Sound and Cogent Council from Louis Tertocha, Esq.:  The 3 P’s and 4 C’s

I would like to take the opportunity to thank Louis Tertocha for taking time out of his busy schedule to speak with me.  The trajectory of this conversation centered on important considerations for the emerging artist who is considering formalizing his business structure.  Specifically, we discussed legal and financial issues.  I trust this writing may prove of service to all who read it and welcome any comments, observations, and critiques that you may want to share. 

After my conversation with Mr. Tertocha he was kind enough to send me an email with yet more coaching for the emerging artists and entrepreneur.  I thought to myself at that first reading that despite the ease with which one can look at the world of entertainment and business with caution, there is still something magical about the experience.  When this people in this industry give that little bit extra the horizon is endless and the wonders waiting around each corner only increase.  And so Louis Tertocha is on point when he writes to me the following personal communication on June 13, 2012.  I have added my own observations to these as well: 

·         Persevere through the challenges and obstacles.  To my mind obstacles are merely opportunities revealed.  Obstacles provide the creative mind with the fuel to overcome.  If it were easy everyone would take this bizarre and beautiful journey.

·         Patience is a virtue, both with yourself and others.  Things usually don’t happen on your schedule.  The opportunities will reveal themselves if you watch, learn, listen, and adjust.

·         Professionalism is what you should always practice.  It is hard sometimes to maintain a cool posture when you are pursuing your vision.  Engage mind before speaking and writing.  Consider that every professional you deal with is also dedicated to their vision and so subject to the many frustrations that arise.  Cool down.  Assess the situation and then speak.  Take your lessons from Abraham Lincoln who always waited for a bit of time before sending out his mail or meeting with his generals and advisors.  Once the word is written or spoken it will never be entirely forgotten.  Hastiness can permanently damage you professional reputation—your branding will suffer.  Read those last four words over and over.  They are very important.

  

Pay attention and do your research on what Louis calls the 4 C's

Copyright: Make sure all your Intellectual Property is properly copyrighted and trademarked prior to start up and/or roll out. The official copyright website is extremely helpful in providing the emerging artist with wealth of detailed information relevant to emerging talent and entrepreneurs. The SBA is also a good site that assists in many if not all areas of starting a new business. Their website is http://www.sba.gov/content/business-plan-executive-summary.

Cash: Where is the money coming from, how much is needed, what will it cost you, and how quickly will you have to pay it back? Consider how much you are personally able to invest. What is your comfort level? Understand that the first profits will typically be captured for the purposes of paying back any borrowed money. Consider this when agreeing to investment commitments.   Remember that you will need shelter, food, and cash to live during the financially challenges period of time for any emerging project.

Creative Control: As an artist and businessperson you want to maintain as much creative control as possible. If the investor offers to enter the business as a partner make sure that you have at least controlling interest (51% or more.

Credits: What is your current placement in the industry? If you are an emerging company then carefully consider what sort of promotion and marketing you will do to improve that status and—as importantly—how much will it cost.  The term ‘credits’ also brings the financial side of things to mine.  Check out your credit rating.  If it is good then make it better.  If it is poor then do everything legally possible to improve it.  Even if your credit rating is not the best, if you can show quantifiable improvement to the investors you will have at least done significant damage control.

And I would suggest a 5^th spoke to this wheel, another branch on the tree:  Branding.   I believe that by carefully considering and following the advice that Louis so generously offered me the never-ending process of branding with integrity will grow organically.  It’s about listening, learning, adapting, and—yes—sharing.

Read all you can about such areas as prospectus, budget creation and allocation, copyright and trademark law (including intellectual property) and security laws. A security lawyers paid legal advice is the wise move.

In regard to hiring a lawyer and/or accountant, begin with a fee based hourly arrangement. This could cost anywhere from $200 and up. There are some organizations that assist and advise with no fee. One such organization is Voluntary Lawyers for the Arts (VLA). They can be reached at http://www.vlany.org/. This organization offers a wide range of services to detailed to elaborate in this blog.  Louis reaffirmed what Ms. Cassie Willard told me.  Go to conferences and any workshops that can provide you guidance. 

When you have a solid and thorough business plan you are ready to start finding investors and lawyers. In regard to finding either lawyer or accountant who is willing to negotiate a discounted fee on their service in return for a ROI on your project once it is financially successful. This is not written in stone by any means. However, it is a possibility. What seems to be the general rule is that few if any professional lawyers or accountants—or any other team member for that matter—is going to work without some sort of up-front remuneration.

Mr. Tertocha suggested a reading of Mr. Donald Passman's book “All You Need to Know About the Music Business. This book is currently in its 6th edition. Both Mr. Tertocho and myself have read this book and recommend it for the emerging artist.  Specifically, we briefly discussed the first chapter of this book.  For more information about Mr. Passman please visit his official website at http://www.donpassman.com/.

Louis further suggests that emerging talent looking to start their business entity look carefully at 'all' aspects of a business structure. I would add to that by stating a good look at successful individuals and groups should be studied. In the research for my company (CabaretSolstice), I have studied the unique approaches of artists who have made good without benefit of a large label. In my opinion, the view from the mountaintop for big labels has been seriously challenged.  I suggest one consider the success of bands like Radiohead and Public Image Ltd.   With advice like the 'P's' and 'C's' of Louis Tertocha, perhaps a spirit of collaboration between the giants and the emerging entrepreneur may be on the horizon.  Louis demonstrated to me that knowledge is power.  Don’t dismiss anyone or any entity as non-essential.  Rather understand their position and their pain before you meet with them.

Mr. Louis Tertocha, Esq. discussed got me to thinking about the following.   The larger entities have still not found a working methodology to handle the various risks attached to Internet sales although they are making progress. Remember the three P’s.  You would want others to view you in this way.  So you must view others with the same. 

Piracy is well and alive and they seem to have met their share of unscrupulous sailors on these high and rough seas. Further, labels typically do not offer the same monetary and promotional support as they once did.  Financially conservative states of mind are typically organic to hard financial times.  The best way to negotiate with the larger entities is to understand and respect their concerns and let them know this in your conversations with them.  This means that money is tight and that if you want your share of the pie from the big labels you best do your research ahead of time.  Have a plan.

Why?  Large labels are reluctant to invest their money unless they are reasonably sure that the artist or band is truly committed to their personal goals and will show a good ROI. Further, they want to know that the emerging talent is going to be a 'team player.'  This may sound trite. Consider, however, that the Sex Pistols were signed to three different labels. All three assumed these four unique rough and ready personalities were got to 'join the team.' They couldn't have been more mistaken.  

It is not my intention to entirely disparage these large labels.  They play an important role in the distribution all art.  They are—after all—completely justified in wanting to show profits.   I simply mean to suggest that there should be some balance and compromise between the artist and the label based on thorough risk analysis.   Again, one thing the emerging artist can do to help this to happen is do their share of the planning and research, have a vision and be willing to pay the cost in making their vision a reality.

Keep up with the legal and business trends in the industry.  The emerging artist needs to understand this shifting dynamic and show serious commitment to their overall business structure and artistic goals that Mr. Tertocha shared with me.  Learn the 4 C’s and 3 P’s and let them guide you in your choices. 

Louis has shown me that while one must be careful about the industry, there am still the possibility of fruitful monetary and creative collaborations between the new boys and girls on the block and the big boys and girls.

Louis has also reaffirmed what I have been hearing from my professors and professionals at Full Sail University. Give something back, volunteer, stay in the discourse, listen, learn, and adjust. This industry is after all bit on the notion of creative collaboration. So why should these same ideals and concepts apply to the business end of things.

Again volunteering and showing a genuine interest in contributing your experience and time stands a good chance of paying off—not forgetting that a small part of altruism is good for the soul.  Louis offers his expertise to ambitious projects that focus on education.  I would encourage the reader to review one the Carnival Center For The Performing Art where Louis Tertocha has been General Counsel since 2007 (Adrienne).  I would encourage the reader to show an active interest in the ambitious project.

For more information regarding the Adrienne Arsht Center for the Performing Arts of Miami/Dade Country visit the official web page at (http://www.arshtcenter.org/).

Resources:

Adrienne Arsht Center For The Performing Arts Of Miami/Dade County.  (2007), Carnival Center For The Performing Arts Appoints 
Louis Tertocha General Counsel. (Press Release).  Retrieved from http://www.arshtcenter.org/_inc/press/releases/pressRelease.aspx?rid=10155.