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…
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
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.
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
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.
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)