Rockin' The Law

An Exclusive HITS Interview with Don Passman
by Joan Tarshis

When legal eagle Don Passman was at the University of Texas, he played lead guitar in a band called Oedipus and the Mothers. When he gave a demo of the band to legendary record producer (and family friend) Snuff Garrett, the producer smiled and said, "Don, go to law school," which is exactly what he did. In fact, he went to Harvard Law School.

Passman has specialized in music business law for over two decades and currently practices with the Los Angeles firm of Gang, Tyre, Ramer, & Brown. His impressive client list reads like a music business "who's who," including industry giants Janet Jackson (for whom he negotiate a record-breaking contract with Virgin), R.E.M., and other major artists.

Why Passman listened to Garrett's advice is simple. "I love creative people," the erstwhile guitarist answers in a heartbeat. "I love the match between creativity and commerce, where there's been a tension for hundreds of years. I love the way they intersect, and the process of getting those two worlds to relate to each other with their very different needs. When you're a music lawyer, you're in the game with artists from their first deal to superstardom. I'm still excited by music and I love being around it."

Passman also teaches a course in the music business at USC, which prompted him to write his much-celebrated book, "All You Need to Know About The Music Business," which has become a primer in understanding the industry side of the pop world. Now in its 22nd printing, the book instructs laymen and veteran alike to the fine art of deal-making and the subtleties of today's creative legal process.

Shortly before he lulled her into a deep sleep, HITS' court reporter Joan "Pine" Tarshis spent an hour with Don...the first time someone from this magazine has done so without getting billed.

What duties do you perform for an artist as his legal representative?

Most of my time is spent negotiating and drafting contracts, dealing with whatever is going on in an artist's life - whether it's directly related to their entertainment business or their personal life. Entertainment or music lawyers understand the industry; they know what deals are going on around town, because they do so many of them. So, we have a real sense of what happens, and therefore we're involved in shaping the deals and structuring them.

What was your favorite deal?

Probably the deals for Janet Jackson and R.E.M. because the artists were at a point in their career where we could change the rules and do things that you can't do for a mortal human [laughs].

What do you think about the seven-year statute Toni Braxton, Don Henley and Luther Vandross have tried to use to get them out of their label deals?

It hasn't historically affected the business because none of these cases has ever gone the distance. They've all settled somewhere along the road. I think the record companies prefer it be a little vague because nobody knows quite for sure what you can or can't do under the seven-year statute.

Much of it was toned down about eight or nine years ago, when the record companies passed an amendment saying, even if you get out of the deal, if you haven't delivered all the albums you promised, then you're responsible for damages to the record company for the albums you didn't deliver. So it becomes difficult for the artist to really use the statute in an effective way.

What do you consider the biggest mistake new artists make business-wise?

Getting into long-term deals without any sort of ability to get out based on lack of success. That's the biggest mistake, and it happens to big names as well as less experienced artists. Bruce Spingstein had a problem with that; I think Billy Joel did, also. What happens is, they get tied up for a long period of time with someone and there's no guarantee that person is going to perform.

Do you recommend signing a publishing deal before or after you already have a record deal?

I treat it on the basis of whether the artist needs the money. If they need money, then yes, they should make a publishing deal. If they don't need the money and are willing to gamble on their success, then keeping a bigger piece of the pie will ultimately pay off much greater than giving it away.

On the other hand, if you want to hedge your bet, or guarantee your success, then you should make a publishing deal and let somebody else take the risk. A good publisher can really enhance a songwriter's value and skills.

Would you prefer your kids play in a rock band or become attorneys?

It depends on their passion. I mean, if they're passionate about music and performing, then they have to chase it.

Even knowing what you know about this business?

Yes - I would never stop my kids from chasing their passion.

Maybe you feel that way because you're used to working with successful people.

That's true, but I was in rock bands when I was in high school, college and law school. I definitely know the other side of it. For me, it wasn't much of an issue because nobody wanted to sign us.

What kind of bands were you in?

Rock bands that played fraternity parties, that kind of thing. The one I had in college was Oedipus and the Mothers, a classic punk band from Austin. The one in law school was the Rhythm Method.

Covers or original material?

Oedipus actually had some original songs and made some local records. The other band played covers.

Do you remember any of the originals?

Of course. One was called "How it Used to Be," which turned up on a bunch of Texas '60's punk band compilations. There was also one called "Lonesome." I played lead guitar and sang background. Singing was never my strong suit. I played a BB King-type Gibson guitar, an ES 335 TDC. I also play five-string banjo, piano and accordion.

The accordian had to be your first instrument.

You're absolutely right. There's this cool group in San Francisco called Those Darn Accordions. They have a great T-shirt and on the back it says, "Accordions don't play 'Lady of Spain'; people do." I love to wear that T-shirt.

Did you always want to be a music lawyer?

I didn't know there was such a thing until I got to law school. I thought I was going to be a tax lawyer. I started with a tax firm, thinking I would do tax/entertainment work, and then took a class at USC on the music business - the class that I now teach - and got so excited and turned on, that I said, "This is fun; it's not like working." So I switched jobs and came over here to become a music lawyer.

People must send you a lot of tapes.

Constantly. Unfortunately, I don't have the time to listen to them any more. Since I wrote the book, I probably get three or four a week. What I do is keep a list of young lawyers who are willing to shop tapes and I refer the people that write to the young lawyers.

You’ve mentioned the best part of your job. What's the worst part?

Like any job, there are parts that become routine. Many of the clauses and the deals are the same and you go through the same arguments back and forth with the same people. When I started doing this, record contracts were 20 pages long and now they're over 100. So it has gotten more complex and more labor intensive. Also, things don't always have a happy ending and that's not pleasant. Nobody likes delivering bad news, having things blow up or not work out.

Some music lawyers have been criticized for having a conflict of interest in handling both record company and artist. How do you feel about that?

Conflicts of interest are a bad thing. Since I'm in a boutique firm, it's a little easier for us to avoid them. I ordinarily do not work on the label side because it involves too many conflicts with the artists that we represent.

Not that I can avoid conflicts completely, because you can't. It's a small industry, but I try to minimize them. I stay away from doing record company business, though I've taken a few label clients over the years. When I can't avoid it, I get a conflict waiver.

When I started out, I did almost all record company business, but I eventually decided to go to the talent side. I like creative, artistic people - I felt that talent needed strong representation to watch out for their rights.

Has the art of negotiating changed much since you started?

I don't think so. The business has become more sophisticated. I mean, 20-30 years ago, this was primarily a street business and it still is to a large degree. Back then, we were dealing with smaller companies that hadn't been gobbled up by multi-nationals. But, I'm not sure the art of negotiating has changed since the beginning of time. I mean, didn't Abraham negotiate with God about Sodom and Gomorrah?

How much of a rivalry is there between music business lawyers?

It doesn't get too mean-spirited unless somebody happens to have particularly upset somebody that week. But if an artist has left their lawyer and everybody wants that artist, there's going to be competition.

How is it possible to be a lawyer and not play golf?

Well, actually, I like the kind with the little windmills.

The availability of music on the Internet is certainly going to open a can of worms.

Yes, but that's a way down the road. Ultimately, it's going to be horrible in the sense that, there are many people on the Internet who genuinely believe that copyright laws shouldn't exist, and that intellectual property should be free for the taking. These are the people who would be thrilled to take an album, the day it is released, put it up on the Internet and let anybody who wants to, copy it for free. It's a serious issue. At the moment, it's not too important, because it takes two hours to copy an album and the quality is not that great. But that's going to change with technology. The issues are pretty serious.

What are your views on large advances vs. back-end money?

It's a trade-off. The more you take in the way of a guarantee, the more you're going to give up on the back-end. If you have an enormous amount of bargaining power, then, ideally, you try to get both. But most everybody who wants to take the larger upfront guarantee is willing to shave some of the backside to do it. Sometimes, when an artist is at the other end of their career and there aren't the large guarantees to be had, they'll make very substantial back-end deals and just say, "The company doesn't have to take any risks, so give me a bigger piece."

What happened to the trend of lawyers being hired as record company presidents?

It didn't work out very well; that's why it's not a trend any more. I can't be sure, but my guess would be that it's because lawyers are trained very well in the business side of making deals, but are not trained creatively - other than Clive Davis, of course. They certainly aren't trained in any of the rest of the business - marketing, promotion, imaging, distribution and all those other things that go with making records happen. And for whatever reason, they don't seem to have adapted to it as well, unlike managers, for example. Tommy Mottola understands exactly what it takes to make a hit record. As do people who have grown up inside a record label and know the company-side top to bottom. While I've never been on the inside, I'm told it's very different picture from what I've seen representing record companies.

Any interest in running a label?

None. It's a 24-7 job. I like my independence. I like being a seller rather than a buyer.

What are the differences between jazz and classical deals and a rock deal?

Jazz and classical are very different. Basically, they're just smaller markets. A huge-selling classical album might be 50,000 copies worldwide, whereas a pop album could be millions worldwide. Classical albums are very expensive to record, too, because you've got orchestras - It's a whole different set of economics. Jazz albums also don't sell a lot. Other than breakthroughs and the crossovers, they may only sell 50-100,000 copies. So the deals are much smaller.

Classical deals are also different. Classical artists, for example, have been historically paid without regard to recoupment of recording costs, but they're paid at a lower rate.

What about deals for songwriters like Diane Warren?

There aren't very many pure pop songwriters left, if you think about it, although Diane's obviously the premier example. Most of the songwriters around these days are producers or artists in their own right. Other than country, it's difficult to get a deal for a songwriter who is just a songwriter, as odd as that may sound. The publishing companies don't want to put money up unless they know there's a good chance a record is coming or the writer has some connection that will mean the material is going to get recorded.

Over the last decade, licensing music for movies has become big business.

It's pretty complicated, too. Every song that goes in a film has four or five deals that come with it, at a minimum. Meaning the record company, the artist, the songwriter, maybe a composer, maybe a producer. Then there might be multiple producers, multiple writers and multiple artists. It's very complex, labor-intensive world.

How difficult is it negotiating a contract for sampling?

Sampling is one of the most difficult, frustrating things that was ever invented. The reason I say that is the following: When you go to clear a sample, the first thing a sample owner says is, "I need to hear how it's used in the song." That means the sample is being cleared when the song has already been recorded. Therefore, how much bargaining power do you think you have? Also, sample owners have now become extremely aggressive about wanting pieces of everything, both the artist royalty, if they're on the master, plus pieces of the song. They also want advances.

I had a situation once where three sample owners were demanding more than 100 percent of the song. Because each one had their own piece - one thought it was a third and one thought it was 40 percent and so on - pretty soon we were over 100 percent.

Do you think the size of album advances has gotten out of hand?

I'm trying to think how to answer that. It's become pretty risky, but if you're asking me, as an artist representative, then the advances are too low [laughs]. I'd be foolish not to take it as long as the companies are willing to pay.

What is one thing you would change about the business if you could?

I would make record contracts real short. I'm convinced most of what's in these forms is useless and repetitive and not necessary. The whole thing could be done in a very few number of pages. It has just become too wordy and what happens is, every time something new comes along, they don't revise their forms - They just add another five pages to cover it. It's silly. We're all wasting time going through these long contracts for each band, 90 percent of which are never successful.

  

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