Talent Agencies Closing Offices Permanently?

With the entertainment industry indefinitely idled what future remains for talent representation offices?

As COVID-19 continues to destabilize life and business, will talent representation offices of the near-dormant entertainment industry indefinitely close their office space? Mirroring a swath of corporate America?

Surveying 517 IT decision makers from various industries, S & P Global Market Research discovered 67% polled expect the new norm of work-from-home to extend for the foreseeable future or remain permanent. Corporate America discovered employees working from home raised productivity rates. Some advantageous companies realized a path for survival in a diminished economy. Eliminate expenditures, and some staff, by eliminating part or all of the company’s brick-and-mortar presence.

A talent agency’s brick-and-mortar presence is largely funded by commission received from the agency’s working clients–mainly actors. But Broadway and regional theater remains shuttered until 2021, possibly 2022. TV and film production is curtailed. The majority of talent agencies are small businesses. Each with a handful of employees representing 50 – 150 actors. The larger, corporate-like, representation firms of CAA (Creative Artists Agency), ICM (International Creative Management), William Morris-Endeavor, and alike with global offices, extend representation beyond box-office stars and tabloid celebrities. The representation titans individually covet a vast and varied client roster that likely includes: estates of past clients, television news hosts/commentators, on-camera guests/experts (politicians, medical professionals, scientists, academics, activists), authors, journalists, athletes, musicians, tastemakers, speakers, designers (fashion, lifestyle, digital, production), models, artists, reality stars, screen writers, playwrights, producers, directors, choreographers, casting directors, production personnel, plus numerous stage and screen productions of past, present, and future. These bespoke behemoths continue to collect revenue from investments, royalties, production deals, commissions, client estates, and above and below line residuals. The average talent agency has none or few of these income cushions. As the revenue stream remains dry for the small business talent agency will they be permitted a similar survival tactic—abandon office space indefinitely—as have a growing number of U.S. companies large (Google) and small (Health Roster)?

Two potential roadblocks to talent agencies abandoning office space.

1. In New York, the New York City Department of Consumer Affairs issues a license to a talent agency to operate as an “employment agency.” For a talent agency to be granted a license the agency must adhere to Article 11 of New York General Business Law, Article 11, Section 174 which states there must be a “public office” “used exclusively as an employment agency and for no other purpose.”

2. Actor unions require a franchised talent agency to have an office that conforms to multiple parameters.

The two, major, U.S. actors’ unions SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists), and AEA (Actors’ Equity Association) determined—and continue—rules enforced for the physical presence of a talent agency’s office. Depending on the talent agency’s union affiliation(s), and/or the region/city that the agency is located the guidelines vary. One rule remains constant: a union-franchised talent agency must have an office accessible to clients for visitation. Further defined by both unions to include an actor’s ability to pick-up scripts, audition material, and for the actor to drop-off headshots and related marketing assets at their agent’s office. The latter guideline is a twentieth century antique. Twenty-first century headshots, scripts, audition sides, and an actor’s video clips or reels are routinely exchanged digitally online by actor-to-representation-to-casting. But analogue mandates for where talent representation must have office space remain. In New York City an actors’ union once dictated that a talent agency had to be within the boundaries of particular blocks within the theater district so as to be of convenience to actors. Those boundaries have been lifted. But a New York City talent agency must still remain within Manhattan’s historically, skyrocketing, real estate market. A crashing market presently as Manhattan based businesses fold or flee.

In an industry not presently industrious at producing revenue from union-based employment talent agencies have furloughed, or laid-off, staff. Employees working from home during government stay-at-home mandates. But for most agencies there remains office rent due. There may be no office rent due of a talent manager or casting director. Neither entity is governed by actor unions, or if based in NY–New York State Business Law Article 11, Section 174. Their professions were among the first to work-from-home shortly after the digital revolution impersonalized the representation and casting process via email, self-tape, e-casting, and auditions/meetings via video platforms like Zoom. The digital revolution, and COVID-19 pandemic, has altered and questions our analogue perception of business: is a brick-and-mortar construct required to conduct the entirety of every business?

A talent agency finding affordable real estate that’ll be approved by actors’ unions, and if in New York meet state standards, has been a longstanding fiscal nightmare for these small businesses. An agency survives on 10% of what their working clients make. The number of working clients at any one time is usually a slim percentage of an agency’s roster. In some pricey real estate markets, a talent agency in order to fiscally survive, will often move chasing lower rent. Or like a growing number of agencies dissolve their franchise(s), and became management companies for which there is no actors’ union real estate mandate.

The majority of union, and non-union actors, with representation via a franchised talent agency are represented by a small business talent agency. Work for actors will resume in some form. Even when that happens, talent agencies currently working remotely will continue to be governed by actors’ unions, or by state/city ordinances, to occupy obsolete office space. But how many of the small business talent agencies can survive until then? How many agencies make the move to management? How many actors will find themselves without an agent?

Coming Next Week…

A New World For Actors Post-COVID
From guest columnist, Douglas Taurel.

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About Paul Russell – Paul Russell Casting

Paul Russell has been in the entertainment industry for over forty years as an award-winning casting director, director and the author of ACTING: Make It Your Business. He’s cast for 20th Century Fox, HBO, Broadway, and regional theater. Featured in American Theatre Magazine, Paul has directed premiers, and at the Tony-award recognized Barter Theatre. He teaches master classes at university BFA and MFA actor training programs, and privately online with actors globally. Paul began his career in entertainment as a successful working actor. Visit Paul & Paul Russell Casting @ PaulRussell.net.

Actors Beware of These “Manager” Contracts!

When it comes to the profession of representing talent the profession of personal manager is unfortunately the most fraught with shady characters. Individuals operating scams that at worst defraud actors. At best create a lopsided arrangement. One that is less an advisor-n-artist partnership but where the “manager” is a self-serving predator. Managers are not regulated by actor unions and/or local and state government oversight as are agents. Yes, there are reputable, respected managers. Their industrious support of actors is overshadowed by opportunists tagging themselves unjustly as a “personal manager.”

The largest red flag demarcating a “manager” of questionable integrity from a reputable personal manager is the ethically challenged “manager’s” manager-actor contract.

Answers for Actors reviewed one such eyebrow raising manager-actor contract littered with dubious clauses. Binding terms that are not in the best interest of the actor.

For identification purposes this management’s operation will be given hereinafter the fictitious moniker Management Extraordinaire: M.E. as an abbreviation.

Answers for Actors calls, B.S. on such a broad, and open clause.”


Actors beware of the following.

Commission:

First some good news. Some industry respected managers collect 10 percent commission on actor salaries derived from projects of which the actor participates as talent. It’s the same percentage that agents collect as regulated by performing artists’ unions. A larger number of managers collect 15 percent. Not so good news? Being that there is no government or union regulation or oversight of managers a manager can collect whatever percentage they choose, that an actor is willing to sign away. Management Extraordinaire collects 20 percent. Above the norm. An actor going into an agreement with a manager should not part with more than 10 – 15 percent commission.

To Management Extraordinaire’s credit—unlike one greedy “manager”—they don’t collect commission from the actor’s survival job(s).

Bilking the Actor:

Slipped slyly into Management Extraordinaire’s terms for commission is this:

“Artist agrees to pay or reimburse Manager for all out-of-pocket expenses which Manager incurs from time to time on behalf of Artist.”

Answers for Actors calls, B.S. on such a broad, and open clause. The “manager” could claim anything as “out-of-pocket expenses.” Agents are not permitted to invoke such a swindle.

Later in the contract Management Extraordinaire hits the artist again for reimbursement of operating expenses—which in any above-board representation firm are covered by the representation’s income that is earned commission. But M.E. is greedy:

“Pursuant to Manager’s Model’s Loan Agreement, Artist shall reimburse Manager for all costs incurred on behalf of Artist. Such costs, among others, include, messenger fees, comp cards, portfolios, web site charges and other such charges pertaining to the management and representation of a model.”

A franchised talent agent in Philadelphia had a similar scheme of charging actors for web site fees, office expenses and alike. Answers for Actors exposed the agent’s actions to Actors’ Equity Association, and SAG-AFTRA. The agent was instructed to cease and desist or lose their agent franchise agreement. Unfortunately with managers, no such Sword of Damocles can be held over the enterprise of the manager. If the actor signs a contract with a “manager” that has these types of soaking-the-actor-for-more-monies clauses—the actor is not the victim but the fool.

Fees:

Management Extraordinaire—like a bank manufacturing fees at whim—finds more ways to profit off of the actor with the following:

“Artist is aware and agrees that Manager is entitled to receive a service charge for any and all of the Clients who utilize Artist’s Services.”

Basically M.E. is attempting to additionally proffer with a service charge billed to producers who hire the actor. B.S. flag again. M.E. successfully asking for and receiving a service charge from producers is highly unlikely. Possibly, Management Extraordinaire negotiates a salary for the actor taking 20 percent commission plus an additional, undisclosed, amount from the salary as well earmarked as the “service charge.” How could they do this without the actor knowing more money has been deducted? The deception begins in an earlier clause in M.E.’s manager-actor contract.

M.E.’s contract gives the company power of attorney to “collect and receive monies on Artist’s behalf, to endorse Artist’s name upon and deposit same in Manager’s account with any bank, and to retain there from all sums due Manager at any time.”

The actor never receives monies directly from a producer. M.E. could be telling the actor that the producer has agreed to pay the actor $600 per week. But actually M.E. negotiated that the producer pay a higher amount. M.E. doesn’t disclose the higher amount to the actor, and since monies go directly to M.E.’s bank account, M.E. skims off the excess as the “service charge.” Plus, the 20 percent commission. The actor is never the wiser.

Manager as Loan Shark:

From M.E.’s manager-actor agreement:

“Artist hereby assigns to Manager the proceeds of all assignments performed by Artist, against which advance payment is made by Manager to Artist. Upon completion of this Agreement and pursuant to the terms of Manager’s Pay and Personal Loan Policy Agreement, advance payment is made if and only if vouchers are presented to Manager immediately after said assignments and are duly completed and signed by Client and Artist. If, in accordance with Manager’s voucher system, Manager does not receive a collection within three (3) months, Artist will upon request reimburse Manager for the sums advanced to Artist. Manager will take all reasonable steps to collect the amounts due with respect thereto. The risk of collection, in connection with Artist’s vouchers, and the legal costs thereto shall be borne entirely by Artist.”

Basically M.E. is loaning out to the actor the anticipated income from a booking. This should never be a consideration. With union projects, a bond is required of the producing organization. Some sum due to the actor is guaranteed. With M.E.’s inclusion of this clause it means that historically M.E. has booked their past or existing actors with likely non-union entities that stiffed talent on payment. And in those instances the actor paid to the manager the monies never received from the booking(s).

If I State in Writing I as Your Manager Can Not Manage or Negotiate Your Deals—But I Negotiate Anyway—I Can’t Be Violating the Law, Right?

M.E. is trying to be clever and coy stating in the contract they’re not really part of job procurement for the actor. But M.E. lacks grammatical dexterity to cover their ass that they are negotiating:

“Artist shall advise Manager of all offers of assignments submitted to Artist with respect to modeling and will refer any inquiries concerning Artist’s services to Manager. Artist acknowledges that Manager is not an “artist manager” under the labor code of New York or an employment agency in any jurisdiction, and Manager shall not be required or expected to obtain offers of employment for Artist.”

There are, reputable, transparent, well-regarded personal managers. The contractual abuses highlighted here should not deter actors from seeking a manager. If a contract—with these or similar terms—is presented the actor must heed caution before proceeding further.

There are several personal manager associations that managers can join which screen managers for legitimacy. Joining one of these associations is voluntary. Legitimate managers exist who are not members of manager associations. Self-regulating, the associations set professional operating standards for approved members. The U.S.’s prominent personal manager associations are the National Conference of Personal Managers, and The Talent Managers Association. Both have a Code of Ethics. The Talent Managers Association (TMA) has the more extensive Code of Ethics which includes limiting commission a manager may charge clients. TMA establishes limits on managers as to how long the manager represents an artist under a single-term contract. Plus TMA’s Code of Ethics expressly prohibits managers from charging clients fees for: coaching and acting classes, office expenses, and web site registration.

Both TMA and NCOPM have on their web sites their individual Code of Ethics, plus listings of current manager membership.

When signing with representation—agent or manager—bear in mind these guidelines:

  • Representation should only be collecting commission from the actor on projects from which commission collection is permitted.
  • Representation is not to be charging an actor fees for any operating expenses related to representing the actor.
  • No Advances. No Loans.

CASTING DIRECTORS, TALENT AGENTS, DIRECTORS & ACTORS

LOVE PAUL RUSSELL’S BEST-SELLING BOOK FOR ACTORS ACTING: MAKE IT YOUR BUSINESS!

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Actors everywhere who are trying to succeed in the business, young or old, on stage or on camera, anywhere in the world, take note:

This is your roadmap!”

— BERNARD TELSEY, casting director – CSA (Mary Poppins ReturnsHamiltonThis Is Us,NBC’s Jesus Christ Superstar – LIVE!Wicked)

Get smarter on the business of acting from legendary Hollywood & Broadway actors and talent agents in a casting director Paul Russell’s Best-Selling Book ACTING: Make It Your Business!