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In my more than twenty years of experience as an entertainment lawyer and professional negotiator, I can't begin to count the number of times I've been asked by my clients "Will you be able to get XYZ from the
other side for me?" - the XYZ could be anything - more money, more creative control or any of the other numerous issues that inevitably come up in negotiations.
My "stock" answer to my clients is usually
the same - "I'm not sure, but I'll try my best to get XYZ for you" - and it's a 100% accurate and honest answer - but I'll let you in on a little secret - I can almost always tell from the very beginning how things
are going to turn out - maybe not all the specifics - but definitely in general - and it's not because I'm psychic or I'm the greatest entertainment lawyer that there ever was (although, believe it not, that's been said to me
by more than one client for whom I've doubled, tripled, quadrupled, etc. the "other side's" initial offer, got the deal done fast, etc.).
The reason I usually am right about the general outcome is because I
know a lot about leverage - what it is and what is isn't - who's got it when, and who doesn't - how to use it for my client's advantage when they've got it - and, perhaps most difficult of all - how to make the best out of a
situation where my client doesn't have much of it.
Assuming both sides in a negotiation each have competent representation (and that's often not necessarily the case - but for the purposes of this article, let's presume
it is...), leverage is not about one side "tricking" the other side.
First of all, in my opinion, negotiations are not a game to be "won" by one side versus the other. If one side could accomplish whatever their goal without the other side and doesn't really need them, why are they even talking - no less bargaining - with them? But if one side actually needs the other side because the other side has otherwise unavailable resources or talent, then compromises may have to be made to get the other side to participate. Hopefully, the final result will be a "win-win" scenario - where each side makes reasonable concessions to the extent necessary to keep the other side happy and motivated so that together, the common goal can be reached.
But even if I am the world's greatest entertainment lawyer, the final result always - and I repeat always - depends primarily on the leverage positions of the parties.
One of the first ways for me to find out
about leverage in a given situation is to ask my clients, "Are you willing to get up and walk away from the bargaining table if the other side refuses to make reasonable compromises or insists on unreasonable
demands?" Of course, what's "reasonable" or "unreasonable" can vary tremendously and a big part of my job is to educate my clients about this for each different situation. But the key question
remains whether my client is willing to "draw a line in the sand" which he or she will not cross.
In the beginning (remember this because, if you bear with me and keep reading, what happens later can be verrrrrry different...because of changes in GUESS WHAT), you may have to make compromises that you would rather not. But, if you are willing to get up and walk away from a "bad deal", you "win" no matter what: either you make "livable" compromises within your personal boundaries and do something that you are reasonably willing to do, or you're not "forced" into doing something that you don't want to do. Either way, you "win".
On the other hand, if my client is so desperate to do any deal no matter what - and particularly if the other side knows it - then my client has little or no leverage and no matter how good I am at what I do for a
living, there's not much that I or anyone else can do....in the beginning....(again, remember, "in the beginning" isn't "later" - forgive me for being repetitive, but please keep reading....).
Since
I represent the corporate side of the equation in certain cases (i.e., record labels, management companies, production companies, etc.) and the artistic side in other cases, I've seen not only how leverage works, but perhaps
more importantly, how it is perceived by both companies and artists.
For instance, the "stock" record company line to a band is "Well, you're pretty good and we're interested, but there's a lot of good bands out there, so you better sign this...and fast....", the not-so-subtle implication being "don't rock the boat" - i.e., don't mess around with their offer too much or for too long, or you'll blow it. What bands don't realize is the amount of leverage they have just because they're unique. Sure, there's a lot of talented people out there looking for the few deals that remain available these days, but if you're an artist remember: there's nobody that's like you, and they're talking to - and even making an offer to - YOU - so you've got something they need and don't have - YOUR TALENT. Of course, if they're the only game in town and they know it - i.e., no one else has made you an offer - they can "put it to" the band by not making concessions. But if there's another company that's interested in you, that puts a whole different spin on things. You'd be amazed at how freaked out some of my corporate clients get when they feel as if they might "lose" a band to a competitor - and, as a result, they make lots of concessions they don't normally make. Of course, it's not easy to get even one company to be interested, no less two or more at the same time.....but this is an example of...GUESS WHAT.
Another example - a manager client comes to me and asks that I prepare and negotiate a contract for an artist that they have been working with for awhile. My client told me they've already spent $25,000 on the
artist, have a record deal on the table for them and have already introduced them to the record label.
Guess who has the leverage here? The manager? Maybe - if he has a strong enough relationship with the label so the band can't pull an "end run" around him. But even if the manager has a "handshake" deal with the artist - under most state laws an oral contract that can't be completely performed in one year or less is not even a contract - so unless that's the deal - one year and that's it (which is hardly ever the case in management deals), the artist can "do" the manager because the manager is "behind the eightball". (Boy I'm full of cliches today, but hey, they work for me...uh oh...there goes another one!). Anyway, the manager's already spent the money, introduced the band to his label contacts, legally HAS NO CONTRACT with the band and can be potentially "zipped out" of the scene by the band. It then falls to the nature of the manager's relationship with the label - and of course, with the band - to be able close ANY deal - no less a fair one - with the band. Indeed, some of my managers have learned to their chagrin that, even though they may be "big shots", the labels make money off the bands - not from managers - so if "push comes to shove", they'll usually go with the bands (although for legal reasons, the companies usually "officially" don't take sides since they could be sued for interfering with the contract between the manager and the band).
A dramatically different example of a similar scenario - but with very different results - occurs when (1) a manager spends a little time hanging out with the band a few times, shows the band what the manager is about
and what he or she can potentially do for them, (2) does NOT introduce them to anybody at labels, etc., (3) does NOT spend any money on the band and (4) before doing anything substantial for the band, says to the band,
"Sign here and then we'll get going". Now who has the leverage?
The manager is offering the band a glimpse - but only a glimpse - of the "magic kingdom", but doesn't let the band in - until they work out the deal first. (next page)
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