Breaking Down The Expenses That Come With Being An Artist

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In her practically 20 years of working within the leisure {industry}, enterprise supervisor Kristin Lee has seen it evolve in a number of methods. From stacks of vinyl to fast streams on singles, from iconic MTV moments to viral YouTube and TikTok clips, Lee has been there by means of all of it.

As one of many {industry}’s prime enterprise managers, Lee has been famous as one to observe by The Hollywood Reporter and named certainly one of Billboard‘s Prime Enterprise Managers of 2022. Lee has additionally witnessed the implications of artists not planning nicely financially, however luckily, she’s helped folks get again on monitor. She has additionally shattered glass ceilings within the {industry}’s boys’ golf equipment, and prioritized creating alternatives within the enterprise.

Together with her administration agency, Kristin Lee Business Management, Lee is dedicated to serving to entertainers make sensible monetary selections and manifest fruitful endeavors. She and her women-dominated crew additionally attempt to verify artists don’t get trapped in unhealthy partnerships.

We caught up with Lee on a January morning, and she or he has an excellent feeling in regards to the 12 months forward. Having skilled the {industry} throughout a number of eras, she solutions all of the questions you could have had relating to an artist’s complicated funds.

What does the day-to-day for you at KLBM entail?

We deal with something relative to the day-to-day funds of our shoppers. So it might be touring artists, producers, songwriters, we do some movie and TV as nicely. However largely, dealing with something which may contact their enterprise or private life. So accounts payable and receivable, issues with insurance coverage, we additionally deal with tax work. And on the non-public facet, there is likely to be some leeway into some investments and dealing on methods round that. When you can consider one thing that touches their cash, we’ll most likely have a deal with on it.

You’ve been working within the {industry} for nearly 20 years, and also you’ve seen it by means of many adjustments, vinyl, CD, streaming, and so on. With all these new avenues for artists, would you say it’s simpler for an artist to slide up? (Maybe placing cash towards one avenue, when they need to be placing cash towards one other?)

I believe what artists have to do is figure with their crew – a enterprise supervisor can be nice on this scenario – and take a look at the energy of varied revenue streams that they’ve. So what are their followers leaning into? What are their followers consuming? Are they actually heavy YouTube customers? Or are they Spotify streamers? Or do they actually get pleasure from vinyl and amassing tangible music merchandise? It’s about determining what you’re actually going to excel at, and giving your followers what they need essentially the most.

The place do artists make most of their cash today?

I’ll say for the reason that pandemic, I believe much more artists have gravitated in the direction of model offers and partnerships, as a result of it’s one thing that they will nonetheless be inventive with and faucet into, regardless that they weren’t in a position to get out on the highway. However relying on the artist, in case you’ve obtained someone who’s racking out platinum data, then their file royalties of their publishing are going to be main revenue streams for them. Sync licensing has additionally been a giant one. We’ve obtained artists which may not be essentially the most well-known artists within the land, however they do rather well with sync licensing. They may have a bunch of stuff in TV and commercials and issues, and there might be some actually good paydays for these as nicely.

I believe an excellent instance of artists creating wealth off of sync licensing got here final summer time, when Kate Bush’s “Working Up That Hill” made a resurgence after it was featured on Stranger Issues.

Yeah, precisely. And it’s not solely the charge you get for the sync license, but when it triggers one thing like what occurred with Kate Bush and Stranger Issues, I imply, she most likely made extra money in her publishing and file royalties on that monitor than she’s possibly ever made.

What are some bills that artists must account for that non-industry folks don’t typically take into account?

I believe insurance coverage is at all times a giant one. And all of our shoppers carry fairly complete insurance coverage. The larger the artist, the larger the tour, and the extra issues that you simply’ve obtained to cowl. We will’t mild pyrotechnics off a stage with out that being closely insured. No venue will allow us to do this until we’ve obtained sufficient protection to verify all the pieces can be nicely taken care of if one thing have been to go improper. Issues occur on the highway, and so we work actually exhausting to ensure that the artist and the followers are also protected within the occasion of some type of emergency. And in addition numerous these companies, artists, writers, they’ve obtained payroll, and so they’re arrange very equally to some other enterprise, it’s simply that the service they supply is clearly totally different and extra area of interest. There’s this distinctive perspective of getting this little company that bops round state-to-state or over to totally different international locations. And that creates tax results in all these totally different territories that they traveled to as nicely. In order that’s a giant a part of what we do. You don’t take into consideration these little tiny particulars once you simply see them from the surface.

What do you assume is the most important mistake artists make after they begin blowing up?

All people says the artist will get their large advance, and so they simply begin blowing cash, left and proper. It’s loads simpler to scale your way of life up than it’s to scale down. In order that’s a simple one. However I believe one which’s extra essential to speak about is simply the mentality of it, and never dropping the humility and the place you got here from, and never getting caught up with the improper concepts about what all of it means. A variety of artists actually begin their careers to create and so they have this imaginative and prescient, and so they have a message that they need to share. And it’s simple to lose sight once you begin to develop, and also you get increasingly more folks in your ear, and there are folks dangling extra money in your face for this and that. I believe we have to actually ensure that folks aren’t dropping sight of the why – why they began to start with – and it makes positive that they’re staying on monitor with who they need to be and the message that they’re making an attempt to ship.

What’s a 360 deal, and why ought to artists attempt to keep away from them?

My largest concern usually with a 360 deal is the label taking cuts of touring revenue. Touring is already actually costly for lots of artists. When you go to a giant present, you see the manufacturing, the lights, the video partitions – these are actually costly to construct. They’re actually costly to function and so they’re actually costly to hold round city-to-city each single day and it requires huge quantities of personnel and vans, and all these items.

So with a 360 deal, when a label needs to take a minimize of your touring – in case you’ve obtained a label that’s coming in and taking one other 10% off the highest plus administration taking their minimize, enterprise administration taking their minimize, the brokers are taking their minimize, artists are left with nothing, plus taxes, in order that’s a giant concern. But in addition [a 360 deal] prohibits you from having choices. There are numerous different firms which may have merch offers which can be higher fitted to sure artists, relying on what they will supply for the cuts that they’d take. However I believe touring is actually the kicker on that one. Whittling down what someone could make on the highway? It’s already robust sufficient as it’s.

What recommendation do you give to artists after they signal their offers?

All the time discuss to everybody in your crew and have all people evaluation agreements, have conversations about what sure issues imply. I at all times take a look at issues from a monetary side after I’m reviewing these for my shoppers. What do the advances imply? What sort of budgets are you getting for every file? Are these recoupable? What does the label cowl? After which, actually ensuring that when I’ve an concept of what I’m anticipating, out of a contract from these standpoints, that the lawyer is ready to manipulate my phrases correctly, in order that it reads in “legalese,” in order that our shoppers are protected. It’s a collaboration of efforts to ensure that what you need and what you anticipate are literally what’s written down and what finally ends up getting signed.

I noticed a video Cardi B posted just lately. She had tweeted speaking in regards to the worth of lettuce and the way it’s elevated, and other people commented saying ‘Aren’t you price $40 million?’ She responded saying, ‘While you turn into profitable, when you might have cash, you’re going to go broke, since you’re not budgeting.’ Have you ever seen this occur to artists earlier than?

I’ve seen it occur. I typically find yourself getting shoppers that didn’t price range nicely, and I find yourself having to return in and assist them repair their monetary lives and get them again on monitor. But it surely occurs on a regular basis. It occurs loads with actually younger artists making an attempt to maintain up with the Joneses. There’s additionally not numerous schooling and monetary literacy, and once you’re younger, you are feeling invincible, such as you’ll maintain making this cash ceaselessly and ever, and that’s simply not the case. As an artist, you don’t have any concept what your profession trajectory is likely to be. Inflation is one thing that individuals are most likely not budgeting for. You’re seeing the costs of issues go up, however are you actually factoring that into your day-to-day price range and your money stream administration?

On that very same notice, what’s the distinction between an artist’s internet price and the amount of cash an artist has at any given time?

They play collectively at any given time, however your internet price goes to be all the belongings that you’ve, towards the liabilities that you’ve. You’ll be able to have a bunch of money within the financial institution, however you can even be in debt underneath mortgages and automotive loans and all the pieces, so your internet price may be nothing. It’s extra frequent than you assume, the place individuals are over-leveraged, and so their internet price is type of squandered. You may need a $5 million home, and a bunch of automobiles, however in case you owe a bunch of cash on them on the similar time, and also you’re paying these month-to-month, then there’s a stability. Clearly, credit score’s required – lots of people can’t simply go pay money for a automotive or a home – so that you do want to make use of these issues properly. Simply because you’ll be able to afford a million-dollar home doesn’t essentially imply that’s the one you must get.

What are some issues that an artist should spend money on?

I consider that artists should spend money on themselves, and the folks round them. I do consider you get what you pay for, and never within the sense that you have to be egregious and overspend and validate some type of ridiculous expenditures to make your self look greater or flashier, however extra within the sense of constructing positive that you simply’re taking excellent care of your self, and that you simply’re doing issues that higher you as an artist in your profession. I really feel very strongly that on the subject of your supervisor, your agent, your corporation supervisor, your lawyer, or your publicity groups, you actually do get what you pay for. And once you’ve obtained a crew that feels taken care of, they’re additionally going to offer that proper again and make investments deeply in you.

What’s an important factor you’ve realized throughout your years within the enterprise?

Be good. Don’t be a d*ck. I do know for a proven fact that numerous the folks that I work with really feel the identical manner. We actually gravitate towards individuals who function in a form and respectful house. Artists as nicely. Tensions undoubtedly run excessive on this enterprise typically, and I can acknowledge the distinction between somebody having a tough time versus somebody simply being a jerk.



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