Insight To Management

On the evening of April 5, 2005, Philip Lorito appeared as a guest speaker at The Circle, New York City's premier entertainment forum.  The audience included many young aspiring artists, people who specialize in various aspects of the industry and individuals who are pursuing a career in artist management.  Included here is the text of Philip Lorito's opening remarks which were followed by an informative question and answer period.

Good evening, I would like to thank Richard and The Circle for the cordial invitation they have extended to me.  I am pleased to be here and to have this opportunity to express my views and answer questions regarding artist management.  I sincerely hope that what I have to say this evening will be useful, positive and helpful to all who are here.

In organizing my thoughts about what to say, I have decided to fashion my comments toward aspiring musical artists and those individuals pursuing a career in artist management.  I want to also clarify that tonight all my references to artists are meant to describe undiscovered and relatively unknown talent and managers who are starting out in the field.  Managing or approaching for management artists who are already successful is an entirely different subject from what I am speaking about tonight.

Let me start by saying the exchange that comes about between artist and manager has always been and is sure to always be the most complex, delicate, pressure-filled and stressful of relationships within the entire music industry.  Although daunting and extremely challenging, the prospect of working with literally an unknown artist and developing that artist to a degree of success, meaning national or worldwide name recognition, can be an extremely rewarding experience.  For the artist, success is the fulfillment of a lifelong dream, that unbelievable miracle of being able to pay all the bills while doing something they really love - music.  When I meet people socially I am sometimes asked what I do for a living.  With a smile I often say, "I'm in the dream come true business."

I remember talking about the music business with the late Peter Grant, Led Zeppelin's and Bad Company's manager while on the 1979 Bad Company USA tour.  We got around to talking about how difficult it often is to communicate business concepts to artists.  Peter asked me if I had ever given any thought to what kind of a person it is who would want to grow up and become a rock star?  I then asked Peter if he had ever given any thought to what kind of person it is who would want to grow up and manage a rock star.  We both had a good laugh!  But his point was well taken.  By the very nature of what they do, artists are most unique people.  Artists are for the most part very special, very sensitive and greatly gifted.  They need to be who they are simply in order to be who they really are.  They have a strong, compelling need to express themselves through their music.  That need is as important to them as breathing and food.  Nearly all artists continue to express themselves in and through their music for their entire lives.  Whether it's the aging Rolling Stones announcing another tour or a retired insurance salesman who continues to pick up his guitar from time to time and plucks away.  You can say it is in their blood and you can also say it is their great love. I remember a young guitar player telling me that he has so much fun playing gigs that he feels guilty taking money from a club owner.  He felt that he should be paying the club owner to play.  Of course, I told him, "Kid, you really need a manager."  It is this very wonderful, powerful, joyous and nearly uncontrollable desire to perform their music that actually gives cause for a good, professional manager to fulfill the first, foremost and most important task in representing an artist - the role of protector.  As a good manager you must consider yourself a business guardian.  You must protect your artist from being unfairly exploited by those who would use his or her services to their benefit without correctly and fairly compensating the artist.  A good manager protects his or her artist from the unscrupulous with great passion and intensity.  From a practical point of view, a manager is taking on a tremendous responsibility and obligation once he or she is representing an artist.

The ideal situation would call for the artist to focus 100% of his or her energy into those matters which are art while the manager focuses 100% of his or her energy into those matters that are music business.  This is essentially the teaming of the two forces that are to work hand-in-hand toward continuous, positive progress in the artist's career.  But the true dynamics of the relationship are not that simple.  It can become far more complex and difficult because a good manager, especially one with experience, will cross the demarcation lines between art and business and be compelled to give some artistic direction to the artist to better fulfill the business goals which are desired by both.  This influence upon the artist's art by the manager cannot occur without the artist's willing consent.  A manager should never forcefully pressure an artist to perform any music or appear in any manner or place which is objectionable to the artist.  Now, on the other hand, there is every reasonable expectation that the artist is going to express opinions, ideas and beliefs concerning how their business is conducted.  This issue of crossing over into art by the manager and business by the artist is the cause of great tension and stress in artist/management relationships.

I believe strongly that before an artist and manager agree to work together there needs to be a period of courtship in which the artist should study a prospective manager very closely, get to know his or her philosophical approach to the music business, understand the manager's history and measure his or her degree of belief, passion and experience. The artist should never feel intimated by a prospective manager or shy about making inquiries or stating their feelings and ideas.  Also, and most important, the artist should use his or her intuition and gut feeling.  If an artist does not like or feel comfortable with a prospective manager they should not go forward with a relationship.  Now this is much easier said than done.  Again, the artist's deep-seated desire to have an outlet for their music as well as the driving force for success makes it very difficult for a unknown artist to reject an approach by a professional manager.  But, considering the fact that most management agreements run for years, signing with trepidation can lead to a disaster.  I believe an artist is much better off waiting and plugging along on their own than to sign with a manager they can't connect with in some misguided hope that it will all work out in the end.

I have been asked from time to time about the concept of a big management company where a very successful manager sits at the top of a corporate structure and retains what I call "junior managers" to handle the day-to-day affairs of the artist.  I believe that the same sort of courtship or interview should be conducted with the junior manager being assigned to represent the artist as well as with the top manager.  The artist needs to feel positive about both and understand how they will communicate with each other about business issues and create an understanding that allows the artist to have communications access to both.  When making an arrangement to sign with this type of management company, your attorney should include what is known as a key-man or key-woman clause giving you some options in the event that your assigned junior manager is no longer rendering his or her services to the management company.  Also, a clause can be inserted relating to communications access with the top manager.

What about the inexperienced manager?  There is something to be said for that young manager who might not have any star acts on his or her roster. Every successful manager had to have his or her first hit artist at some point along the way.  There is a downside in selecting to work with an inexperienced manager.  It is mainly that he or she will be learning and gaining experience while functioning as your manager-a sort of on the job training if you will.  As long as this learning process is not at the artist's expense, this type of relationship could work.  The ideal situation would call for a bright individual who is full of enthusiasm and is working in the management field full time.  There is something that applies to all managers but to a greater degree the inexperienced manager.  It is being charged with the obligation to be as knowledgeable as possible about every aspect of the music industry.  The manager must try to read and study more now than at any time in the industry's history.  Our business is changing daily with new and innovative ideas being disseminated instantly over the Internet. Keeping abreast of the vast amount of information is a gargantuan task.  The inexperienced manager should consume as much information from the many books that have been published about the mechanics of the music business and devour as much data as possible on the web.  With regard to the issue of "contacts," yes, an inexperienced manager will not have what is termed as contacts.  But, frankly, I think the issue of contacts is very much overstated.  I would forego all my so-called contacts for one super talented artist or band.  I say this because, regardless of how many people I know in the music business, among them there is not one record executive who would sign my artist merely because I represent them.  The music and the talent needs to be there!  If a record executive thought he or she could sell millions of CDs they would sign the act regardless of the manager's level of experience.  Yes, access to these executives has limitations when you are an inexperienced manager, but your resourcefulness and business creativity combined with a great musical talent will win out in the end.  Bring your talent to the public and the record companies will follow.  With the issue of inexperienced managers, in the final analysis, it is the bright artist who would need to identify that smart, hard-working, up and coming manager who is sincere at heart with an unshakable belief in the artist.

The manager who is out seeking talent to represent has to understand that one of the foremost attributes which needs to be developed is the ability to discriminate about which artist to approach and seek to represent. For example, over 20 million people live within 100 miles of were I stand.  The number of musical artists in all genres easily runs into the hundreds of thousands.  That's an enormous pool of talent.  That gift to listen and watch an artist's performance and sense that you are viewing a future star is the key to your success as a manager.  I believe that out of the hundreds of thousands of artists in this area, only a small number of them will achieve major success and that a greater number of these artists who have star quality will never fulfill their true potential.  There will be many reasons for these failures and for a large percentage of these cases, not having proper representation will have been a deciding factor.

Once you have approached an artist or group you want to represent, you now embark on the courtship.  The manager must hold honest discussions with the artist to gain some insight into what it would be like to represent them.  There needs to be an exchange of ideas on how the manager views the road to success for the artist.  It is incumbent upon the manager to reveal some of the changes he would like to see whether in the artist's musical direction, appearance or projected image.  The manager must understand clearly what changes the artist is willing to make and the degree of compromise the artist will accept as a manager moves into areas of artistic direction.  Likewise, you must convey your limits to the artist as it relates to their involvement in business decisions and direction.  Although a manager exclusively represents an artist, it doesn't mean he or she can compel an artist to take any action or consummate any deals they don't wish to participate in.  Just as I said earlier, the degree of artistic influence a manager has with an artist is limited by what the artist will allow; likewise the degree of business decision finality granted a manager is ultimately determined by the artist.

There is another aspect to be considered in the evaluation of an artist by a prospective manager and that is the individual.  There is a term in management whereby an artist is referred to as "high maintenance."  This is a complex matter that goes to the heart of the term "personal manager."  You as a manager can be faced with an incredibly talented artist who might have a personal lifestyle or a view of life that makes you uncomfortable.  They might have some bad habits which you are not equipped to deal with. You might sense emotional problems that are way beyond your ability to cope with.  If this is the case, don't get involved.  Trying to create a successful career might become an impossible task.  Understand that an artist without a good support system of family and friends might very well turn to you with very personal issues.  If you are a good manager you are sensitive to people and you must realize that it will be very difficult to keep yourself from becoming involved in this troubled artist's personal life.  Making a decision to represent an artist with excessive and serious personal problems only compounds the degree of responsibility and obligation you are taking on.  In these cases, it is incumbent upon the manager to search his heart and soul and determine whether representing this individual is something he or she can do and be successful as a business person.  You need to be fair to the artist and to yourself.

Now, I don't want to be misunderstood.  I am not suggesting that a manager is not a compassionate friend who an artist might seek help or advice from.  There have been countless times I have gone above and beyond the call of duty as a friend of an artist I represent and when I have done so, I have never felt it was my job.  I always sincerely felt I was simply helping a dear friend.  More than once I have had the phone ring in the middle of the night and found myself sitting on the side of my bed for hours talking to a distraught artist who just broke up with his or her boy friend, girl friend, husband, wife or whatever.  There have been countless hours, countless places and countless situations where I have been there for a friend.  Maybe it's me, but I find it impossible to manage individuals who I don't like or feel empathy toward.  What I am cautioning is entering into a management/artist relationship knowing up front that the artist's personal problems are very serious and you as the manager might be ill-equipment emotionally or lacking the experience to deal with these kinds of serious issues.

When the artist and manager get past the courtship period successfully, you move on and announce the engagement.  This is the period in which a written contract must be prepared and executed, spelling out the understanding between both parties.  I strongly believe that any and all management relationships should be entered into with a written agreement.  Do not enter into this type of a relationship without a contract.  "What is not written is rotten."  As a manager you need to make it very clear and strongly encourage the artist to retain an entertainment lawyer to review any contract you present.  If you are inexperienced as a manager it would also be in your best interest to retain an entertainment lawyer.  Please note I stress the term entertainment lawyer.  This is important since an experienced entertainment lawyer will fully understand what is standard in the music industry as well as the nuances of the contract.  There has been so much published out there which illustrates the terms of a fair or standard artist management contract that coming up with appropriate language should not be a problem.

I want to say something as an aside to this contract issue.  I feel very strongly that the role of a manager is to conduct business on behalf of the artist and do all such things that will result in the maximum amount of revenue being earned by the artist.  I don't believe it is fair or ethical for the manager to have any interest in the artist's music publishing, merchandising, ownership of master recordings either audio or video, booking agency rights, concert promotion rights or any other such interests.  The sole income derived from an artist by a manager should be limited to a commission on the artist's gross earnings and that's the only monetary incentive a manager should have.  I will tell you that in my 35 years as a manager having direct involvement in numerous records deals, I have never given up the artist's publishing rights.  The only exception was a very unique situation in which Led Zeppelin purchased 50% of Frank Carillo's publishing during the time Frank was on Atlantic Records and without going into details, that was a very unique situation based on special relationships.  Regarding the issue of record companies wanting the publishing of the acts they sign, of course, if you understand the implications you wouldn't blame them for wanting the publishing rights.  But there is not a single record executive worth his salt who would forego signing a hit act because he can't get the publishing rights.  The landscape of the record industry is changing so very rapidly that it is becoming more and more practical for managers to start up and run their own small independent record companies and give their artists a platform to create some presence in the marketplace.  Without getting too deeply into details, this concept has such enormous potential that I have moved in this direction.  The motivation is not to build a record company for myself but rather to create a vehicle which will enable the artist to develop.  The management contract should be exactly that and should never contain rights and claims beyond the scope of artist representation.  Once the management contracts are signed the marriage has taken place and the hard work begins.

In conclusion, I want to say there is a place where I hope you as artists and managers travel to.  I have been very blessed to have visited that place more than once.  It is where the gifted managers and gifted artists collaborate on both business and art and find a balance which works well for both, where each has the respect and trust of the other and with care and sensitivity, work as a team and build one success upon another.  It is truly the place both manager and artist should strive to find and when they arrive there, they will most likely find an abundance of gold and platinum.

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