What They'll Never Tell You About the Music Business

by Peter M Thall

  • How do you know if the drivers are familiar with the particular type of vehicles you are leasing or with their unique characteristics?

  Day-to-Day Expenses

  • Is there a basis for comparison to determine whether the projected costs (per day/week/month) are reasonable?

  • Who pays for the diesel fuel? Oil?

  • Who pays for ordinary repairs?

  The Vehicles

  • Has anyone examined the licenses, permits, and certifications of the trucking company and compared them to the vehicles that are being leased? This and similar nitpicky details can be delegated by the tour manager, but someone needs to be responsible for them.

  • Did anyone see the vehicles before they were selected for rental?

  • Have the selected vehicles been inspected by someone on or hired by the artists’ team? It is a good idea to have someone who knows about these things inspect the vehicles before possession is taken because, like rental cars, they will have to be returned in the same condition they were in when first handed over to the artist. Photographs or video would not be a bad idea—put an issue of that day’s newspaper in front of the photographs to establish the date on which they are taken.

  • Is there a list of the vehicles’ serial numbers so the touring group can be sure it is getting what it paid for?

  • Has there been an understanding reached about security of the vehicles? For example, where will they be parked and under what kind of protection when they are not moving? The lessee (artist) will be responsible for sabotage, vandalism, floods, etc., and will customarily be insured against these eventualities. However, if the vehicles are damaged or stolen after being left unlocked or unguarded, the insurance claim on behalf of the artist might be rejected by the insurance company asserting that negligence on the artist’s part contributed to the loss.

  • Is the artist responsible for the cost of moving the trucks or buses from their places of origin to the location where the equipment can be loaded (insofar as trucks are concerned) or to the location where the band and crew are to be picked up (insofar as the personnel are concerned)? Is the artist responsible for the cost of returning the trucks or buses to their places of origin?

  • Are all concerned aware that the vehicles must not be altered in any way? (The owners really do not like their buses and trucks repainted with advertisements screaming out how many booties the band will shake.)

  Security Deposit

  • What is the security deposit and are the terms of its return clear?

  • If the security deposit is to be returned “less damage,” does this mean “less damage caused by the artist or the artist’s entourage”?

  Breach of Contract

  • What kind of cure period is available to the artist and to the trucking company? Is a one- or two-day period practical when taking as long as two days to cure a particular breach can result in a cancellation of a date, the attendant loss of guarantees, and the possible incurrence of additional damages due to the promoter’s losses?

  • If there is a breach by the artist, can the trucking company (1) terminate the lease, (2) recover the vehicle, (3) accelerate damages—such as by demanding payment of the entire remaining portion of the lease fees, (4) charge interest, and/or (5) seek reimbursement for other costs and expenses, such as attorneys’ fees?

  Boilerplate Finally, has everyone paid sufficient attention to the so-called “boilerplate” provisions (the standard language found in most contracts)? We are dealing with vehicles worth hundreds of thousands of dollars, and simple things like notice provisions—including those regarding who receives copies of notices and those relating to the choice of applicable law and location of any lawsuits—can either protect the artist or put the artist at incredible risk. In the arts world, in general, it is customary to provide that the laws of the states of New York or California or Tennessee apply to the interpretation and construction of contracts. There are three main reasons for this:

  1. These states have a long precedential history of cases affecting entertainment industry contracts.

  2. Their courts are familiar with the entertainment industry and will be able to comprehend factual situations that arise as entertainment industry contracts are performed (or breached).

  3. Both the courts and the laws of these three states are sympathetic to the artist’s interests in such situations because the entertainment business is so important to their economic health.

  Sound and Lights

  It is not a stretch to say that the quality of sound and lighting at a concert is the most important production value on any tour. Achieving anything less than perfection can jeopardize the tour and a career. To assure artists that all of their art and work will not be lost in a haze, more time and energy must be invested in formulating agreements affecting sound and light facilities than in agreements involving any other elements of the tour.

  Design The first contractual obligation should be with the artist’s sound and lighting designers. Following that, the contract with the vendor of the sound and light equipment and operating personnel must be carefully drawn to provide that the equipment and services will be provided strictly in accordance with these designs. It is appropriate and wise to attach to the vendor’s contract a paper copy of the sound designer’s and lighting designer’s drawings and specifications. Otherwise, there is no way to pinpoint what it is that is being contracted for.

  Standard equipment and services are provided by a variety of companies. Specialty equipment and services are provided by a company such as Vari-Lite, Inc., owners of the patents to the remote-controlled “self-propelling” lights. If an artist’s manager does not know whom to deal with, the artist’s agent or lawyer or business manager will know.

  Standard Versus Specialty Equipment The companies that provide sound and lighting equipment to artists on tour often offer two different levels of equipment and services: (1) standard equipment and services pursuant to designs provided by the artist’s sound designer and lighting designer and (2) specialty equipment and services provided by companies that own their own technology. The deals are essentially the same, but because there are occasionally two sound and two lighting companies providing the product and the services, a little coordination is needed.

  Personnel and Transportation Costs It is customary for the servicing companies to provide personnel familiar with the equipment. Their cost is built in to the price of the lease. When this is the case, the artist will be expected to bear not only the cost of the technicians, including their salaries, but also payroll taxes and Workers’ Compensation. Most of these are not subject to negotiation; however, the following costs are usually negotiable:

  • transportation of equipment and personnel from the home base of the lighting company

  • transportation of equipment and personnel to and between all rehearsal locations and concert locations

  • transportation of equipment and personnel back to the home base of the lighting company

  • cost of accommodation for the personnel commencing on their arrival at the first rehearsal

  • cost of per diems for each member of the technical staff

  Insurance As with other elements of the tour, insurance (liability, damage to equipment, equipment failure, delay in replacing or repairing equipment, etc.) is an important issue and all of the concerns applicable to the failure of the trucking and bus companies to accomplish what is expected of them apply here as well. In particular, many tours experience, and actually plan for, a hiatus in the touring schedule. What must the artist pay during such a break? Sometimes the fee is reduced for the equipment; more often, the personnel are sent home and the equipment is moved to a secure location for the hiatus period. There may be scheduled downtime as well as unscheduled hiatuses, and the professionals negotiating these agreements must provide for these contingencies in the contract. Surprises are costly.

  PRIVATE CHARTER

  You’re tired of buses. You’re tired
of weather and traffic delays, breakdowns, and the sheer time it takes to go from place to place. Speed is now in your vision of how you would like to conduct your tour. Time to rent an airplane and hop on.

  Now that you have forsaken the bus for the airplane, and have factored in the additional costs (and savings), let’s discuss the unique issues that arise from your newfound adventurousness. What is the main difference between a bus and a jet plane? No, it’s not the wings. It’s the availability! Whereas buses can be replaced and substituted for fairly easily, airplanes cannot. There are several important differences between these two modes of transportation:

  1. Planes are inspected more regularly than buses, and if they do not pass inspection, they will be grounded. This happens far more frequently than you can imagine.

  2. It is easy for a plane to fail inspection or to be grounded voluntarily because a part is needed; most airports do not keep a lot of spare parts around.

  3. Air routes are much more closely monitored and controlled than ground routes.

  4. Weather and traffic can wreak havoc on flight schedules; buses can more easily locate alternate routes.

  5. Finally, if you think that bus drivers have to be rested periodically, imagine the rules affecting jet plane pilots!

  One detail that is true of both buses and planes concerns location. Whether you are traveling by bus or by plane, you will have to find a way to get it from its home base to the city in which you are rehearsing and from which you will depart for your first date. And—you’d be surprised at how many people overlook this detail—you actually have to return the vehicle to its city of origin.

  An attorney for one of our era’s biggest touring acts told me that he actually has a solution to these problems—one that I think is more easily achievable than to open up a new air route in an otherwise overwhelmed traffic lane: he prays. Here are some other approaches.

  The Bigger the Broker, the Better One of the tricks of the trade is to deal only with brokers who have access to other planes. While we in the music industry like to encourage young, small entrepreneurs in many areas of the business, here is one situation where the bigger the broker, the more likely it is that you will get what you need when you need it.

  Force Majeure All air travel is subject to the vagaries of weather and air traffic conditions. That is why it is a good idea to try to insert in touring agreements involving moving from venue to venue a little extra language in the force majeure clause (the clause that essentially says that if a failure to perform is the result of an “act of God”—such as hurricane, earthquake, strike, or other disaster—neither party to the agreement will be held to be at fault). The extra language would include “failure of transportation” outside of the control of the artist. This would include a failure of the aircraft to pass inspection; it would also cover a delay due simply to too much traffic. August is usually one of the busiest months for air travel, and it is also one of the preferred months for large touring acts. Capacity problems at airports can wreak havoc on a tightly scheduled tour. There may be more takeoff and landing slots authorized by federal law than existed just a few years ago, but there also is a backlash by commercial travelers against private carriers. Airports have been forced to delay private planes because of pressure from commercial travelers. A big-time rock band will not engender a lot of sympathy when it is a question of their being on time for a gig versus a grandmother trying to arrive in time for her grandchild’s birthday celebration. In 2015, 18% of all flights (that’s a million flights) were delayed by at least fifteen minutes (one flight to Atlanta was delayed 97% of the time!), 2% (90,000) were canceled altogether, and three out of ten were diverted—the worst record in years. Some of the causes of flight delays are maintenance problems, fueling. extreme weather, airline glitches/scheduling (the top cause), congestion of air traffic, late arrival of connecting flights, and security issues. A well-oiled, tightly scheduled tour can be severely disrupted if the artist’s jet has to idle for three hours on the runway. According to the air traffic division manager for the Eastern Division of the Federal Aviation Administration, “You don’t have to be the sharpest knife in the drawer to know that I’m going to have aircrafts left over that I can’t accommodate when ten flights are scheduled to leave and twelve are scheduled to arrive within four minutes on a typical day.”

  Variations on Leases There are actually not a lot of variations or provisions open to negotiation when it comes to airplane leases. Probably the most important one is whether the plane comes with or without fuel. This may sound like a no-brainer, but believe me, when the cost of fuel is factored in to the lease price, what appeared to be a good deal, one within one’s budget, can go south in no time. Aircraft are traditionally leased in “wet” or “dry” conditions. A “dry” lease may mean not only that the aircraft comes without fuel, but that it comes without crew or maintenance also. In that case, an aircraft management agreement must also be entered into with a vendor of such services in addition to the aircraft lease agreement. Oh, the legal fees!

  Warranties Unique to Aircraft Leases In the ordinary course of events, you might expect to receive at least these warranties from the leasing company: that the lessor owns the aircraft and has the right to enter into the lease and that the aircraft has been maintained in compliance with applicable federal regulations and is “airworthy.” But many other, similarly reasonable, warranties that one might normally expect to receive are not always available from the companies that lease jet planes. In view of the fact that many tour schedules are poorly thought through and the pressures of time and availability provide for few, if any, alternatives, warranties such as “merchantability or fitness for a particular purpose” are often specifically excluded and disclaimed. There is simply nothing you can do about it if you want that plane now.

  Similarly, leasing parties—the artists or their service corporations—often have to make certain warranties with respect to things they do not have knowledge of. For example, they may be required to affirm in the leasing contract that the artist’s corporation is authorized to assume the enormous responsibility of undertaking a costly aircraft lease. This authorization may not in fact exist, and the certificates of incorporation of traditional industry corporations often do not permit such an undertaking, and a warranty made and breached can have dire consequences to the shareholders.

  Paperwork Bet you didn’t know that your touring company has to file a signed copy of the lease with the FAA, Aircraft Registry, Flight Standards Technical Division, P.O. 25724, Oklahoma City, OK 73124, within twenty-four hours after the execution of the lease. And, at least forty-eight hours before takeoff of the first flight under the lease, the lessee needs to notify the FAA Flight Standards District Office, General Aviation District Office, Air Carrier District Office, or the International Field Office nearest the airport where the first flight under the lease will originate informing them of (1) the location of the airport of departure, (2) the departure time, and (3) the registration number of the aircraft.

  Pricing All charter leasing companies have rate cards for renting their planes. Often they offer “specials” on short notice when they have leased a plane to one destination and have no one paying the cost to return it or to fly it to another destination where it can be rented by another party. These might include a one-way rental from Houston to Miami, for $5,500 or from London to Paris for $11,000. The dates are specific and will not always mesh with the artist’s tour plans and therefore short-notice opportunities do not serve a touring artist very well. Nevertheless, these options are widely available and should be considered in a pinch. Ownership or fractional ownership of aircraft is another alternative, but this characteristic of convenient travel is on the wane because newer planes are always available for lease at a fraction of the cost of maintaining all or a portion of a self-owned plane. Private charter is the preferred choice nowadays for many touring acts, and the leasing industry is becoming more adept at juggling charters so as to make the process le
ss complicated. A variety of pricing plans are available to fit any particular needs such as purchasing block hours where you pay on completion of the trip (not coincidentally when the fee for the concert is also paid). Finally, charter companies offer one-way private jet flights. While these one-ways are based on availability, you would be surprised at how many planes are sitting just where you want them and available to go just where you are going. Yes, they have more stringent cancellation policies, but this is an option you might not have considered. Check out Blue Star Jets (www.​bsj.​com) for an array of available itineraries.

  Are you beginning to get the idea that your life and those of your representatives (and bankers and insurance companies) may be a lot more complicated now that you have forsaken the bus for the airplane? Nevertheless, plane transportation works most of the time. As long as your cabin pressure transducer doesn’t fail! And as long as the lessee’s (the artist’s) $100 million insurance policy is actually in force! And don’t forget the “engine reserve” and “airport-related expenses”!

  All of this is to emphasize that aircraft leases, like any other contract entered into on behalf of an artist in the music industry, must be considered carefully and by expert counselors. And the cost for the lease as well as for the maintenance services and the legal fees must be calculated into the total cost of the project in sufficient time for the artist to be fairly—and safely—represented. Sufficient time means time to drop the idea and find an alternative way to transport your equipment and personnel.

  Pyrotechnics

  Many performing artists seek to enhance their live shows with pyrotechnics, the name given to special-effects displays that use explosive materials. Silver fountains, concussion effects, airburst effects, flame effects, fireworks, gerbs, waterfall gerbs, flame additives, flash powders, saxons, bullet hit simulators, fireballs, comet effects, flashpaper comets, shock tube initiator, and crossette effects have entered the lexicon of the live tour.