Rap Coalition

A HOW-TO RESOURCE FOR RAP ARTISTS, PRODUCERS, & DJs. Since knowledge is power, here is your best defense to succeed in the urban music industry...

Sunday, May 21, 2006

Conflicts Of Interest

There is no other industry on the face of this earth that allows the level of conflict of interest that we have in the music business. There are lawyers who represent artists (and are supposed to be protecting the artists’ interests) in negotiating contracts with record labels, but do overflow work on the side for those same record labels. Many record labels have business affairs departments that are understaffed and farm out excess work to entertainment lawyers. Much of this work represents a steady income for the law firms, yet the artist is often a one time payment for the firm to do a deal. Are the rights of the artist being properly protected for that one time fee or is the attorney thinking about that steady paycheck that is coming into the office on a regular basis adding up to numerous times the amount the artist pays? Most artists don’t even think to ask about the lawyer’s relationship with the label.

Another conflict I have seen repeatedly is an entertainment attorney or a manager who is also an A&R consultant for a record label. Are you an impartial protector of an artist’s rights when you have a relationship or a financial arrangement with the record label? I have seen attorneys in this business with deals at distribution companies do side deals for the artists they represent at the same company. They argue that they know the system from within and have solid relationships that allow the artist to have more than what they’d normally get without the (questionable) relationship. The reality of the situation is that it is all about money and most unethical people will do whatever deal is quickest and brings in the most money regardless of what is given away in exchange. Could this be why there are so few successes in the music business in relation to how many artists are signed every year? If you make a lot of money from one company over a multi-year period or a little bit of money from one person just one time, where is your loyalty going to be? Very few people are strong enough to do what’s right instead of what’s profitable…look at Enron.

Since the beginning of the recorded music industry, record labels have been trying to get close to radio to force their records to be played often. If there is a financial incentive to be close to a radio station, can that label be trusted to stay within legal boundaries and make decisions based on what’s right as opposed to what’s profitable? Doubtful. I am always very suspect of any record label or anyone dependent on radio play who says they are doing things for radio jocks or DJs and asking nothing in return. As someone who runs an artist support organization, how could I remain unbiased if I need something in return from the folks I am helping? Is it ethical to provide a service to a DJ when I know that I need him or her to spin my record to build the career of the artist I represent? Never.

In the urban independent record label world, I see labels every day that are also set up to manage their artists. Some make a feeble attempt at trying to cover the obvious fact that it’s the same company by giving the management company a different name even though it shares office space with the label. There is never a time where the owner of a record label can be impartial enough to manage the artist--this is a HUGE conflict of interest. Sometimes it’s a lack of trust that causes a label to want to be both label and manager, but most of the time it’s pure greed. How can a label, who has a certain financial incentive, also be the manager who has a fiduciary duty to make decisions based on what’s best for the artist? Decisions get made on what’s best for the income of the label as opposed to what’s best for the artist.

This is the only industry of which I know where these flagrant abuses of power are accepted as everyday occurrences. The urban music industry is ripe with conflicts of interest at many levels. Until we clean our own house, and until we stop accepting wolves in sheep’s clothing, we will never be able to have a legitimate industry as opposed to the shark infested shady industry we have today. It would be so nice to finally be able to accept companies at face value and have them actually do what they say they do, as opposed to being the greedy, self-serving cads that they are.


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