California's Talent Agency Act: Time to Get Real - Antiquated Regulation and the 21st Century
"We cannot solve our problems with the same thinking that created them...'"
By Reena Sehgal, Esq.
Glitz. Glamor. Fame. Fortune. Red carpets. That is what Hollywood is all about, right? Wrong. The reality is that Hollywood is an impersonal, uncaring, and unforgiving place. Today’s average American consumer arguably knows more about the lives of the Kardashians and Justin Bieber than the presidential election. What the public doesn’t concern themselves with are the industry players who help catapult entertainers to great levels of fame.
To navigate the harsh reality of the entertainment industry, artists seek the sophisticated assistance of third party representatives, specifically agents and managers, to aid in locating employment opportunities and developing a career.[2] Historically, these industry players have engaged in unscrupulous business practices in an effort to thrust their artists into the limelight.[3] In an effort to quell such behavior, California legislature enacted the Talent Agencies Act (“TAA” or “the Act”).[4]
The Act establishes and relies on a bifurcated system, where an artist’s employment procurement efforts are relegated exclusively to licensed agents, leaving managers to handle all other aspects of an artist’s career.[5] Unfortunately, in today’s entertainment industry, such a black-and-white occupational distinction simply does not exist.[6] In fact, the Act turns a blind eye to one key industry reality: talent agents have no interest in signing unseasoned artists, but without the talent agent there is no legal way for the artist to procure employment to establish a reputation.[7]
leaves personal managers to face the difficult dilemma of violating the Act by procuring employment, and thus jeopardizing their contract with the artist due to the illegal procurement, or acquiring agency licensing and subjecting themselves to regulation and fees.[8] As managers typically advance a significant amount of time, money, and effort for their new artists with the ultimate desire of obtaining a return on their investment, they often opt to procure employment.[9] Sadly, artists use this situation to their advantage – first retaining management in their early years to procure employment and obtain an agent, and then utilizing the Act to disavow their management contracts.[10]
The distinction between agents and managers is further blurred when these representatives opt to forgo their commission in lieu of producer credits or engage in packaging deals.[11] These manager-producer and agent-producer roles create significant conflict-of-interest concerns.[12] Though guild regulation on production and distribution currently exists, failed negotiations between agencies, managers, guilds and unions can render such regulation obsolete and ultimately leave artists without protection.[13] In addition to these problems, the 1986 revision of the TAA did not foresee the impact of technological advancement on the entertainment industry. With the advent of the internet, the rise of illegal file sharing, and resulting decline in physical music sale, the music industry has scrambled for new ways to generate revenue.[14] As a means to recoup their losses, the industry has begun to engage in multiple rights agreements, better known as 360 deals.[15] Under such agreements, the record label becomes, in essence, a personal manager by investing in an artist’s brand and developing their act by providing business and administrative support and guidance.[16] Unfortunately, by essentially becoming personal managers, the record label also then faces the unfortunate dilemma of having to violate the Act.
This note exposes the inapplicability of the TAA given the twenty-first century entertainment industry landscape. Part II defines the industry roles of talent agents and personal managers and introduces the dispute between the two representatives. Part III discusses the history of the TAA and introduces the Act’s fundamental provisions. Part IV describes the diverse roles of industry players as they exist today, and exposes how the TAA is no longer adequate in light of the evolved industry.
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[1] Todd Maclean, Global Chorus: 365 Voices on the Future of the Planet 125 (Todd Maclean Ed., 2014) (“To paraphrase the great Albert Einstein, we cannot solve our problems with the same thinking that created them in the first place.”)
[2] David Zelenski, Note, Talent Agents, Personal Managers, and Their conflicts in the new Hollywood, 76 S. Cal. L. Rev. 979, 979 (2003).
[3] Erick Flores, Note, “That’s a Wrap! (Or is it?)”: The Unanswered Question of Severability Under California’s Talent Agencies Act After Marathon Entertainment, Inc. v. Blasi, 97 Geo. L.J. 1333, 1334 (2009).
[4] Marathon Entm’t, Inc. v. Blasi, 174 P.3d 741, 746 (Cal. 2008)
[5] 1 Thomas D. Selz, Melvin Simensky, Patricia Acton & Robert Lind, Entertainment Law 3d: Legal Concepts and Business Practice § 8:7 (Westlaw 2014).
[6] Heath B. Zarin, Note, The California Controversy Over Procuring Employment: A Case For The Personal Managers Act, 7 Fordham Intell. Prop. Media & Ent. 927, 929 (1997).
[7] Gregory Albert, Note, Taking Away An Artist’s “Get Out of Jail Free” Card: Making Changes and Applying Basic Conract Principles to California’s Talent Agencies Act, 8 Pierce L. Rev. 383, 384 (2010).
[8] James M. O’Brian III, Comment, Regulation of Attorneys Under California’s Talent Agencies Act: A Tautological Approach To Protecting Artists, 80 Cal. L. Rev. 471, 484 (1992).
[9] Albert, supra note 7, at 384.
[10] Id.
[11] See infra Part V.
[12] Amy Wallace, Hollywood Agents Lose the Throne, latimes.com (Dec. 11, 1998) available at http://articles.latimes.com/1998/dec/11/news/mn-52950
[13] See e.g. Former SAG Agency Relations Unpates, sagaftra.org, http://www.sagaftra.org/sag-agency-relations-updates (last visited April 26, 2015).
[14] Mark Kesten, Article, Collateral Damage: Will The 360 Deal Be the Next Victim of California’s Talent Agencies Act, 43 Sw. L. Rev. 397, 398. (2014).
[15] See Jeff Leeds, The New Deal: Band as Brand, N.Y. Times, Nov. 11, 2007, Section 2 (Arts & Leisure), at 1, available at http://www.nytimes.com/2007/11/11/arts/music/11leed.html (“Like many innovations, these deals were born of desperation; after experiencing the financial havoc unleased by years of slipping CD sales, music companies started viewing the ancillary income from artists as a potential new source of cash.”).
[16] Id.