An Insert Preview - Music Superstar Ethics: How Completely You Can Sell “You can say what you say, but you are what you are.” Jay-Zzzzus!

This post provides a partial preview of a much longer piece that is in the works, but I think you will find that the preview stands well on its own. And it’s topical.

As I indicated in my last post (See: Monday, February 28, 2011, Private Sector Croynism Seeks to Replace Government in Wisconsin: Might New York Be Leading the Way?) I am involved in writing something time-consuming right now. What I am working on involves the admittedly idiosyncratic and ongoing augmentations I am making to an earlier post: Adding A few More Off Topic Notes (Or Are They Really?).

Those of you who are following the ongoing additions to A few More Off Topic Notes have doubtless figured out that the post meditates about the performance of music and how it interrelates the shape of the city. (Also, if you are keeping track you’ll be aware of some upcoming live performance’s that come with a Noticing New York recommendation:

Shepley Metcalf’s Fran Landesman show at the Metropolitan Room (two more performances this March):

Something Irresistible: New Songs by Fran Landesman
Music Director Ron Roy on piano
Chris Rathbun on bass, Gene Roma on drums
Sat March 19 at 7:00 pm
Sun March 20 at 4 pm

And Red Molly (with Pat Wictor) at the next First Acoustics event:

Red Molly
with Pat Wictor
March 19, 2011
All seats $30.00)

The preview that follows is only part of a much longer insert (I do mean much longer) I am working on. The insert will be placed just after the discussion of the Christina Milian copyright infringement lawsuit. That will lead into a discussion about copyright, music licensing rights, performer relationships with the community and then readers will find themselves reading this section about Jay-Z and the ethics of music superstar megadeals. . . .

Happy reading. . . .

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360 Degree Contracts

These days methods of making money in the music industry are in a state of flux and there are more ways to make money from music and its performance than from just the sale of the music alone. For instance, touring, appearance and merchandising fees are becoming much more important sources of income for artists. That’s probably a good jumping off place to start talking about what in the industry are known as “360 Deals.”

What are 360 Deals? Here’s an article to refer to: You Ask, We Answer: What Exactly Is A 360 Deal? November 24, 2010, by Tom Cole.

Also the image below makes things pretty clear:


(From: Tuesday, July 27, 2010, Music Publishers And The 360 Deal, Posted by Bobby Owsinski.)

Ergo, writes Mr. Cole, a 360 degree deal is:

. . . usually a deal with a record company in which the record company also participates in the income of all of the other aspects of the artist's work, such as songwriting and merchandise, in addition to making money off the records."

But Cole points out that deals are often individually tailored to include most rights while excluding some others so that, according to Glenn Peoples, Senior Editorial Analyst for Billboard magazine, “most deals are about 270, maximum.”

Corporations Picking Up on Shifting Revenues in the Industry

360 degree deals are picking up money from where it is shifting to in the industry. Cole notes that plummeting record sales are “half what they were a decade ago” while a recent earnings statements for Warner Music Group reported that non-traditional income accounted for “13% of revenue in its most recent quarter and 10% for the full year” when a few years ago it was “nothing.”

What Kind Of Grab?

Cole’s article reviews whether the deals are good for artists. With other sources of income becoming more important and “a bigger part of a record label's pie,” Peoples says these deals reapportion things so that the record companies are “taking revenue from artists. So, it's been called a land grab” (this is ironic phrasing considering what we will be discussing in a moment).

Quoting alternative industry experts, Cole’s article informs us of two things that seem almost contradictory: Danny Goldberg of Gold Village Entertainment representing 15 artists tells us that these “multi-rights deals” are rarely to the performer’s advantage (except perhaps in country music and overseas) but Peoples says that “in the U.S., multi-rights deals are standard now.”

Getting to the Grassroots of the Question

Whether these deals are good for artists depends on what kind of artist you are and how you are getting your publicity. Goldberg informs us that “the power of alternative media, touring and the Internet work to a smaller rock band's advantage.” According to Goldberg, such deals don’t make any sense for “most of the people I represent . . . .because they already make enough money live.” (Hmm, we are back to live music again.)

The question essentially comes to whether an artist wants to build a fan base from the top down or from the ground up. In other words, if you have a band that is being built up grassroots style via its relationship with the community it doesn’t make sense. Such a multi-rights deal might make sense, however, if you are what is described as a “baby band” where the hope is to have all the band’s popularity spring full blown by virtue of the record company’s promotion. (Does that sound reminiscent of the earlier discussion concerning the shortcomings of industry-created bands like the Monkees?)

Superstars Like Madonna and Jay-Z

Multi-rights deals are also being entered into- and this is very different- not only by people who want to be transformed overnight into stars by the publicity machines of record companies (or concert promoters) but by those performers who are already superstars, like Madonna and Jay-Z:

The first 360 or multi-rights deals that gained wide attention were not between artists and record labels but between performers and the giant concert promoter Live Nation. Madonna signed a 360 deal with Live Nation in 2007 that landed the performer a reported $120 million over 10 years and gave Live Nation a share of her touring revenue — but no money from recorded music. The following year, Jay-Z signed a deal with the concert promoter worth roughly $150 million over ten years.

(There’s been earlier Noticing New York coverage of Jay-Z, including how his signature Yankee baseball cap associates with a crime wave. In a just a moment we’ll be dealing with Jay-Z again in more detail.)

Trapped By What You Sign

But whether you are a baby band aspirationally seeking shortcuts to the top or already a superstar, you better be careful what you sign. Peoples describes the difference between what he calls “active” and “passive” deals. If you are going to sign away all your rights you want an “active” deal “where the music company owns a promoter or a merchandise company and is actually actively working the rights for those artists and taking a cut.” A passive multi-rights deal is essentially a trap, the “label could just take the money even though they're not providing any value” by providing publicity.

Active deals can still have their own set of traps to avoid, and here we are going beyond what the Cole article had to say. Why do you have to be careful what you sign? All those active obligations can run a lot of ways and cover a lot of things. For instance, when the corporations promote you that means you might have to appear somewhere. Just where that might be we’ll talk about in a minute. When all is said and done, if you sell too much, will you still own your soul?

Superstar in a Constellation of Lies

This Noticing New York discussion of the city-shaping aspects of music and the structure of the music industry could not be complete without discussing the city-shaping-size political scandals in which Jay-Z has been involved, Atlantic Yards and Aqueduct Raceway. Perhaps in these scandals we see the effect that 360 degree multi-rights deals can have in shaping our cities. It is easiest to see what this means in the case of Atlantic Yards. Through his appearances at strategic events Jay-Z has been giving cover to a ruthless developer’s abusive land-grabbing* seizures of private property in brownstone Brooklyn, whereby that developer is seeking to quash competition and alternative community development with 50 acres of high-density mega-monopoly. Thirty of those acres are contiguous acreage found at the Atlantic Yards site, the rest of them closely linked and sitting over the same ganglia of converging key Brooklyn subway lines. With Jay-Z’s help, the developer has been selling this project based on an outrageous constellation of falsehoods.

(* probably not exactly what Peoples meant when he referred to 360 degree contracts `land grabbing’ above.)

What Is Jay-Z?

“You can say what you say, but you are what you are.” This philosophical remark about how you conduct yourself in life is regularly attributed to Jay-Z by Tavis Smiley and a list of others.

OK, if that’s Jay’Z’s own quote then we clearly know what he `can say,’ but what actually IS Jay-Z if he’s involved with such scandals? Well, maybe with a 360 degree multi-rights contract you don’t know until you read all the fine print in the contract. Might we presume Jay-Z didn’t get himself involved in these scandals? What if, instead, it was his promoters that got him involved.? What if Jay-Z’s contract said for him to show up so Jay-Z just did? Who knows whether the particular contracts he signed allow him to still say what he wants to say but the real question is whether he still gets to be who he would otherwise choose to be.

Let’s slow down a minute. It is probably too fanciful to speculate that Jay-Z’s original multi-rights contracts got him into these messes. Nevertheless, Jay-Z, by this point, may, indeed, be constrained on matters like Atlantic Yards by other contracts he has entered. In style, content, even business approach and philosophy, those contracts’ clauses and obligations may actually have a lot in common with the kind of thing he was signing onto with a 360 degree deal. (Some other perspectives are available here.)

If Jay-Z is already under contractual constraint does that mean, game over?; that questions about `doing the right thing’ are now out of bounds? We’ll consider a conclusive answer on this involving Natalie Portman before we leave this subject. First let’s review some of the ethical basics.

Who Cares Who Pays the Piper? Jay-Z’s Wife, Beyoncé?

When it comes to living up to the standards of “You can say what you say, but you are what you are,” does it matter for whom you perform and who pays the piper?

Well, if you go by what (former) New York Times ethicist Randy Cohen says, it looks like we have an answer, and Mr. Cohen was willing to provide it for Jay-Z’s super-celebrity wife, Beyoncé Knowles on a recent broadcast of WNYC’s “Soundcheck.” (See: Soundcheck, Qaddafi's Entertainers, Thursday, March 03, 2011 and Qaddafi and Pop, Thursday, March 03, 2011.)

Beginning with Beyoncé rapping about wanting to be “shown the money,” the Soundcheck episode addresses a recently-in-the-news Wikileaks disclosure that Beyoncé is privileged to be amongst a small elite of top entertainers to be paid large sums of money to perform for the family of Libyan Dictator Muammar Gaddafi (alternate spelling used by the Times: Qaddafi).

The Facts:

Beyoncé performed for, and was paid by, members of the Gaddafi clan New Year’s Eve 2009 in St. Barts in the Caribbean. The exact amount Beyoncé received hasn’t been confirmed but, by extrapolation from what other performers received, it is believed that Beyoncé received an amount equal to, or exceeding, the $1 million that Mariah Carey received for similar services. (See: WikiLeaks Cables Detail Qaddafi Family’s Exploits, by Scott Shane, February 22, 2011, Mariah Carey, Nelly Furtado ‘embarrassed’ over Gaddafi performances, March 3, 2011, and Mariah, Beyoncé, Usher Face Calls to Donate Qaddafi Money to Charity, by Steve Knopper, February 28, 2011) Beyoncé (not giving details of pertinent amounts) recently publicized that she donated “all” of the money she received to earthquake relief efforts in Haiti in after she learned the promoter had links to Gaddafi. If you parse things to try to determine the matter from Beyoncé’s own admissions it is difficult to determine whether Beyoncé knew who she was going to be performing for when she was contractually committing herself, but it is quite unlikely that she actually went to her performance without being conscious of who she was performing for. In the Soundcheck episode Rolling Stone journalist Steve Knopper provided the facts.

The Ethical Analysis:

Ethicist Randy Cohen started by disparaging the ethical standards of the music industry in general. Mr. Cohen cleared up the applicable ethical issues with a number of definitive pronouncements:

1. The imprimatur given by our own governments' dealing with objectionable individuals does not cleanse the unethical act because governments, especially when you look, cannot be assumed to be behaving ethnically. “You have to make these decisions for yourself.”

2. “You as a million-dollar-commanding pop star have a great deal to say about who you give your services to. You have the luxury. You have the option. . . . not to give aid and comfort to a man who has done terrible things. . . You had every reason to know that this was a horrible, horrible regime. Is that what you want to use your talent for?”

3. “Donating the proceeds to charity does not cleanse you. An act that is wrong in itself remains wrong even if you do something virtuous later in the day. . . You still did wrong for taking it.”

4. While it may not cleanse a bad act, penance is possible for which you may get “partial credit” if you give away the money and acknowledge that you did something wrong, especially if you give the money to the victims of the bad person from whom you took the money. The closer you can come to giving the money to an organization that is determined to do work in this respect the better.

5. “There are two misdeeds here. One is being a court jester for Nero. The other thing is profiting from it. So giving away the money clears you of one of those wrongs but not the other.”

6. Even if Beyoncé had done it for free she still should not have done it. “There are certain people you just do not offer your talents to.”

7. “This ignorance defense is insulting to pop stars: `You are not evil; You’re stupid’ Some defense!”. . . “When someone is writing you a check for $1 million for one performance: Ask! That’s not demanding too much from any pop star. It’s not like Gaddafi [or Ratner] is obscure. He’s as big in the ruthless tyrant game as Mariah Carey is in the bland pop music game.” “It is possible to be fooled and there are certainly grey areas” but naiveté can just be a convenient and self-serving excuse to take the money and often things are pretty clear-cut evils. You might not have known but you realize when you get to the party.

8. Once there is an “organized boycott” the “stakes go way up” “to go against that is reprehensible.” [No organized boycott had been put in place with respect to Gaddafi.]

Radio listeners phoned in to the show and also provided comments on the Soundcheck website that you can read if you go there. You can even still add your own. But before you do, read on to consider how inextricably ingrained this kind of alleged misconduct purportedly is when you are in the high-paid pop star business.

Ingrained Against the Grain Conduct?

A more recent NPR report on Beyoncé’s problems makes it sound as if big pop stars routinely structure their business operations so as to be virtually deprived of the economic option to do the right thing, notwithstanding Randy Cohen’s carefully parsed qualms about ethical conduct. (See: Pop Stars, Private Shows And Political Consequences, March 8, 2011, by Zoe Chace and Jacob Ganz.)

This NPR report looks like it is the result of an effort at damage control by people in the music industry, people perhaps connected to the stars now being exposed. It doesn’t look like successful damage control; it seems to sort of backfire. (Note: if you listen, the on-air story- which begins, “This is a place you will probably never be. . . Beyoncé is on stage in a black leotard performing her chart-topping songs with the kind of production you expect at Madison Square Garden. . .”- is edited differently from the text found on the website quoted below.)

According to the NPR story, a crucial 10 to 20% of stars’ revenue comes from gigs like these and that the agencies representing the stars usually have entire departments set up to handle them. To wit:

3) It's a storied part of the business.

The agencies who represent these stars usually have an entire department devoted to booking gigs like these. It's part of the business model. You don't do that business, your agency won't make money. This is the commodity that department is selling: access. They provide access to the stars that only the ridiculously wealthy can afford. Ray Waddell, who covers live entertainment for Billboard magazine, says, of the stars who perform at gigs like these: "They come to count on it. It can be 10 to 20% of their touring revenue." . . . . As we've explored on this blog before, pop artists are increasingly reliant on big, highly produced shows to make money. Those shows are very expensive. They need gigs like this to supplement the fireworks their fans expect.

Moral qualms and “pangs of conscience” are assertedly factored into the equation. The stars’ scruples are bought and paid for, signed, sealed and delivered as part of the deal and part of its price:

. . . "It's inherent in these situations that the act doesn't want to do it," industry analyst Bob Lefsetz says. "So the person who has the gig always overpays. The question is, how much do I have to pay you so you will overlook your inhibitions and say yes."

But what may mitigate whether you can sleep at night with a disquieted conscience is the fact that it is all over so quickly and painlessly, almost as if you weren’t there for the secret performances at all:

"Usually they send a private plane, you perform for an hour, you get paid a million dollars, you can be back in your bed that evening," Lefsetz says.

What is this story’s take on whether Beyoncé knew what she was doing?

Did Beyonce and Mariah Carey and everyone else know Gadhafi’s son was footing the bill? It's hard to imagine that they didn't. The venue is small, and the Gadhafis have a notorious history of throwing ridiculous parties like the one Beyonce headlined.

Buried in all the bad news of this NPR story article is one smidgen of hope. Not all stars are indiscriminate in their moral choices:

. . . musicians are essentially forced to set their own standards. Some bands won't do shows for beer companies or tobacco.

Now, keeping things in perspective, Bruce Ratner is probably as bad or worse than a tobacco company and not as bad as Gaddafi or his sons.

Truly Giving Back to The Community?

Here’s something to wonder: Given what is depicted above about how these shows subsidize the stars’ overall operations and are a part of the economic model that keeps the supporting agencies in business, do you imagine that Beyoncé returned the entire $1 million (or plus) fee, or would you like to join in the suspicion that what she sent to charity was net after what was required to support her operations? No figures have been given so we don’t know.

Necessarily Becoming A Party to a Realization

When it comes to Jay-Z and Beyoncé, can they claim ignorance with respect to the Atlantic Yards scandals? I keep thinking about Randy Cohen’s statement that you can be fooled, naive, confused, or just plain stupid (and therefore have been excusably ignorant for a time) but, as he says, you realize when you get to the party. Jay-Z and Beyoncé were both doing pop star duty by being on display at Forest City Ratner’s March 9, 2010 ground breaking for the Atlantic Yards basketball arena. I think, that’s the party at which they should have realized (if not before). The groundbreaking ceremonies were partially drowned out by the neighborhood demonstrators (I was among them) although the police were doing everything they could to keep those demonstrators back and to keep them as quiet as they legally could.

Jay-Z and Beyoncé can hardly still claim ignorance of the issues. They went to the party. They must have realized what was going on.

Portman Important

And are you morally cleansed if you are already locked in by your pre-existing contracts? No. If the offense is great enough pre-existing contracts don’t have to matter. Case in point: Natalie Portman, who just won the Oscar for Best Actress, likely helped precipitate the firing of star designer John Galliano from the House of Dior when she stated she was refusing to be associated with him due to his antisemitic rant in Paris notwithstanding that she had already signed a deal to represent Dior’s perfume:

Natalie Portman, who recently signed a deal to represent Miss Dior Cherie perfume, said Monday: ““I am deeply shocked and disgusted by the video of John Galliano’s comments that surfaced today. In light of this video, and as an individual who is proud to be Jewish, I will not be associated with Mr. Galliano in any way.”

(See: John Galliano Fired From Dior, March 8, 2011, by Rebecca Leffler.)

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From this point on the Noticing New York article still being written continues with a further discussion of the effects of copyright laws on the structure of urban environments. (To be continued in future posts.)