No big deal? Reflections on negotiations in the modern music industry

Music industry lawyer Richard Hoare, whose clients include AJ Tracey and Glastonbury Festival, has collaborated with fellow deal-maker Andrew Gummer on Do/Deal, a new book which breaks down the art of negotiation over the course of 11 chapters. The book has been created to be a ready-made toolkit to help artists, managers and the entire industry to approach the negotiating table and navigate the process with “credibility, calm and confidence”, according to the authors. Hoare and Gummer, whose clients include Pink Floyd, have over 50 years of experience in the music industry. The pair open up about their history of doing major label deals and building long-lasting partnerships. With examples including Michael Eavis, Bonobo, Spotify, Richard Antwi, Dave Okumu and even Love Island, the authors aim to show that doing music deals can be a creative and collaborative experience that can build trust towards long-term relationships. Hoare Associates was established five years ago after a decade working at Clintons. Based in Somerset, they maintain a diverse roster that currently includes AJ Tracey, Burial, Bonobo, Kelis, Joel Corry and Glastonbury Festival. Here, Richard Hoare, a graduate of Harvard Business School’s Negotiation Mastery programme, explains why they want to move the discussion on from the stereotypical music business deal-making battleground… In recent years it's been hard to escape the headlines of colossal deals running into hundreds of millions of dollars. Those price tags usually mean a one-time, lump sum for a buyout of all rights and revenues. Often, it may be the last deal the artist ever signs in relation to those rights. In 2020, Spotify reported that over 13,000 artists earned over $50,000 in royalties. Those numbers are no doubt increasing, but we suspect that only a tiny proportion of those artists are likely to sign mega-deals like the ones mentioned above. For the vast majority of artists, we're seeing a trend towards shorter deals, which evolve and develop in step with the artists' careers. Indeed, for many artists and labels, the meaning of the word "deal" itself is undergoing a subtle, but important shift. The focus is shifting away from a noun "the deal", i.e. the thing, the one-time long-lasting transaction, the big advance, etc, and towards the verb “to deal” i.e. how we deal with our partners in the music industry, the living and breathing relationship between the parties, and how that flexes and adapts in changing times. Let’s look at each of these concepts in turn… The Deal Training as a lawyer in the noughties, I had a front row seat with some extraordinary deal-making. The lawyers I trained alongside were acting mainly on the artist side, and at that time the deal was everything. For better or worse, there was a culture of constantly seeking to push the envelope: bigger advances, higher royalties, elusive “two-firm” commitments. At the same time, the labels were increasingly looking to take a stake in the artist’s wider business (the birth of the 360 deal, and labels seeking a share of ancillary income streams such as live and merch). All this looked incredible on paper, and plenty of artists, managers, and lawyers understandably celebrated huge “wins” in securing mega-deals. In reality though, things often didn’t work out so well… Once signed, this focus on capturing all that value early on in an artist’s career, distilling it into a single piece of paper, could become burdensome and risky For the vast majority of artists, we're seeing a trend towards shorter deals, which evolve and develop Richard Hoare Let’s consider this in the context of a big deal from a few years ago. Some lawyers I knew were involved in the renegotiation of a wildly successful band’s new record deal with their long-time label. The artist/lawyer/manager’s perspective was that this was a ground-breaking deal, vast upfront advances, unprecedented royalty rates, heavy commitment to marketing spend and an almost unheard-of short rights period. Speaking to the artist’s team at the time, you’d be forgiven for thinking it was the greatest deal which had ever been done. But let’s also look at it from the other side of the table. Having lunch with the president of the label shortly after the deal was done, he looked haunted. The negotiation had been a bruising affair, the artist team knew that the label would do virtually anything to keep that artist, and as you might imagine, the threat throughout the negotiation (implicitly or explicitly) was that if the deal wasn’t done on terms they were happy with, they would move to a competitor label. The president said whilst he accepted that the artist’s team had every right to demand such extraordinary terms, he feared that doing so may end up being counterproductive: the level of spend which had been committed to was simply terrifying - it meant that unless the next record dramatically exceeded the performance of the previous records (which had all done very well) then the deal would quickly start to look untenable. The real danger to the artist was that the creative freedom and risk taking which had played a part in the success of the records to that point, would quickly become stifled. Worse still, the negotiation being so drastically one-sided (plus the fact that it was carried out against the threat of leaving the label) meant that any trust or spirit of collaboration between label and artist, may have been irreparably damaged. Five or so years on from that negotiation, the artist in question has all but disappeared from the charts. The inventive and lucrative deal which they signed probably offered little consolation. To Deal In the book Do/Deal, it’s this idea of the verb “to deal” which we’re interested in and we explore various case studies which typify a more collaborative and mutual approach to this process. In writing the book we looked at examples such as Bonobo’s long and successful collaboration with Ninja Tune, where historically the deals themselves have been fairly short and sweet, but the relationship has developed and grown over six albums. None of this means that huge deals don’t still have their place in the modern music industry Richard Hoare We also look at how Glastonbury Festival (which measures many of its important relationships in decades, not in years) adopts a long-term collaborative approach, and certainly can’t be characterised or defined by any single big deal. Finally we look outside of the music industry to a 350-year-old family-run business, which retains customers not just for decades, but for generations. These examples are not only undeniable success stories, but are also founded on principles of more sustainable relationships, and mutual respect. Typical characteristics which we find in these types of relationships might include much shorter exclusivity periods, relatively lower upfront spend, and considerably more focus on balancing the respective rights and obligations of the two parties. Conclusion None of this means that huge deals don’t still have their place in the modern music industry. The kind of catalogue acquisition deals mentioned at the top of this piece will always command a giant price tag – but in those instances, the “work” has already been done and we’re often not as concerned about an artist’s ongoing output. Similarly, creating long-term partnerships which help build the household names of tomorrow, will often require heavy upfront investment, and it’s natural to expect a long-term commitment from both parties when large sums are involved. But it feels like we have moved on from a time when the default goal should be getting “the best deal” (whatever that might mean) and that we are now at a point where “how we deal” with our partners, day by day, record by record, is increasingly becoming the primary focus. Do/Deal - Negotiate better. Find hidden value. Enrich relationships by Richard Hoare & Andrew Gummer is published by Do Books Out now £9.99 paperback original (£5.99 ebook)

A bad rap: Why labels need to support freedom of expression for UK hip-hop

Music Week’s cover star Digga D has just achieved a No.1 album, but the UK rap star has faced legal challenges to his career including a Criminal Behaviour Order, following criminal convictions and spells in prison. Here, in a joint opinion piece exclusively for Music Week, barrister and Black Music Coalition chair Sheryl Nwosu and fellow lawyer Nick Eziefula take a closer look at the sanctions faced by the UK rap community and call for a greater understanding from the industry… Stars in the US have recently united in support of proposed legislation to prevent lyrics being admissible in court cases, except where there is a clear link between the lyrics and a crime. Their support for the legislation is twofold: they claim the proposed legislation is both fundamental to freedom of expression and to addressing systemic racism in the criminal justice system. The issue is not unique to the US. In recent years, UK drill music, undoubtedly a growing sub-genre of UK rap, has increasingly been used in the courtroom as evidence of bad character, with the prosecution engaging police officers who are notably not drill “experts” to decode slang-heavy lyrics for the court. In some cases, the videos presented as evidence of gang involvement and violent disposition pre-date the alleged offence by several years. The scrutiny of drill lyrics might be seen as the latest development in a concerning trend, but such scrutiny has a long history when one looks at the way in which rap music and its various sub-genres have been treated in the UK. Over many years, UK Black music artists have been targeted by the police. As far back as 2005, prosecutors sought to use lyrics from So Solid Crew’s music to suggest a predilection for violence and the use of guns in a murder trial involving group member Megaman. At a time when the media appeared keen to synonymise the group’s name with violence, So Solid Crew’s tours were apparently shut down. UK rapper Giggs reportedly claims police pressured record label XL not to sign him. Form 696 was frequently used to block Black music events from taking place. And more recently, drill star Unknown T was accused, and later acquitted, of murder. Over many years, UK Black music artists have been targeted by the police Sheryl Nwosu & Nick Eziefula Are lyrics which reference violence simply observations of real life, dramatised or exaggerated for entertainment? Or should they be seen as potentially documenting an intention or history of violence, or disposition towards real-life criminal activity by the artist? The approach taken by the justice system seems inconsistent and divided down clear racial lines: controversial lyrics of white artists in other genres of music have seldom been used in criminal proceedings. English law already provides safeguards against the automatic admission of such material – evidence must pass the relevance test and, if appropriate, the Bad Character considerations within the Criminal Justice Act 2003. But it can be questioned whether the use of music, rap lyrics and videos in criminal cases is an extension of the way that Black males in particular are hyper-policed in the UK; their activities are consistently viewed through a lens of suspected criminality, which is starkly highlighted by the very act of those activities being presented within the setting of criminal trials. It’s our observation that the negative view of Black art and expression is primarily rooted in fear, and a lack of understanding or acceptance that for many the music under scrutiny is an expression of just one part of inner city life, all the while not necessarily being autobiographical to the artists. It is this fear, as well as a lack of nuanced understanding of artists’ backgrounds, lives and also musical influences, all of which provide the context of some rap and drill music, which can lead to prejudicial judgements being made by judges and juries in courtrooms. It has to be remembered that the primary device of this music is entertainment of the wanting audience. How does this affect the prospects of Black artists in the music industry? Even when lyrics are not admitted to the courtroom as a resource for the prosecution, the creative output of Black musicians is also being monitored and censored using Criminal Behaviour Orders (CBO), with Digga D being a well-known example. The scope of CBOs is wide-ranging and can include restrictions as to who an artist may be in company with, with music videos being scrutinised to ensure compliance, to restrictions upon the geographical areas they can verbally reference in their lyrics. As a result, drill artists can find themselves operating within a complex matrix of limitations. Horrid1, another drill artist, revealed in an interview that he had been recalled to prison for commenting on an Instagram post of Digga D’s, in breach of a prohibition on associating with the rapper. Whilst the CPS has recently announced that it will be reviewing and updating its guidance on the use of drill music as evidence in trials, following concerns voiced by legal professionals, academics and youth groups, it still remains that many Black musicians looking to forge successful careers face unique challenges both within the industry and also externally with added scrutiny applied to their art. The association of rap, and drill music in particular, with so-called “gang culture” - that term itself being extremely loaded - means that record labels and other music industry organisations may become more wary of investing in rappers than artists in other genres. This already presents as a possible area of racially-based prejudice against artists who are already signed and those trying to get signed. To counter this, we actively advise that labels and other people working with artists ought to become more aware of the circumstances in which any artists may find themselves at the scrutiny of the criminal justice system because of their musical content, music videos, or even their personal associations with areas or people and how to actively manage this as part of their involvement and relationship with any given artist. In our experience, Black musicians are some of the most driven and visionary entrepreneurs – every bit as talented as the tech innovators and global advertising agencies we work with. In the already tough music business, they face the added challenges of negative stereotypes and underrepresentation. Their breakthrough success provides inspiration and opportunity, both to their communities and to the industry as a whole. To ensure their long-standing success, the industry needs to be reactive, responsive and, dare we say it, supportive of the real-life pressures that can face Black artists in particular, such as the hyper-scrutiny of their words, their output, their Black lives and effectively their art. Subscribers can click here to read our interview with Digga D and his team. Our cover feature with the Black Music Coalition is here. Sheryl Nwosu is a barrister at 25 Bedford Row chambers, and chair of the Black Music Coalition (BMC). She provides talks and advice to labels about artists, music and the criminal justice system. Nick Eziefula is a partner at Simkins, a leading media & entertainment law firm. He specialises in commercial contracts and intellectual property. He also has a background as a rapper, releasing several studio albums and touring internationally. Simkins and the BMC are both supporters of Power Up, which supports Black music creators and industry professionals and addresses anti-Black racism and racial disparities in the music sector.

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