Article: Attorney Cross: A music business freedom fighter by Jennifer Grassman

This week is the debut of my brand new column, The Business of Being Diva, and I wanted to start this adventure in journalism off with a big bang! So, I sought out notorious entertainment law attorney Leslie Warren Cross. I call him notorious because Cross has developed a reputation in the music business for being scandalously pro-artist and something of a thorn in the side of major labels.

I had the honor a few weeks ago to attend a seminar hosted by Cross and was struck by his knowledge of the inner-workings of the music industry. He has a warm, friendly bearing and a zealous fervor for his convictions. So much so that I would venture to dub him “The Patrick Henry of The Music Business.” That impression in mind, I decided to ask Attorney Cross a few loaded questions, and see what he had to say! The following is an unabridged, uncensored transcript of Cross’ info-packed responses to my inquiries. Read slowly, and soak it all in!

GRASSMAN: You’ve worked with some major labels in your time and some pretty famous artists. Recently, you hosted a conference in Houston geared toward independent artists, and you encouraged them to remain independent. Why? It seems like doing everything yourself from scratch is so much harder!

CROSS: This is a great question and one that I am asked quite often in reference to what I have preached and advocated for such a very long time; why it is such an important decision for an artist or songwriter to maintain independence over signing with the conglomerate-controlled music machines. Let me start my response by making the following observation: One of the main problems I deal with day in and day out is encountering artists, producers, bands and musical groups who have what I argue is a wrong view of themselves. To say it more directly, I encounter artists who, more often than not, see themselves as employees and not as owners.

Now for me, the reason the “I am an employee” view is so systemic within the music community is due to the constant negative conditioning and forces that beat artists, bands, musical groups and songwriters down into having one or all of the following attitudes and beliefs: (i) I’m inferior, (ii) I’m incapable, (iii) I’m incompetent, (iv) I’m not able to, (v) I’m very limited, (vi) I’m not allowed, (vii) I can’t handle, (viii) I do not need to know, (ix) I will not understand, or (x) I’m just an artist, musician, songwriter or producer and will never grow to be anything more than that.

In other words, I argue that there is a misinformation campaign that has conditioned artists, bands, musical groups and songwriters to feel that it is impossible for them to achieve significant success without the aid and help of the conglomerate-controlled music machines.

However, despite the above observation, there has been a shift and a change in perception taking place in the industry recently, which I have not seen in a very long time. I can describe this shift best by making the following statement:

There is something life-changing, transformative and empowering when an artist, band, musical group or songwriter has the courage to shake off the negative conditioning and programming and truly and sincerely embrace the possibility that he, she or they are fully capable of taking ownership and control over their musical projects and careers. I have to be completely transparent in making the following statement: Seeing artists, bands, musical groups, producers and songwriters make the above transformation is one of the moments I live for.

I can illustrate my excitement best by pointing out what I observe happening in those special moments: In an instant there is enlightenment, acceptance and understanding that there are no impossibilities, no creative restrictions; that whatever they have the imagination to dream, and the courage and drive to pursue, can be achievable by taking ownership and control over their musical projects and careers. Now, does the above referenced enlightenment, acceptance and understanding mean that this particular artist, band, musical group or songwriter will go on to make millions and millions of dollars from their musical projects? Of course not! But, despite the difficult road ahead, once an artist, band, musical group, producer or songwriter has had their eyes opened to the importance of owning and controlling their music and commercial efforts it is almost impossible for them to go back to seeing themselves as only employees.

GRASSMAN: What is it about a major label that, in your opinion, sucks the creativity out of artists? Is it the pressure to create a “radio ready” song, the fact that most signed artists don’t own their own copyrights, the over-sexed marketing tactics (one has to wonder if Gaga, Lambert or Cyrus ever feel pimped), or a combination of many things?

CROSS: Unfortunately, I have been part of a number of transactions involving my clients signing the major label deal. I use the word unfortunately, because I have not had one single client achieve a satisfactory result from signing the major label deal. I know that might sound like an exaggeration to some, but it is a true statement. Why is this so? Well for me, it has always revolved around the fact that artists (for the most part) do not understand the true nature of the transaction they are signing with the conglomerate.

I have tried to emphasize the importance of understanding the true nature of the transaction between the artist and the conglomerate for years, but quite often my clients don’t appreciate my point until they are already deeply caught up and stuck in the major label system.

OK, so let’s take a closer look at the true nature of the transaction between a conglomerate and the artist. Essentially, the recording agreement is not designed to be a creative understanding and development contract between the artist and the record label. Instead, it actually represents an investment agreement, which establishes the terms and conditions concerning the venture capital investment the record label is proposing to make into the artist. More directly, the recording agreement is primarily designed to ensure that the conglomerate has the best possible opportunity to make its money back, as well as a profit, and is not designed to ensure and/or guarantee that the best possible creative and musical project will be developed, marketed and sold featuring the artist’s performances.

Failure to understand the importance of the above is the first step in what is often a long and painful spiral downhill for the artist, band, musical group or songwriter signed under a major system deal. However, it is also true that once you accept acknowledgement that the recording agreement is operating as an investment agreement it makes it somewhat easier to understand why the conglomerate makes certain decisions and/or policies which often come into direct conflict with the way the artists feels his, her or their project should be developed, recorded and/or marketed.

While, there are exceptions to every rule, the conglomerate has limited time and resources to devote to any one of the multitude of artists signed to its various subsidiaries and/or sub-labels, and therefore if an artist is not initially successful and instead has poor sales, poor reviews, and/or poor turnout for live shows, the major machine has the tendency to immediately disconnect from this particular artist and refocus its efforts on greener pastures represented by other artists signed to the conglomerate who are still selling and bringing in revenues, not losses.

Now, it is at the above point, that I normally witness the collapse of creative energy from the artist, band, musical group or songwriter. Why is this? In my opinion, it is primarily driven by the fact that because the public has witnessed how the major label machine has disconnected from the artist’s project, the artist’s musical sound is now perceived to be old news or no longer relevant. As a result of the above, now the artist, band, musical group or songwriter is forced to make a decision; whether to maintain integrity toward his, her or their original unique sound and style on the one hand (and face the possibility of being dropped from the label) or compromise, on the other hand, in order to fit their music into a particular genre, which may be currently selling well, in hopes of reigniting the major label machine to support their next project.

GRASSMAN: Some people are saying that major labels are “dinosaurs” and we are moving into “the age of the indie.” Do you agree with that, or do you think major labels will adapt to control the new digital era of marketing and business as they have in the past?

CROSS: It’s true the Major Machines have suffered setbacks over the last several years (many of which have been self-inflicted). Notwithstanding, the major machines will continue to have impact because the conglomerates that own the major labels (for the most part) view their music subsidiaries not so much as a profit centers but instead as loss litters to energize revenues from other subsidiaries and/or holdings controlled by each individual conglomerate. In fact, (unlike times in the distant past) if you look at the conglomerates that own major label systems, actual music revenues do not represent a significant source of profitability for the conglomerates. What, however, remains to be important to conglomerates, despite poor music sales and profitability, is market share. The conglomerates are fighting a life and death struggle with one another to corner and control as much of the music entertainment market as they can.

Why is the above observation important? It is important in my mind, because it means that despite recent setbacks and poor profitability, conglomerates will continue to have more resources and motivation than anyone who can compete against them, to throw money at the problem of figuring out the best way to sell or license music, until they find a way to restabilize and exert control over what they view as a destabilized model at the moment. For the indie artist, band, musical group, songwriter, producer or label, disruption is always our friend and represents one of the main reasons why I am such a strong advocate of the necessity for the indie music community to truly embrace technology, as well as business skills, to competently, imaginatively and aggressively market and control their projects. In other words, stay within the eye of the disruption storm.

One last thought on this topic, our fight as indies is very similar to the fight and strategies freedom fighters would employ and use in order to oppose an all-powerful and vastly superior invading force who is intent on conquering and controlling all that they see and encounter. To oppose such an invading force as the one described above, we as freedom fighters, must at the end of the day make the decision that retreat is not an option; in fact that retreat is not even conceivable, because we are fighting for our way of life!

GRASSMAN: Being an independent diva myself, I have to end with a slightly selfish question: When it comes to counseling independent artists on how to succeed in the cut-throat world of music business, what’s your No. 1 tip?

CROSS: My No. 1 tip for the independent artist, band, musical group, songwriter, producer and label, is to take responsibility for your own success and relevance in the music industry. Stop looking for someone to come and rescue you. There is no one coming to rescue you, and if rescue is offered, quite often your rescuer comes in the form of someone withholding help until you agree to give them all ownership and control over your music as a condition of rescue. In my mind, this does not represent much of a rescue. Therefore, get out of the hostage situation and take responsibility for connecting your music to a fanbase. I often leave my clients to think about the following comment: Learn how to become your own superhero! Saying it another way; be willing to embrace the belief that no situation is hopeless – that your resourcefulness, imagination and courage represents the cavalry charging down the hill to win the battle and save the day.

GRASSMAN: Thank you for taking so much time to extensively answer my questions!



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