Denver Post

APRIL 12,1998



By Eric L. Reiner

Mastering an instrument may be the easy part of becoming a rock 'n' roll star.

The business side of being a professional musician - involving decisions like whether to pay the road crew as employees or consultants, how to deal with the legalities of a band break-up, and whether to audit your record company - is the tough stuff.

"I do not recommend this (a career in music) for anyone who doesn't have what it takes to be a very committed individual. You have to be very committed, because you have to put up with a lot of heartache", says Sean Kelly, leader of The Samples, an Earth-conscious rock band from Boulder.

"The joys are unbelievable - like the mail we get from people; very heart-felt letters - but you have to be tough. Really tough," he says.

Both The Samples and another Colorado-based band, Big Head Todd and the Monsters, can relate plenty of business-side mishaps and horror stories.

Business problems cropped up early for Big Head Todd, one of the most successful local bands, with one album that went platinum, selling more than a million copies.

When the trio began more than a decade ago, each member blithely contracted the band for any booking that came his way, eager to generate revenues for the group.

"Once," recalls the group's drummer Brian Nevin, "we had three gigs booked for one day. Each of us came up to the others and said, 'Hey! I got a gig for us on Friday,'

' "Guess what? I do too.' "

Human resources management clearly was needed.

"So we sat down," says Nevin "and we decided I would book the band. Rob (Squires bassist) would handle the business affairs and Todd (Mohr, guitarist/singer/songwriter) would be the music director. It kind of fell into categories that suited us."

Not long after that, Big Head Todd faced a financial dilemma: Should the band buy its own sound system or continue hiring a sound engineer to supply a system for each performance? Smaller nightclubs were paying the Monsters a couple hundred bucks to perform, and hiring a sound engineer each night cost the band about half that.

Fortunately, the group had squirreled away some money - bassist- turned-businessman Squires had seen to that - and the trio decided to invest in its own sound system, figuring that owning that asset would improve profits down the road.

It did.

"We even started renting out our (sound system) to other bands. It became a source of income.

"I look back and I see that we got where we are because of those kinds of decisions, and I credit Rob Squires for that," says Nevin.

"Having racked up radio hits like "Bittersweet" and "Please Don't Tell Her," Big Head Todd now headlines major concerts - the group plays Red Rocks on June 5, for example - earning thousands per performance.

Taking care of business

There are plenty of other business-side calls.

Touring nationally for weeks at a time necessitates a road crew, and the group has opted to set up its crew as employees.

"We didn't have to go that route, "Nevin says, adding that most group's don't. "A band can hire contract labor for a tour. You need a tour manager, a stage manager - you call the right people and they get you (personnel) just for that tour."

But Big Head Todd's support staff are long-time friends, Nevin says.

"So what we presented to them was instead of paying you the going rate for the two months you're on the road with us, you can make a little less in salary but you'll get paid when you're home for two months before the next tour. You're guaranteed a job, and you'll be given health insurance."

National tours can be costly. Besides bankrolling a crew (Big Head Todd organization has 10 salaried employees) tour-bus costs are roughly $5,000 per week, and per diems for the traveling horde can easily run $40 per person.

Another big expense is recording in state-of-the-art studios. Artists lucky enough to land a recording contract with a major record company like Atlantic, Capitol, RCA or MCA get the label to front the $250,000 to $500,00 required to make a masterful CD.

The artist sees no royalties from album sales until the record company has recouped its advance.

"To get a penny out of a record company, you've got to sell three or four hundred thousand units'," says the manager of a rock group that recorded three major-label CD's during the '80's.

Even with that level of sales, the artist may not see any royalties, because certain other expenses - some legit, some questionable - can get tacked onto the artist's tab with the record company.

"A lot of times when we were with (the label)," says the manager, speaking on condition of anonymity, "I'd ask, "How much is this going to cost?'

And they'd say, 'Don't worry about it. We'll bury it on another artists account."

Other band managers and musicians back up the claims that such practices occur.

Several calls to record companies for comment on how charges are apportioned among artists' accounts were not returned.

Such music-industry accounting practices can cause a band to audit its record company.

"You can get an accounting firm to go in and unravel it all," says the manager, "to audit the record company and roll back a lot of the charges." But an audit can cost a band big money - money it may not have.

Some business problems can spill over from the accounting to the legal side.

Because record production involves substantial sums, a record company may try to escape its contract if sales forecasts are revised downward. The Samples suffered that dealing with MCA Records.

"They didn't want to make a second album with us," says Kelly, "and it was in the contract that they had to."

A brief history: The Samples did one album for MCA in '96. Sales were weak. The MCA-Samples contract called for a second CD. The California record company tried to renege.

"We said, 'You've got an album to make and you're going to make it.' They saw that they could spend $350,000 to make an album to appease us, or cut a deal somewhere in the middle," says Kelly. "So they bought us out."

He said the buyout was enough to pay all the group's debts and leave a little bit for each band member to get through last summer.

MCA confirmed that the Samples are no longer with the record company, but declined further comment.

Changing the contract

But sometimes it's the artist who seeks to change a record contract's terms. Mark Bliesener, who co-manages Big Head Todd, Leftover Salmon and other artists with partner Chuck Morris, says, "It's standard procedure that if you have a big record, you go barrelin' in to the record company with the sales figures and say, 'Look, I'm making you this kind of money. How can you be paying me this little?'

"If tomorrow you become LeAnn Rimes, you go back in and get yourself a better deal - easily generally."

Musicians also renegotiate contracts with their managers.

"The average commission for a personal manager is 15 percent, says Bliesener. "But once an act goes to the mega-level, they get their lawyer to contact their manager right away, saying, "How about we go to 11 percent?'

"And what are you going to do?" shrugs Bliesener, with the music management firm Morris, Bliesener & Associates, of Denver. "If you're smart, you'll look at your books and figure, 'Yeah, I am making a load of money off this artist.

"So you say, 'Let's keep it friendly. How about 10 percent?'

"Theses things get renegotiated at the drop of a hat," Bliesener says.

Survival in the rock biz requires both musical artistry and business acumen. But right down to the end the business side can't be ignored.

For example, when a band member quits, the business side needs to be center stage. That's because things can get messy.

Half of The Samples quit last year. "Business wise, we had to sign a dissolution," says Kelly, the group's guitarist/singer/songwriter. "I made sure we signed that (dissolution) and we signed something with Ted (Guggenheim, former manager) so everyone is clear and free and can go separate ways.

I was very cautious, and I'm very legal," Kelley says, "because I've seen the bad end of that stick."

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