|Andrew D. Tenenbaum, Esq.|
Lectures on the Economics of Live Touring
At Los Angeles College of Music
Andrew D. Tenenbaum has decades of management experience with clients such as comedian Terry Fator, producer Larry Brezner (“Arthur”, “Arthur 2” and “Ride Along”), the Frank Zappa Estate, Elvis Presley Enterprises, comedian Chonda Pierce, writer Beth Sherman (“The Ellen DeGeneres Show” and “The Queen Latifah Show”), writer Anthony Caleca (“Tonight Show”, “The Talk” and “The Kelly Clarkson Show”), writer Andrew McElfresh (“Tonight Show”, You Bet Your Life With Jay Leno” and “Scary Movie II”), X-Games skateboard medalist/actor Paul “P-Rod” Rodriguez, and many, many more entertainers and athletes.
In addition, Mr. Tenenbaum has been a founder, operator and
investor in multiple start-up private companies, has an extensive history as a
producer and executive producer in film and TV, and he is a licensed attorney
with a sharp entertainment litigation practice.
MEET ANDREW TENENBAUM
BOSCHAN: What are the three most important things that you do for clients?
TENENBAUM: That may be one of the best questions ever asked.
BOSCHAN: Thank you. You may have one of the best answers.
TENENBAUM: The number one thing is to help clients to realize their creative dreams. It's not about a quick hit or making the news on a given day. But rather to help them sustain a career and reach goals.
Number two is to be honest, fair and reliable. Artists need to know you have their back and are looking out for them.
Number three would be to take care of business so artists can focus on the art. One of my mentors, Buddy Morra, hung a sign in his office that said, “Don’t Embarrass The Office.” So, add that one to the list.
BOSCHAN: You have such a multifaceted career. You are an attorney, a talent manager and an entrepreneur… who does each of those things well! Am I missing anything? (e.g., Are you an architect too? haha)
TENENBAUM: Not an architect but I do have an amazing wood workshop in my garage that is my hobby.
BOSCHAN: A true Renaissance man.
TENENBAUM: As to your question, you have the list correct. But did I also mention that I produce film and television? All of those things work harmoniously together.
Being a talent manager is the “mother ship” that gives me a great reach of relationships, an understanding of how artists think and function, how the pieces of production come together and the inner workings of the sub-genres of the entertainment business.
Of course, the lawyer side greatly informs putting deals together and vice versa.
And the entrepreneurial endeavors are the icing on the cake.
BOSCHAN: Do you find you can focus on all of these occupations simultaneously, or do you prefer to take breaks and focus on them serially?
TENENBAUM: It's all simultaneous. It gives me great
flexibility. If I meet an artist or rights holder that needs management I
can go in that direction. Sometimes it's about legal advice and I can
work it that way. Or sometimes the opportunity is more about investment
or a start-up. I can also take on a one-off deal as a lawyer, or bring an
IFTA or other arbitration for a profit participation.
ANDREW TENENBAUM'S LEGAL PRACTICE
BOSCHAN: How have your varied career pursuits informed your practice as an attorney?
TENENBAUM: There is no substitute for actual hands-on experience to inform the practice of law. I have spent tens of thousands of hours on the road, at rehearsals, at shows, recording, producing and working with artists in all kinds of other ways. Then, when an issue arises it’s a tremendous benefit to have had the firsthand boots-on-the ground experience to know how things work in order to put together deals or resolve conflicts.
BOSCHAN: How does your view differ from others when you are evaluating a potential case?
TENENBAUM: I think I have a much more practical view of things, that comes from experience like I mentioned above. Not everyone has that. Too many lawyers just know what things look like on paper and when they go bad. Go spend 30 days a year of more on a tour bus, or months on a set in 90-degree weather in Tennessee, and folks will understand a lot more.
BOSCHAN: How do you differ from other entertainment litigators who specifically do profit participation work, which is one of your strong suits?
TENENBAUM: There are many very good lawyers out there doing great work. My differentiation is that I prefer contingency work. It aligns my interest 100% with the client. If they don’t win, I don’t win. I don’t get paid for bad settlements. I will take that risk and bet on myself every time.
BOSCHAN: In litigation we often look backward in time to claim past damages for clients. How far back can you usually go?
TENENBAUM: There are normally three limitations. First is the statute of limitations, which is the law about how for back a claim came be made. In California for example its normally four years for a written contract. There is some room to maneuver as to when that four years begins. Second is if there is a clause in the contract that limits the amount of time a client has to object to a statement that accompanies payment. Third is also in a contract and that would be after the period of time to object to a statement, how long a client has to file an action. It’s very important to track these things and if you are going to challenge a statement to get a terrific auditor retained. Am I allowed to mention Cedar Boschan for this last suggestion?
BOSCHAN: Thank you, Andrew. We are pleased to be of service.
Do your damages claims often relate to intercompany fees deducted off the top from the foreign affiliate receipts reported to our clients?
TENENBAUM: Yes, this is a common claim. This happens where a distributor charges a basic distribution fee and then hires its affiliates as a sub distributor. The artist ends up being charged twice by the same company and all the money goes into the same pocket. I had a case once where a European distributor was aggressively defending an intercompany distribution fee claim that I destroyed when we provided evidence that both entities had their name on the same door. Not all of them are that easy, but the claim is quite common.
BOSCHAN: What are some of your challenges collecting your clients’ fair share? Can you offer any tips?
TENENBAUM: Shock and awe! When it becomes clear that the distributor is not going to settle reasonably, then move quickly and aggressively to file an action. And don’t just go in with a summons and be seen as settling in for a long-term case. Hit them hard from the beginning. File the complaint along with a motion for summary judgment where possible, be aggressive and expedient about discovery and utilize arbitration where possible.
BOSCHAN: I love shock and awe!
To make arbitration over foreign distribution profit shares worthwhile, what minimum level of foreign earnings and/or what kind of pictures/projects are we talking about in which territories?
TENENBAUM: If client and lawyer are smart about the elements of
the claim and realistic about settlement potential it’s possible to bring cases
in the mid five figures. For example, if it’s an IFTA claim and the
distributor does not want to end up in bad standing by defaulting at IFTA, they
will need to pay real attention to the claim. They don’t want to be barred from film markets. Lawyers
who are efficient and aggressive can get good settlements in cases this
way. And often it’s not about just one case for smaller amounts, but
rather bringing a variety of cases across a film or portfolio the total of
which is cumulative equivalent or more than one very large case.
ANDREW TENENBAUM: VIEWPOINTS ON THE ENTERTAINMENT BUSINESS
BOSCHAN: What are the major income sources for your clients and how is that changing over time?
TENENBAUM: Income sources have changed dramatically. Take for example film producers. Ten to twenty and more years ago there was the same theatrical income as there is now, except for this pandemic. However, in those days there was great money to be made from distribution windows at pay cable, basic cable, and DVD. Broadcast networks for movies of the week had largely ended by then, at least in the USA. That’s all gone in relative terms at least, and in addition to theatrical it’s the various forms of video on demand, namely subscription and transactional. Some folks made fortunes on DVDs…anyone own a DVD player except to watch the screeners the guilds send out (which are quickly being replaced by streaming links)?
BOSCHAN: To make a living, how many fans does an entertainer need? 1,000 (per Kevin Kelly) or 100,000? Or what questions should an individual be asking to determine if a project is financially viable.
TENENBAUM: The answer very much depends on the genre the artist works in. I don’t agree that the 1,000 that the article talks about is anywhere near close to what is needed for an artist on a national scale. A jazz musician can make a living with probably 500k+ followers. Versus a pop artist needs millions to tens of millions to sustain touring, recording and everything that goes with it. And there are many cases in the middle. Plus, there is a key factor of engagement which may be more important than fan count. An artist with a highly engaged social media base of 1M is more viable than an artist with 10M that has casual fans that don’t engage much.
BOSCHAN: In the entertainment business, what is less important now than it was five years ago? And how will the coronavirus pandemic permanently change the entertainment business?
TENENBAUM: The pandemic has changed a lot of things. One I would like to discuss is “appearances”. There was a time that it was critical to have great looking offices, a prestige address, lunch at the right places, etc. Now that we all work from home due to Corona, in many ways I feel that it has leveled the playing field. Many folks on those Zoom calls are wearing sweats and t-shirts, the kids are taking in the background and the dog is barking. But we have learned to look past all that and focus on the person. Not that I am giving up my offices any time soon, but I like that appearances are at least a lesser part of the equation.
...Anyone want to buy a closet full of button-down Brooks Brothers dress shirts?
I think for the next phase after the pandemic people will become much more deliberate in their out-of-the-home activities. Going to the movies, for example, will be planned to a greater extent. Concerts will be, unfortunately, less in volume and higher in a fan’s scale of importance. Informed people are taking about more “curated” activities.
BOSCHAN: What are some of the current companies in entertainment who you think are getting it right and why?
TENENBAUM: Just to give a few examples, right now at the top of the list is Netflix. Ten years ago, they were mailing DVDs to my house, so we did not have to go to the store to rent them. Then they figured out how to ditch the discs and stream the movies. Then they figured out how to produce and distribute some of the best quality content that an entire family can watch for the cost of a single movie ticket. They deliver a great product at a very fair price.
Disney+ is doing the same and now with the bold goal of delivering ten series based on Star Wars, again for a very affordable monthly price.
Spotify is another one. For a very fair monthly price a family has access to virtually every song ever, on demand, with an amazing set of tools to refine song lists and playback options. Again, for monthly price of less than what a CD cost back in the day.
BOSCHAN: What are some of the key opportunities for entertainers today?
TENENBAUM: The biggest opportunity today presents the biggest issue. Everyone has - at their fingertips - distribution to the entire world. 4.4B people have access to the internet. 2B have YouTube. The key opportunity is how to break thru all the noise and be heard. How to get your material seen and hear.
Charli D’Amelio is a 16-year-old who has 8.6B likes on Tik Tok and no one heard of her just a few years ago. If you add up everyone who ever saw a concert by Miles Davis, Count Basie, Elvis, Michael Jackson, David Bowie, The Beatles, Bing Crosby and Sinatra it won't be a fraction of that.
One artist to look at is Laura Clery. Laura has 13M fan on Facebook. She puts out videos multiple times per week and gets tens of millions of views. Some say she is a modern version of Lucille Ball. I think if Lucille Ball were alive today, she’d be doing what Laura is doing.
Chonda Pierce is a dear friend and client I work with. She
is a terrific study for young artists that want to break thru, to see how
Chonda took advantage of each opportunity as they presented themselves to
evolve a career, from VHS, to DVD, to theatrical documentary, to streaming and
LIVE ENTERTAINMENT INSIGHTS FROM ANDREW TENENBAUM
|Andrew D. Tenenbaum, Esq.|
Lectures on the Economics of Live Touring
At Los Angeles College of Music
BOSCHAN: You were kind enough to guest lecture on the economics of the live entertainment business when I was teaching at Los Angeles College of Music. The students thought you were the best speaker, by the way! I had them read this op-ed in Billboard that you wrote as well about dynamic ticket pricing and VIP packages.
At this juncture (during a coronavirus pandemic where much of the live entertainment business is shut down) and looking into the future, in which directions do you think dynamic ticket prices and dynamic fan experiences are evolving?
TENENBAUM: Thanks for the kind words. Dynamic pricing is and will be the future. It makes total sense. Like I wrote in the article, you can’t mess with the law of supply and demand, but if you try that’s when the middlemen step in a take income away from the artists because the marketplace was not real. That is the Don Corleone scenario I wrote about. Dynamic pricing is the natural outcome of the supply vs. demand equation. It will become more of the norm.
BOSCHAN: You had the foresight or luck to divest Future Beat - your VIP package business - before the COVID-19 pandemic (WME bought it). Would you consider getting back into the live music business again in the future and under what circumstances?
TENENBAUM: Live music will always be a terrific business. I am working on a new venture. It's going to take some time till things can be safe for the artist and audience and de-risked for the investor.
BOSCHAN: Do you think virtual live (or prerecorded) event experiences are priced below-market, just as live experiences were? (Except there aren’t scalpers to resell tickets because there is unlimited supply of underpriced access to virtual live entertainment events.)
TENENBAUM: The virtual live business is too young to really know. $20 seems to be a sweet spot for a lot of these offerings. But it will take time to find out where the right price lives.
BOSCHAN: Any tips on how entertainers can better or more dynamically monetize their virtual appearances?
TENENBAUM: There is a nice set-up offered by Vye.live and others that utilize large video boards that allow fans to pay a VIP price to be seen in a virtual audience. Merchandise bundles and personal Zoom sessions are also being offered.
BOSCHAN: Are there unique challenges for comedians in going virtual? (My favorite local comedy show – The Secret Show – has not gone virtual. I wonder if it is because some of the comedians have granted exclusive streaming rights to other companies and, whereas they could previously perform live, they are restricted from streaming their performances, or maybe they just don’t want to because live is how they were testing their material and it is hard to get the same audience feedback virtually.)
TENENBAUM: Comedy presents a very different situation than music. Comedians need the real-time feedback of a live audience. Just try to watch what some have tried on television specials without audiences. It’s difficult for them to find a comfort zone and the viewer sees it all as off balance. It doesn’t deliver. The virtual audience I mention above is a good solution.
LIFE HACKS FROM ANDREW TENENBAUM
BOSCHAN: When should an entertainer fire his manager?
TENENBAUM: I am a strong believer in loyalty and that good things flow from that. David Steinberg is a manager I worked for, for many years, and a mentor. David is a great teacher and one of the funniest people on the planet. He has managed Billy Crystal for 50 years. Billy is one of the greatest talents I have ever seen. Billy’s career has benefited tremendously from having David at his side, watching his back and advancing his career. That’s what artists should have in a manager. And if an artist does not have that, the next step is to talk to the manger. Don’t expeditiously fire him or her. The client-manager relationship is a very special one. Always try to make it work. But there are times when it is appropriate to move on.
BOSCHAN: What software and services help you run your life?
TENENBAUM: Is red wine an appropriate answer to this question?
BOSCHAN: What is the best $200 dollars (or less) that you have spent in the last year? (i.e., what is the small purchase that gave you the greatest joy?)
TENENBAUM: Is red wine also an appropriate answer to this question?
BOSCHAN: What are the key metrics you rely on to gauge your success?
TENENBAUM: I learned a great lesson from my dad on this one, Stephen Tenenbaum, who has had a 64-year career as a business manager, royalty auditor, manager, and producer. He always said to keep the clients happy and the success will follow. It’s a good non-metric. It works.
BOSCHAN: Your father is such a legend in the entertainment business. Three of my mentors – Fred Wolinsky, Linda Becker, and Steve Sills – worked for him and I am delighted to be working with him on a project right now. Why did you choose to pursue your law degree (and not accounting)? How has having a father in the world of accounting and in entertainment helped or hindered your career path?
TENENBAUM: Actually, I have a degree in accounting. My father has been the best mentor and teacher. He has a vast knowledge of the industry and its history that reaches back to 1957, when Elvis was first getting started and before the Beatles, to the present with streaming, hip hop, social media influencers, etc. There are very few people in the industry who know what he knows. I call on him frequently for advice on things. And he now calls on me… that is how I referred him to you.
BOSCHAN: I can't believe you also have a degree in accounting. Wow - I am so impressed!
CONNECT WITH ANDREW TENENBAUM
BOSCHAN: Who should definitely contact you? Who are your clients and how can they find you?
TENENBAUM: Artists, rights holders, producers, and investors. Most anyone with a need for professional representation in the entertainment industry. I am not shy about saying when I don’t have the ability to do something and helping direct someone to the expertise they need. A lot of the business comes from referrals, but I also have my website, www.cmpent.com.
BOSCHAN: Thank you for teaching us so much, Andrew. I especially encourage profit participants to reach out for your help with foreign and other damages claims!