Rob Shore: Maximizing Music Business Management

June 8th, 2010 by Trenton

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MIDTOWN, MANHATTAN: How do YOU manage? If you’re a band or solo artist working above a certain level, then you do it with a business manager like Rob Shore.

The Big Dogs: Rob Shore and Manny

Straight from Madison Avenue, Rob Shore and his team oversees monetary matters for a diverse roster of 35 artists, including As I Lay Dying, Flyleaf, K’naan/, LCD Soundsystem,  New Found Glory, Portishead, Slipknot, The XX, and Wolfmother.

Shore opened his own practice after spending 16 years – 1988-2004 – handing the business management for all the acts on Sanctuary Management.  During that time, Shore saw the Power of Metal firsthand with juggernauts like Guns N’ Roses, Iron Maiden, Poison, and Dream Theater to look over.

SonicScoop got a reminder of why they call it the music biz – as in business – when we sat down with Shore.

Q: You’re quick to stress that you’re a business manager, as opposed to a creative manager. What do you mean by that?

A: Although Business Managers and Creative Managers work closely together, they’re two totally different jobs.  Creative Management is 24/7, there’s a lot of guiding the artist and Creative Managers weigh in on every decision in the artist’s career.  Most of these are grey areas, with no absolute right or wrong choice, like deciding which producer to use for a record, or which singles, what video director, or what record label to sign with.  These are primarily a Creative Manager’s job, and none are particularly easy choices.

That’s the thing I like about business management: There’s not a lot of grey area, it’s mostly black and white.  We work within the deals that have already been made, so, for example, when money is due from a merch company or publisher, the Business Manager makes sure that the funds collected and spent are contractually correct and in the best interest of the artist.  The Business Manager oversees the finances of touring, merchandising, publishing royalties and keeps artists’ financial interests in their mind at all times.

Q: What are some additional differences between business and creative managers?

A: My analogy is that a creative manager is like a heart surgeon, and a business manager is like a dentist. It’s not as exciting to be a dentist — but no one calls a dentist at 4 AM to have their teeth cleaned. A heart surgeon gets called 24/7.

Unlike the Creative Manager, the role of business manager in most industries isn’t necessary, because the owners are usually the ones who look after their money.  In our case, it’s often not in the interests of an artist to oversee what we do because it’s not an efficient use of their time – and can be almost impossible while on tour.

The XX

For example: Is it more important that an artist find the proper insurance, or focus on songwriting, which will probably lead to more success than making sure his insurance is in place?  Both are important, but many artists find the best use of their time is to hire someone else to deal with things like insurance, so they’re free to create.   This defines what we do, why we’re necessary.

Nothing we do is brain surgery, but there are tricks of the trade: every country has different touring laws for different bands, and unless you know how to minimize taxes, you’ll pay full rate everywhere you go, and it makes it almost impossible to tour on a tight budget.

Q: So, in contrast, what are some of the things that a business manager handles?

A: That includes artist royalties, merchandising, reviewing deals, and making sure the tour runs smoothly so the artist is not missing out on any revenue that’s coming to them.

We make sure that taxes are paid properly, from the IRS to foreign states. We basically protect the artist from any kind of financial situation. It’s incredibly humbling that we’re trusted with tens of millions of dollars belonging to these artists. But we’re certainly not a bank. My practice is a word-of-mouth boutique, more user-friendly and service-oriented.

Q: If I’m an artist reading this, my question would be, “At what point do I require a business manager?”

A: What usually happens is that we are brought in when a record deal is signed. The creative manager may have brought them to the record company level, but a business manager isn’t needed until there’s money to manage. So in the band’s early days, where they’re playing for $200 a night, my services probably aren’t necessary.

I’m usually brought in after manager and lawyer are in place when either a record deal or tour is about to happen. The lawyer has worked on the deals, the deals go through and entities, like a LLC or partnership are set up, depending on the individual’s need. After that, we usually get involved. The point of doing this in this way is to get bands in the right position.

It’s not a bad place to get involved. It could be two to three years into the process, when the artist is ready to go to the next level. But there’s definitely times when it would have been better for us to get called in sooner. For example, if a band has been signed, and if they’ve done a tour already, things may have gotten messy. Tours happen, funds are distributed, years go by and tax records get confusing. It’s difficult to recreate what happened in a business after the fact. That’s why I’d rather be involved from the first tour on.

Q: Can you give us some specific examples of mistakes like that made by young bands?

Slipknot

A: Here’s what not to do: Sometimes you go into a club and get paid $200, and they ask for the lead singer’s Social Security number, so they can say they paid someone. After two years there’s a ton of 1099’s with this guy’s Social Security number, and the perception in the eyes of the IRS is that he’s earned tens of thousands of dollars.

The reality is that 99% of those tours are losing money such that no taxes would be due. It’s important to keep track of expenses so they’re not stuck with a large tax bill. In that way, it’s never too early to set up a partnership or an LLC because it’s much easier from a tax standpoint for those things to flow through an entity. Keeping track of receipts and being organized is a good thing to do from Day One.

Another mistake made by young bands is trying to negotiate deals without the input of a lawyer or business management.  These people are just licking their chops when they’re dealing with a band that’s not represented well.  As exciting as it is to have a record deal it could be an albatross for many years if executed improperly.

Q: That’s very valuable. How about another piece of advice?

A: My personal pet peeve is that people don’t protect themselves with insurance. Once a crew person had an insurance policy finish on a Friday and a new one start on a Monday. He was doing carpentry work on a Saturday, got a small sliver of wood in his eye, and that ended up costing him tens of thousands of dollars for that lapse of coverage. We just make sure that all of our bands are covered for health insurance, because I’ve seen too many people – both in my personal and professional life – who were in the hospital not thinking about their health but thinking about their health bills.

In a similar vein, the majority of young band’s biggest asset is there equipment.  For a minimum of cost they can purchase equipment insurance, ensuring their gear is safe from water damage, theft, you name it.

Q: Since you’re minding the money coming in, what are you seeing as the increasingly dependable streams of revenue for artists?

A: The obvious one, and the reason I lucked out having so many metal acts to manage is that in the metal genre touring and merchandise can still be very lucrative.  My son’s in high school; his friends wear Slipknot t-shirts, however, that‘s not necessarily the case for a pop artist like Ke$ha.

Unfortunately, artist royalties from record sales is a 180-degree turn. In my earlier days, people would tour to sell records, and now it’s become more and more prominent that people make records to tour. The reason to tour is because that’s where profit is made, and that lends itself to merchandising. Endorsements and synch licensing are big, as well. It’s hard for an artist to make money on record sales when anyone can download their music for free.

Q: That sounds like an incredible amount of detail that you have to keep track of.

A: I have an incredible staff I work with, and we associate ourselves with great people: great insurance people, great lawyers, great tour managers; it’s a lot to keep track of, but when you work with great people it’s not as difficult.

Part of my job at Sanctuary was the survival of bands, and allowing them to live long enough to break. If RSA has a forte, it’s taking bands, and extending their life longer than other people might be able to.

I think part of this is managing tour support, for example. As record companies make less and less money, it’s tougher to get tour support out of them. So we work hard to maintain budgets, get what’s really agreed upon, and receive what’s needed to extend the band’s life.

That’s true not just for emerging bands, but ones that are perceived as successful as well. A platinum artist may want to have a baby next year, so they’d ask us what they need to live next year without touring. We might say, “The money runs out next November, so that’s when you’d have to go out and tour again.”

Q: You mentioned the intricacies of working financially outside the US, as well.

LCD Soundsystem

A: Most countries used to not have a clue as to how to tax bands coming in and out, but now everyone seems to be on top of it. In the US, it used to be a relatively easy process to get taxes waived, and now it’s nearly impossible. We’ve become experts on the intricacies of what the IRS really expects now, and that knowledge can make a huge difference for an artist at tax time.  We have a good working relationship with people at the IRS and close ties to professionals who handle taxes with bands overseas.  In many cases, the ability to minimize taxes in the US allows foreign bands to go on tour here.

Every country has their own game that needs to be played, and we know how to play the game while working within the legal limits and paying what’s owed – without paying more than necessary.

Q: We ask this a lot, but I’m particularly interested in your perspective: How do you see the music business in 2010?

A: I’m not sure if this is an answer to your question, but it is that bands can still be successful and earn a living in the music business.   If my experience can inspire anybody, it’s that I’ve seen bands go from a $500 gig to a $100,000 gig in a year. I’ve seen really poor bands seriously considering taking a $50,000 publishing advance, holding out a little longer, and then landing an $800,000 publishing deal less than 8 months later.

I admire people who have the guts to stick it out. People who took a big chance on music careers, and then got to the point where a record company is willing to put hundreds of thousands of dollars into them to make them successful , then playing in front of thousands of people. I’ve seen it happen that way: People didn’t give up, and they found success. That’s an amazing process.
– David Weiss