Commentary

Entertainment Industry Agreements

1         Agents  2

2         Managers  2

3         Venue Consultants  2

4         Licences & Fees  3

4.1      Agents  3

4.2      Managers  4

4.3      Venue Consultants  4

5         Trust Accounts  5

6         Financial Record Keeping  5

7         Bonds  5

8         Complaints Committee  5

9         Interstate Representatives  6

10       Summary  6

Entertainment is an industry which by its nature crosses many State borders. Each State in Australia has a different set of legislation that applies to it.  Only New South Wales requires licensing.

The Entertainment Industry Act 1989 (NSW) (the Act) controls the relationship between managers, agents and performers. It provides a system of licensing, regulates commission rates, sets out obligations, and provides for penalties.

The definition of ‘performer’ for the purposes of the Act includes any actor,  singer, dancer, acrobat,  model, musician or other performer of any kind.

The Act  is administered by the NSW Department of Industrial Relations. The Act regulates the professional activities of all people acting as entertainment industry representatives. It divides these into the following categories.

1            Agents

Entertainment Industry Agents are defined  as anyone who;

for financial benefit, carries out any one or more of the following entertainment industry activities on behalf of a performer:

(a)  seeking or finding work opportunities for the performer;

(b)  negotiating  the terms  of  an agreement  for, and the conditions  of,  a performance;

(c)  finalising arrangements concerning the payment of the performer;

(d)  negotiating arrangements relating to the attendance of the performer at a performance;

(e)  administering  the contract  of  the performer  with an entertainment industry employer but does not include a person who carries out those activities solely as an employee of any such agents.

This applies to anyone who performs these functions for ‘financial benefit’. (This expression covers more than actually being paid money. It covers receiving indirect benefits such as contras and the like.)

2            Managers

Managers  are defined by the Act as being:

a person (whether called a personal representative or a personal manager, or otherwise) who, for financial benefit, represents a performer and who agrees, pursuant to a written agreement, to carry out or arrange to be carried out any or all of the activities of an entertainment industry agent and other additional activities or duties specified in the agreement on behalf of the performer but does not include  a person who carries out those activities or duties solely as an employee of any such manager.

In effect, the definition means that a manager  may perform the five functions of an agent but must also perform additional activities or duties for the artist. It is these additional obligations that give rise to the manager’s right to charge a greater commission. Given this, it is important that management agreements make it very clear exactly what duties and obligations  are being undertaken by the manager in addition to the five functions of an agent.

For a manager to be a ‘manager’ under the terms of the Act, they must have a written agreement with the performer. Unless the manager has a written agreement the ‘manager’ is restricted to the percentage payable to agents. This is why managers in New South Wales (at least those who know what they are doing) do not do ‘hand-shake’ deals any more.

3            Venue Consultants

This is defined  as being:

a person who acts on behalf of an entertainment industry employer, for a fee or remuneration paid by any such employer and who arranges for a performance by a performer at a particular  venue, but does  not include a person  who arranges for a performance solely as an employee of a venue consultant  or an employer.

This means that venues can arrange for performances without a licence, but anyone arranging performances  on a  venue’s  behalf in  return  for  any payment, has to be licensed.

4            Licences & Fees

All ‘entertainment  industry representatives’ must have  a licence  from the NSW Department of Industrial Relations. The licence fees are available on the Departments website.

The expression ‘Entertainment Industry Representative’ is defined by the Act as meaning an agent, manager or venue consultant. If you work in more than one capacity, you need a licence for each of those activities. For example, being a licensed manager does not authorise you to act as a venue consultant. Venue consultants  have their own particular licences.

Applicants  for any licence must be ‘fit and proper’,over 18 years; and with knowledge and experience in the industry. There are no hard and fast rules as to who is ‘fit and proper’.

The last prerequisite is usually met by anyone who can show a reasonable period of activity in the industry or in an area closely related to the activity for which the licence is sought. Would-be managers who have been performers can usually demonstrate sufficient knowledge from having worked in the industry for a reasonable time.

Successful applicants  receive  ‘provisional’ licences  for  the initial  12 months.  Licences must be renewed annually. This way, the Department has the opportunity to review licensees who have had complaints lodged against them and can attach conditions to a particular licence.

There are still many managers working in New South Wales who do not know that they have  to be licensed. Unlicensed representatives face penalties  of up to $25,000 and may not be able to enforce their management contracts.  The Act sets maximum fees that industry representatives can charge. These are set out in the Regulations.

4.1       Agents

Regulation 5 states that the maximum percentage that may be charged is as follows:

(a)  in the case of  an engagement  involving film, television  or electronic media – 10%;

(b)  in the case of an engagement involving live theatre or a live musical or variety performance (being an engagement  that does not involve film, television or electronic media) – 10% for any period up to 5 weeks and then 5% for any period after 5 weeks;

(c)  in all other  cases – 10%.

The regulation goes on to state that:

the following  amounts  (being  amounts  payable to performers)  are  to be excluded when calculating  the percentage of fees or other remuneration that an entertainment industry agent or a manager may demand or receive for or in respect of the engagement of a performer:

(a)  travelling and meal allowances;

(b)  holiday pay;

(c)  any long service leave and superannuation payments;

(d)  any overtime or penalty payments which are paid on an irregular basis;

(e)  any award or minimum payments in respect of rehearsals.

4.2       Managers

Section 38 (4) of the Act states that where there is no written agreement between manager and artist ‘in respect of an engagement’ the manager is limited to charging  the agent’s  commission  of  10%. This is considerably   below   the   usual   15%-20% allowed   by most   written management agreements.

The reference to ‘engagements’ is ambiguous. This term is not defined in the Act but usually would be given  a  restricted meaning, namely, ‘contracts for live performance’. This would exclude other income such as endorsements and royalties – whether from records or merchandising. If this is so and you are acting as a manager  in NSW, unless you have a written agreement with the artist you cannot charge more than 10% for income from live work but may be able to charge the usual rates on everything else.

4.3       Venue Consultants

In the past, people who performed two functions often charged two fees. For example, if the performer’s agent also acted as a consultant to the venue, they would often charge the act for obtaining the employment and would charge the venue for obtaining the act. This kind of behaviour  was always a clear conflict of duty. Under the Entertainment Industry Act, it is also illegal.

Venue  consultants  can only receive  payment from the venue/employer. The Act also makes it illegal for the venue to deduct any money from the performer’s income and pay it to the venue consultant.

In times past, some performers’ agents often acted simultaneously as the venue consultant and charged both parties a fee for placing the performer in the venue. Now, if the performer’s agent also happens to be a consultant to the venue in respect of the performance, the agent can only charge  the venue. If the performer’s manager happens to be a consultant to the venue, the manager can collect a commission from the performer but cannot also charge the venue, unless the manager and the performer have a written agreement that permits this.

5            Trust Accounts

The Act prohibits performers’ funds being mixed up with those of the agent or manager. If entertainment  industry  agents  or managers  hold money  on behalf of their performer clients, they must establish a separate trust account for  each  artist. The requirements for  the accounts   are  set  out in  the Regulations. The artist’s money cannot be held for more  than 14 days  after the performer  becomes entitled  to receive it.

6            Financial Record Keeping

Entertainment industry agents and managers who receive money on behalf of a performer, must maintain proper financial accounts on behalf of that artist. These must be accurate and properly maintained so that they show the true position as regards money received on the performer’s behalf. These financial records must be kept  at the representative’s  principal place  of business and be made available to the performer upon request.

The Regulations also require that, where an agent or manager receives money on behalf of a performer, that person must provide certain minimum information to the performer and any other  agent  or manager  who acted  for the performer,  in respect  of that particular performance:

(a)  a statement of the amount received by the agent or the manager on behalf of the performer; and

(b) a statement of the amount paid to the performer for the engagement.

In addition, the manager or agent who receives  money on behalf of the performer must provide a statement to the employer (or other person) who paid the performer  for the engagement with a statement  setting  out the amount of money received from that employer.

7            Bonds

If entertainment industry agents and managers hold performers’ money, they must lodge a bond with the NSW Department of Industrial Relations. The amount of  the  bond is  $2,000 unless  otherwise  determined  by the Department. This bond can be either be in the form of cash, bank guarantee or other security approved by the Department. If entertainment industry agents are not holding performers’ money, they do not need to lodge a bond.

If the agent or manager does anything that causes the performer loss, the Department may assist the performer by releasing all or part of the bond. It can then demand that the agent or manager lodge a further bond. If they fail to comply, the licence may be suspended until they pays the further bond.

8            Complaints Committee

Part 3 of the Act establishes a Complaints Committee to investigate  complaints regarding:

(a) unfair or dishonest conduct;

(b) unfair entertainment industry contracts; and

(c)  any failure  to  pay  amounts  owing  under  an  award,  industrial agreement or entertainment industry contract.

The Department handles any complaints internally. The complaints procedure is not complex. All that is required is a written complaint to the Department.

If the Department finds that a person  is guilty of unfair or dishonest conduct it can order a penalty of up to $500. If it finds that an entertainment industry contract is unfair, harsh or unconscionable,  it  can redraft  the offending clauses. Provided that the parties agree  to be bound at the beginning of the inquiry, the Department  can make orders in respect of any failure to pay moneys owed up to $20,000.

Section 12(4) states that ‘An entertainment industry contract or a provision of such a contract which has been fully executed may not be varied under this section’.

9            Interstate Representatives

The application of the Act to interstate managers and agents is uncertain. The prevailing view is that any entertainment industry agent, manager or venue consultant carrying on any business within New South Wales must be licensed. It is not relevant that the manager, agent, consultant or the performer is usually resident in another State. It is the location of the performance that determines jurisdiction.

10       Summary

The different branches of the entertainment industry are so varied that different agreements may be needed for different branches. Theatrical agents’ needs  are  quite  different from those of musicians’ agents. Those of modelling agents differ from those of classical music agents. A selection is provided in this suite.

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