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Creating new guidelines for engagements

Atholl Swainston-Harrison, Chief Executive of International Artist Managers’ Association (IAMA), explains how experiences in the pandemic have informed IAMA’s new guidelines for engagements.

The unwelcome arrival of COVID-19 impacted the music sector far longer than we could have anticipated. It also brought to a head the fault lines in our fragile music eco-system, as we witnessed contracts being shredded, whether through force majeure or cancellation. We learned that the concept of force majeure does not exist in every country - and how undefined it really is in legal contexts. It was overlooked in the past, and at times, not fully understood or tested properly. We have also witnessed some truly wonderful examples of presenter generosity, contrasted with presenters who moved to protect themselves without regard for the artists who were left high and dry. The vulnerability of the artist in such a situation was clear, and so too, their artist managers, whose commission income comes after completion of a contract. As cancellations ploughed through well-made plans, the amount of work that was created through unpicking and remaking schedules left even the most normally-tireless artist manager exhausted.

Early in the pandemic, the sector gathered to examine the business model that had become somewhat flabby in its over-reliance on simple agreements and erratic income streams. Questions emerged. Would a deposit payment for booking an artist offer more security? What would secure the artist’s contractual position in future scenarios of such magnitude? The nub of the problem is risk. While we all agree it is a shared risk in theory, in practice the current model does not support this – particularly the artist’s position, which artist managers are expected to uphold in the eco-system of the professional performing arts world.

The core discussion areas were an improved model of business, along with all the other pitfalls in the timeline up to a performance. Would use of deposits stop presenters loading their ‘shopping baskets’ only to toss the pencilled engagements later on? Would a deposit make an artist think twice about cancelling an engagement? What about the use of digital media going forward? What value does the digital world have - and has too much been given away for nothing? Is it right to sell a season/programme when the contract with the artist has not been finalised? All these questions were discussed intensely.

High profile presenter members and experienced artist managers formed a business committee which looked at several scenarios, beginning with the idea of a deposit on booking an artist. While this sounded like a good idea at first, artist managements pushed back after realising they might become bankers in some situations - holding onto money that they could not commission. If the deposit was paid directly to the artist, what would happen in the event of a cancellation? It could become very messy in general application. Advance payments, however, are appropriate where there is a clear case involving preparation, such as a new commission, or when the work of an opera or music director begins long before the performance period. However, the circumstances of the presenter might make that difficult, for instance, a festival heavily dependent on sponsorship paid after the event. Clearly there will always be cases whereby an advance on fees would be reasonable and acceptable depending on the circumstances of the presenter. Some countries have legal frameworks that prevent any form of payment until the ‘service’ has been delivered and that includes expenses which the artist covers until the contract is complete.

The ‘flabbiness’ I referred to earlier often arises from a lack of timely communication, for example: the artist might be presented with unexpected media plans at the last minute or contracts arriving so late that it is almost impossible to do anything about querying them. A question often raised: is it fair to promote and sell tickets when a contract with an artist has not been concluded? A Heads of Terms (HoT) document was a possible way to firm up agreements earlier in the contact process, but while some countries recognise a trail of emails, the Anglosphere has a slightly different take on the legal integrity of such arrangements. Nevertheless, this is generally accepted as a way of firming up arrangements early on while a contract is still being drawn up. Both presenter and artist manager must do more to discuss scenarios and details, and if one cannot offer enough information, there should be an acknowledgement of what areas remain unclear.

Given that our members are spread around the world, it is evident that it is challenging to address some of the inconsistencies and give both artist manager and presenter confidence in approaching a negotiation. It is hoped that the following approved IAMA guidelines outline a useful set of values and practical considerations that will help that process and secure a better future for the artist. The document has also been adopted by our sister association, the Association Européenne des Agents Artistiques (AEAA).

Guidelines for engagements

The COVID-19 pandemic has created a global shockwave, with artists and the whole music business ecosystem severely affected. The mass postponement and cancellation of performances has necessitated a review of how we do business, with the result that the IAMA community has come together to debate a better and more robust framework for the future.

We recognise that:

1. The central focus in our business should be on the recovery of music life and fostering fairness and sustainable values throughout the sector. Rebuilding trust is one of our crucial tasks.
2. Shared targets should include improved security in each party’s commitment to an engagement; clarity in the terms of engagement; transparency and fair cancellation policies within the post-COVID environment.
3. A range of businesses/organisations of varying size and legal structures make it impossible to set any single set of binding rules. Therefore, a set of guidelines is set out for consideration in each negotiation.

Checklist of options:

1. How to clarify and secure in advance a mutual commitment to the engagement?

Even when a full contract is not yet possible to draft, a written confirmation of basic terms should bring clarity. Many contracts are drafted very late, contributing to insecurity.
This could be addressed by a policy of sending a booking confirmation or a concise Heads of Terms (HoT) document, made as soon as basic terms (date, repertoire, fee) are agreed. Such a HoT should be a short, concise document or written confirmation of the booking, leading to a more detailed contract to be signed later in the process. Parties should endeavour to be clear in their positions by the time the season is published, irrespective of the contract delivery date.

2. Media exploitation

Media exploitation has emerged strongly over the course of 2020/21 with the result that there is a new reality to discuss in many scenarios. Sometimes media plans are late in the planning so it is essential that the option is discussed at the earliest opportunity and not overlooked as a secondary concern. This includes a transparency on any exclusive media deals that may compromise the contract.

3. Are the cancellation terms clear?

A thorough and open discussion of cancellation terms is strongly recommended. Recent history has revealed the legal and mutual understanding of force majeure/ frustration of contract/ circumstance exceptionele to be inadequate and it is an area likely to present difficulties in the future. Cancellation terms, however, are within a scope of the contracting party’s control and therefore should be thoroughly discussed. The cancellation terms agreed may be suitable for inclusion in a HoT.

4. Covering the artist’s expenses in case of cancellation

How are the costs already accumulated by the artist to be refunded, if the presenter needs to cancel the agreed event? This also may be suitable for inclusion in a HoT.

5. Would a separate fee guarantee and/or cancellation compensation be applicable?

Once a booking is confirmed, it should be recognised that the artist is committing to be available and prepare for the engagement. Advance payments are an option but may cause complexities and can be difficult to handle, but case by case there may be grounds for agreeing a non-recoupable advance. In the case of cancellation by the presenter an agreed compensation formula could be more straightforward to agree up front.

6. A clear postponement policy

Agreement on a postponement policy whereby an alternative period/engagement date is envisaged within a reasonable time – ideally not more than two seasons following the postponed event but this may be case specific. In such a situation, it could be reasonable that part of the engagement fee is paid at the original time of the engagement, as a non-recoupable advance on the full fee, the balance of which is paid when the engagement actually takes place. It might be that the postponed engagement is subject to a new contract too.

7. Preparation fees in advance

There might be a case for a ‘preparation fee’ – an advance payment when work is clearly being undertaken such as in the case for music directors, chief conductors, artists in residence, opera directors or a new commission. This “preparation fee” might be part of the whole negotiated fee.

8. Heads of Terms

Members have often asked IAMA for a standard artist contract but this is of course impossible given the very wide range of demands artists and presenters have on an international scale - and made more difficult as artist managers do not act as principals. Similarly, a standard Heads of Terms, although tricky in some legal systems, cannot be boiler-plate wording but if required, needs to be a basic confirmation note between artist/artist manager and presenter. If there are outstanding issues at the point of agreement before the contract arrives, those points should be stated in writing to be dealt with at a later stage rather than left unattended until too late. If this is done, there will be fewer surprises and greater awareness that risk is a mutual concern for all involved.