do? **** man, I don't know. Maybe I'm over reacting but knowing how America is... (And I'm American too!)

Morality aside, if you think your makin' a band rock then I reckon your doing your job, regardless of who else is getting paid. But this wasn't really the point was it... ?

Jules has a link to a music lawyers forum on this sight, maybe you could swing this by them? I don't know how much help they offer on this but it's worth a shot, right?

REALLY interesting topic rollz

I wonder what others here think?

R.
Old 7th July 2002
  #5
Lives for gear
 
e-cue's Avatar
 
🎧 15 years
You guys all bring up very interesting points. Much pondering will be devoted to them in my daydreams. So, if I offer them money after I get a gig, it's a commision. If THEY ask me (typically but not limited to a result of pressure, coercion, or a secret agreement ) it's a kickback. Note: Most of time if someone like an engineer buddy, producer, etc hooks me up with a gig, I'll send them a gift (nice bottle of wine, lava lamp, etc) as opposed to cash. These gifts are usually more personal and feel more like a "thanks buddy" gesture than a "There's more money where this came from" kinda deal.
Old 12th July 2002
  #6
Motown legend
 
Bob Olhsson's Avatar
 
🎧 15 years
Not that it makes anybody feel better but this kind of crap goes on in almost every industry where an employee makes a decision about where the company is going to spend their money. One of the uglier payola situations I once ran into was one where well-heeled artists' managers were paying DJs even when labels were refusing to. I don't believe the industry is corrupt but unfortunately plenty of individuals are.
Old 20th July 2002
  #7
Lives for gear
 
e-cue's Avatar
 
🎧 15 years
*rolls eyes*

Since I started this thread I've been OFFERED kickbacks by session musicans, studio managers, AND ASSISTANTS (Ask for me as an assistant and I'll buy you a 6 pack). Man, I hope these audio schools start teaching a class in ethics. (note: After giving these people a stern lecture, I haven't used any of them since)
Old 19th August 2002
  #8
Gear Head
 
🎧 15 years
Yeah, Bob, now we get to pay the "indie promoters" for radioplay. It was probably better when DJ's were involved, rather than the incestuous corporate thing we have today! It's absolutely ridiculous. One of my partners produced & mixed an album for Grand Royal/Capitol, they spent $150,000 on a "promotion" with a big local radio station (KROQ), and the single got played... ONCE! A total of $1.5 million on radio promotion, and the act went nowhere in the U.S.

e-cue, you gotta play the game, but giving A&R a kickback is bull****. But, man, weirder things have happened. Like how a certain "producer" (more of a business guy, actually) who is now heading a Major here in L.A. is actually re-recording certain acts with an entirely new producer so he can put his name on the project as "Executive Producer" (he makes almost no production decisions). This is so that when he gets fired from the label, he still maintains a so-called track record of projects... the band gets TOTALLY screwed. So, that's my gripe!

Nice business, music...

-C
Old 19th August 2002
  #9
Moderator emeritus
 
🎧 15 years
This thread has suddenly gotten a bet more interesting, since someone asked me the other day about trying to book my rooms in return for a commission. Effectively, this person would funtion as a salesperson for me and the room. I can see a few potential problems with this (for instance, figuring out whether it was my doing or his that brings in a client), but it seems like it might be a workable deal for me, assumiong that he actually can bring in work. Has anyone else tried this approach?
Old 20th August 2002
  #10
Motown legend
 
Bob Olhsson's Avatar
 
🎧 15 years
Quote:
Originally posted by Dave Martin
... this person would function as a salesperson for me and the room. I can see a few potential problems with this (for instance, figuring out whether it was my doing or his that brings in a client), but it seems like it might be a workable deal for me, assuming that he actually can bring in work. Has anyone else tried this approach?
To be honest, I've heard of very few studios being successful without some kind of a salesperson. This is very different from a kickback where people don't realize money is changing hands as part of a personal recommendation.
Old 20th August 2002
  #11
Lives for gear
 
e-cue's Avatar
 
🎧 15 years
Any studios that offer to kick me back a little something-something for doing my project there first get the 'how do you sleep at night' lecturefrom me, then I tell them to give my clients a good rate, say whatever they were going to give me deducted from the going rate. Any of the studio managers that know me know that I don't play those reindeer games, but it does seem to come up when I hit up a new facility, mostly short sited people.
Old 20th August 2002
  #12
Gear Head
 
🎧 15 years
e-cue, I'm sure you know that's a fairly common scenario, unfortunately. Several producers play that game. Your stance sets you apart as a good guy. Ultimately the artist gets screwed. I have a great deal of respect for you, man.

Jules asked a good question: "I wonder if they [A&R & kickbacks] would have the balls to demand that if you used a manager?"

First of all, the A&R guy(s) you're talking about are probably on their way OUT (or at least they think so), and they're looking to cash-in any way they can. Same applies to a studio... they're probably in such deep water financially, you could probably get an insanely good deal with a little negotiation (obviously these types of situations put you in a position of strength).

But in regards to A&R, this situation would never *need* to happen w/ a manager. After all, the bigger managers have so much political clout, they already have their backroom deals worked out with A&R. Hell, someone like Lippman or Moire-Marie could eventually set you up as the president of a Major label!!! Jeeze, those folks have some scary power...

Apparently the studio business is not a good one to be in, so as Bob pointed-out, they try anything they can to get the business. Lots of people have lost their shirts. Look for The Plant in Sausalito, CA to close or at some point soon. Rumbo is for sale. Conway never makes a profit. Yet, Skip Saylor just opened up a second facility... I think the only way a studio can really survive the future is by becoming more of a "production house" than strictly a studio.

Peas,
C
Old 20th August 2002
  #13
Lives for gear
 
e-cue's Avatar
 
🎧 15 years
Good points. Even if I discussed an upfront, no b.s. commission from these A&R / Studio Managers / etc there's still such a major conflict of interest going on, it makes me worry that these people with shady morals will end up screwing me at some point. If you wanna be successful, surround yourself with successful people. If you wanna be shady, surround yourself with Skip Saylor, I mean, shady people.
Old 20th August 2002
  #14
Founder
 
Jules's Avatar
When I was working as an assistant all the producers that asked me to write down less hours than used to save a LOT of money on late & long sessions... all had one thing in common.

1) they didn't think to try to make a deal with me in advance

2) at 5am they never had the cash in their pockets to back up any 'offer'

I figured word might get around if they were dumb enough to not take care of points 1 & 2 so I don't recall ever doing it.

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