For an up-and-coming artist, the first person they bring onto the team is usually a friend who believes in the music, and will do his or her best to help the artist however he or she can. That may come in the form of booking shows, advising the artist, etc. Most states in the US allow one to act as both an artist’s manager and booking agent, but New York and California each enacted laws in an attempt to differentiate between the two, with potentially dire consequences for one who, intentionally or not, blurs the lines between the two.
Both California and New York’s laws require that anyone who solicits or procures artistic employment or engagements for artists to obtain a talent agency license. Court rulings have upheld the constitutionality of these laws and reinforced that contracts they enter into may be voided, and they may be required to return some or all of their earned commissions.
However, issues often arise because many artist management contracts contain language that the manager will, for example, “advise, counsel, direct, and coordinate the development of the artist’s career.” Often, the “development of the artist’s career” requires activities that may overlap with those of a talent agent, such as introducing them to new opportunities by reaching out to their other contacts in the industry. This usually involves exploring terms and potentially even negotiating contracts, both of which appear to technically be violations of the New York and California talent agency laws.
Many talent managers have urged California lawmakers to revise the Talent Agent Act (“TAA”) to provide an exception for personal managers, similar to the one provided in the comparable New York statute. Section 171(8) under Article 11 of the New York General Business Law mandates that anyone acting as an agent or procuring employment must obtain a license, just like the TAA. However, Section 171(8) contains an exception for personal managers who procure employment when such procurement is only incidental to the business of managing.
These talent agency laws often come into play in a handful of common scenarios: (a) if the artist-manager relationship has gone south, (b) the artist fires the manager, (c) the manager sues for commissions, and (d) the artist then seeks to void the contract ab initio [from the beginning] and possibly retrieve commissions that the manager has already received.
Talent managers have put up many challenges to the California and New York laws, arguing that they are put at a severe disadvantage. If managers are forced to sue their clients for unpaid commission, the talent can turn around and bring a claim that the manager unlawfully procured employment on their behalf, in violation of the TAA. Unfortunately, both states’ laws have been upheld in court, so it will be up to the states’ legislature to change them. Until then, if you’re an artist manager operating in that grey area, you should obtain a license asap.