Managers Law Meets The Courts

This could be the year artist managers have been waiting 40 years for, or it could be a total bummer.

A case called Marathon Entertainment vs. Blasi has been winding its way through the California court system for nearly half a century, and it is finally on the docket for the state Supreme Court. Long story short, this year could decide if managers will continue to be subjected to the California Talent Agencies Act.

The law has a long and storied background and has been a burdensome yoke for managers across the nation, according to Clinton Billups, head of management company CFB Productions and president of the National Conference of Personal Managers.

The law was originally intended to protect naïve Midwestern émigrés, with stars in their eyes, from the wily Hollywood movie agent. The law was meant to protect the innocent artist but, according to Billups, it has morphed into a tool to shaft the Broadway Danny Roses of the world.

Managers are well-versed in the details of this issue, but it is complex to those that have not had to live with it. Basically, by California law, a manager cannot procure jobs for clients, according to Billups, and it is the only state that has this clause. Of course, this law gets broken more often than the Golden Rule.

"After all, any manager’s ultimate goal is to increase the income of the talent," Billups told Pollstar. "He has to be somehow involved in seeking employment even though he has a bigger responsibility."

Artists – especially the millionaire film stars of 50 years ago and sometimes present day – realized that, once the money started to roll in, they could use the Talent Agencies Act to break relations with their managers and keep 100 percent of the profits, Billups said.

Say a band needs to write a 15 percent commission check, Billups explained. Instead, the members go to an attorney.

"The attorney would say, ‘You woke up this morning and discovered your manager was not a personal manager but an unlicensed talent agent in California. We’re going to file a complaint with the Labor Commissioner."

At this point, the artist is represented, free of charge, by the state. If the manager challenges, he has to pay an attorney if he wants his percentage and it’s usually not worth it, Billups said. Worse, the whole enchilada is at stake.

"The Labor Commission would order all commissions paid to the manager get repaid to the artist," he said. "Even if the manager got them some small job at scale, millions would need to be returned. Then, the commission got bolder, taking managers from outside California before them – a clear interference with interstate commerce."

Along came Marathon Entertainment v. Blasi, which is manager Rick Siegel versus an actress client. Siegel was hit with the classic scenario but, instead of folding, did some research.

Siegel found that a California law title must reflect the actual law, Billups said. In other words, there’s no "manager" in the title of the Talent Agencies Act. In fact, the state legislature removed managers from the law in committee, according to Billups, but the superior court determined otherwise and the Labor Commission has followed its ruling.

Marathon got a split decision in the state’s court of appeals, Billups said. The court decided that a manager was due severability, meaning the manager would only need to pay back the commission on that one booking faux pas. However, Siegel had no luck convincing the court that the law does not apply to managers.

Now, the state Supreme Court could send the case to the Labor Commission for review. What’s got Billups’ goat is that acting Commissioner of Labor Robert Jones, who would hear the case, has written to the court that he is in favor of Blasi’s position. Which would be fine, if Jones recused himself.

"It’s a misdemeanor for a hearing officer to act as an advocate in a case he might adjudicate," Billups said.

The National Conference of Personal Managers has sent a letter to Gov. Arnold Schwarzenegger asking for an investigation of Jones. Billups does not have high hopes that the millionaire actor-turned-politician will step in on the side of managers or even get involved in the dicey situation.

Yet, he has hope.

"There’s been a gradual deregulation of the personal management industry," he said. "Ultimately, in 2007, if the California Supreme Court doesn’t agree with us, I’m sure that a federal judge will."