Simon Napier Bell – The manager who watched label’s accounting

It is worth looking at a few comments made by Mr Bell. He was, after all, one of the world’s most renowned music managers for over forty years, and had a reputation for watching record labels like a hawk. Here are some of his vignettes:-

‘The worst thing about being signed to a major was that you lost the freedom to run your life. And though top artists could sometimes re-negotiate an unfair contract, it soon became clear that in the music business you didn’t get out of an unfair record contract to get into a fair one; you get out of an unfair contract to get into another unfair one, but with slightly better terms. Irving Azoff ran MCA for six years. Talking about ‘time-honoured accounting traditions in the record business’, he tells an industry audience of 3,000 audits on record companies. ‘In 2,998 of them the artist was underpaid.’

‘Everyone had the same story. ‘Systematic thievery,’ said the Dixie Chicks in their writ against Sony. ‘Intentionally fraudulent,’ claimed US music lawyer Don Engel. ‘Makes Enron look like amateur hour,’ wrote music journalist Dave Marsh.’

‘When I took over the management of the Yardbirds I had to deal with EMI. In order to bypass the company’s A&R department, I insisted the Yardbirds should produce their own records. I demanded the biggest advance they’d ever paid and the highest royalty - £25,000 and 12 per cent of retail – and they gave it to me. If this was my entrance exam into management, i thought I’d passed with flying colours. I soon learned I’d failed. EMI had simply advanced the Yardbirds their own royalties and included a host of tricky accounting clauses – for instance the artist was only paid on 90 per cent of records sold, and was not paid on ‘over-pressings’, although these were usually sold anyway. I had learned the first golden rule of management – record companies are not to be trusted.’

‘People are so anxious to record, they’ll sign anything...’ said singer Tom Waits, ‘...like going across the river on the back of an alligator.’ They flocked to the majors asking for a chance. The failure rate was still the same. Count the names of every artist who appeared in the Top 100 from 1980 to 1990 – 1,000 perhaps? Multiply by nine and that’s the number who signed to majors and were never heard of again.’

‘As record companies got bigger in the Eighties, everything grew more corporate and less personal. Ron Weisner, who managed both Madonna and Michael Jackson, told me: ‘The biggest frustration is always dealing with the record company – cajoling them, bullying them, charming them, threatening them. They’re totally insensitive to the artist or his wellbeing.’

‘In the UK, Chrysalis, Zomba and Virgin had grown fast and were opening offices in the States. At Virgin they were trying to boost income, waiting for someone to buy them, using age-old accounting tricks. On one occasion I noticed the royalty statements for Japan had arrived with the artist’s royalty less than it should be. It was because the company had first deducted the producer’s royalty of 4 per cent. Lower down on the statement it stated the producer’s royalty as 4 per cent and deducted it a second time. A call to the accounts office set things right but when the next statement came it was calculated in exactly the same way. A quick call round other managers established it was the same on their statements, too.’

‘Artists had to pay their own recording costs yet companies ended up owning the records. ‘The bank still owns the house after the mortgage is paid,’ is how Senator Orrin Hatch described it. Could we imagine film stars having to pay the costs of the movies they starred in and then giving the rights to the company that distributed it?’

‘Artists also had to pay a packaging deduction of around 15 per cent. This, despite the fact that packaging rarely cost more than 5 per cent. The remaining 10 per cent was enough to pay record company’s entire cost of manufacturing the record. All in all, it meant an artist who sold 200,000 copies of a first album would still owe the record company although the record company had made a profit of a million.’

Does any of this sound familiar?