Working with a Budget with Mark Scribner Part 1
If we were looking at from where we started to now it's almost representative of ah career you know, we started with establishing the goal we went on to figure out how to communicate established good relationships and then from there we talked about the importance of hard work thank you talked about the importance of hard work and getting into from there, you know, howto actually figure out howto make a living and figure out ways to bring in some income so you can support your goals. We then talked about the importance of balance and, you know, just holding yourself accountable for stuff and making sure that you have different outlets not just work, work, work, work, work all the time, and we've also talked about some industry relationships we've talked about, you know, you've you've gone this far on the path, now you're getting endorsements, you getting sponsors? How do you maintain those? How do you even get those? And now we're coming to a point where we are all in, ok, we are fully...
committed, we are working, we don't have any side jobs were in music one way or another, this is what we're doing and we're really building our career and as faras where we are along this path, you know we are I think our goal now is to sustain and then grow further, take it from whatever level we've gotten too and say, okay, we've achieved this goal, we've had these small victories, let's keep going, and one of the important things is really understanding how to manage your your money, and I got to be honest, I'm going tell a quick story. So when periphery started touring, we didn't have a business manager there's a difference between what mike mallory does, who is a artist manager and then a business manager? Okay, there's two, they're two very different things. A business manager helps you manage your money as a band or as a business helps you decide who gets paid, what, how they gets divided up, they help you with taxes, they help you with all these extremely important things, and when we first started, we were working with ah friend of mine, who is a great business manager, but we as a band didn't really have our stuff together, and we really didn't provide enough for good information to this person let them do the best work they possibly could for us, so we were a mess. We didn't know how to pay ourselves after tours, we didn't know where the money would go, we racked up some debt here and there, we just didn't know like, you know, I guess how to really do it and you know, I think we got by from the help of people like mike mallory. We got by with the help from people like ash you know, they definitely gave us their input, but really there are professionals in this industry who focus on nothing but this, you know, and I am not a c p a by any means I am not even aware of of like I know this much about the tax world and how that works, but as a business you have to be responsible, you have to pay your taxes and you have to also make sure that you're able to support yourself in this industry. So there are professionals that do that and couple years ago now I would say maybe a year and a half to two years we were lucky enough to start working with ah gentleman by the name of mark scrivener who manages bands like kill switch, engage periphery ah whole bunch of other fantastic artists and, you know, he's changed our lives. It was pretty cool. He interfaces with our record label. He interfaces with our management company and with any body else we work with two sort of provide checks and balances for us so that we as as the artist can focus on nothing but our art and he handles all of the money in the business stuff and that's it very important to make sure you have those checks and balances in your team and mark is really one of the final people in our team that I want you to meet so you've met the head of a record label you've met the manager that helps us out. You met my industry friends now it's time for you to meet someone who helps us actually get paid who helps us pay our taxes and who really has helped us decide when we go out on tour what we do when we go on a tour do we take a van and trailer okay? Is that in the budget? Let's take a look. Do we take three crew members there? We take two crew members and what do we really need? Do we budget for a bus this time and cut back on crew? Do we do three or four big screens on stage? Or do we take one or do we take lights? His job is to help us a budget and look at what we're doing and say okay, on this next run we need to step up our game so you may want to take a little bit less pay now so that your show is that much bigger and the production is that much bigger so that you can put on a better performance for your fans that in turn down the line again five I mean, hopefully not five years down line but on the next tour long term will pay off, you know, a little bit investment upfront will help you down the road and mark actually helps put it on paper for us and we talked about how important is to get things on paper and look at it so that we can really make our decisions as a business and figure out what's best so I want to bring mark uh, on and, uh I have a question though yeah, sure, just about this so you have, like, at an ideal level, it sounds like you have a business manager, you have a band manager, you have a tour manager, you have all these other managers, how I imagine it's always different and how they get compensated, but what is there like a basic understanding for people that don't have a business manager yet and don't have if they're going to negotiate with someone? What should they be looking for our work? There are standard percentages for different roles in the industry and, you know, you really need to just make sure that you realize that most of the relationships you have work on a commission basis off of what you bring in as a band so it's very rare that you pay someone on your team as like a retainer on dh if you have someone who presented presents themselves to you like that you may want to just do a little research and ask around kalsa management companies call some booking agents to see if that's correct because in my experience, the people that I've worked with have always worked on a commission based off of what revenues we bring in on dh there are standard rates I don't want to say what necessarily what they are because it's really a standard range rather than a set rate for the different areas. But I would say that as long as you have the right approach are they come to with the right approach of a commission basis than you're you're okay, so so it's pretty much like one hundred percent commission. Yeah, yeah wants these guys. Yeah, I mean, for everybody that we work with, everybody works based off of a commission commission, like of the profits of the tour itself, just like your whole with the tour of it. It depends. I mean, so a lot of times record labels now do these things called three sixty deals where they take a percentage of your record sales. I think a percentage of your merch they take a percentage of you know you're online store everything that you do and record label is different, you know, they do get a percentage of off sales, of course, but that's a whole another class to be honest on the record industry and how that works. But when it comes to your internal team, like your manager typically, yeah, I mean, there are times when you can negotiate different different things based on how much they work for you and what you're doing and what leverage you have. But for the most part, yeah, I mean, they'll they'll take a percentage of other you're gross or your net, depending on what the deal is, and it just really changes. And like I said, it just depends on the relationship, so it it can vary, but the key is to realize that there are, you know, percentages that are based off commission. And to be honest, I think mark's criminal can probably even elaborate on this further so that we have him yet. How you doing then? It's? Good to see a likewise, man, how are you? I'm good. I'm good. Thank you for forgetting the webcam going getting into the twenty first century. So this big appreciate it. Rock and roll. Mark and I were joking because on his computer at his office he didn't have the webcam set up for this, so I made him go get one and I told him how important it was for him to present here today. So it's great great to see him again. So actually, the question that I just got from drew who's one of our host was about the standard, you know, set up business wise of of bands and how the team they work with actually make their money. And I was saying that traditionally, it's based on the commission based structure, would you say that's correct? Yes, that is traditionally have stone. Certainly looking agents are on a commission basis generally they take ten percent managers also traditionally on a commission basis. Now you're we've seen fifteen percent in the old days. It used to be twelve me, but now fifteen percents your typical management commission and sometimes even less for business manager and an attorney that isn't always on a commission basis. Nowadays there are some engagements I'll do on an hourly basis or just a flat monthly fee, but commission is still usually had I get paid and in some cases how lawyers get paid as well. Okay, fair enough, hopefully that's that is more clear now coming from someone who actually does this for a living. Yes, was that like he's getting ten percent in the booking agents, getting ten percent and like, sort of like that like essentially so yeah like let's just say you get one hundred dollars in the pot you know the booking agent will get a percentage of that one hundred dollars and then the business manager will get a percent and your manager will get a percent of that and what's left over then depending on how the split is with the band will be split between the band members you know however they have it worked out um I've been very lucky to be a part of a band where everybody is even, you know, we're even members and we all contribute our own parts to the band pretty equally so we've just set it up that way for everything but it's not always like that it really just varies from from band to band. Um yeah, well, mark, thanks for coming, man are you know, thanks for calling and I know you're super busy. I know it's a crazy season right now for you with taxes and everything. So thank you for donating some time I thought it was important for you to be here especially, you know, after seem to your panel on touring on a budget at south by southwest I thought that it was something that would be really important for people to hear about that may not know a lot about the industry or maybe getting into the industry so I kind of want to talk about that, but before we get into that, um, you know, I don't even know some of this information. I just thought maybe be cool for you to give a brief background of kind of who you are, how you got started, maybe some of the bands that you work with. And, you know, some of I guess your values as to who you choose to work with as customers that that's, uh, that's, okay, yeah, sure. I guess it all started being a deejay in college and really get into music then, and when I entered college, I thought I wanted to be a wall street guy and then after spending four years spinning disk at the college radio station is like, I got working music business, but not being talented like yourself, I wasn't going to play, but I can add numbers and sew it all and so graduating college, I figured out end up at aa record company, doing royalty statements or something like that. I had no idea what a business manager walked buzz or even that they existed, but as I started doing darb interviews after college, it was ah dieta at red distribution, actually, who so referred me to a business management firm and explain what a business management from does, how they and all the finances on behalf of the band's collect all the income pay all the bills, do the taxes and so that led me into the fields that I am now in now. Um and yeah, as with any industry, I started well and worked my way up the ladder, you know, started as a junior bookkeeper and just plugged away for years and learned as much as I could along the way. Uh, I've worked on many different bands over the course of time. I'd say the biggest client I've ever worked on was the dave matthews band. I was a bookkeeper for their business manager for a period of time back in the nineties and let me tell you, sitting in on some of those settlements when they were doing those stadium once during the summer, amazing numbers being thrown around the room, and I'm sure, um and then I would say my my big break, the client, that sort of there was my own client that propelled me into being a business manager myself was good charlotte back when they broke um, I was working with them when they just got signed to sony and we're driving around the country in a van and within two albums cycles we were doing arenas um and over the course of time worked on clients of many different genres, I certainly as you know, work on a fair amount of metal bands at this point and and that's not by design although I certainly am a big metal fan myself it just kind of worked out that way in five years ago I had very few metal bands and it's more coincidence than anything I think that work with a lot of metal bands now and I'm certainly not going to complain but in general I like to work with clients that you are honest I don't like working with people they're looking at a rip off every person they worked with the band a tour with and I'll gladly share some names with you offline if sure areas eyes didn't who I might be thinking of so you know honest hardworking bands that understands that this there's no overnight success in this business and that they've got to put in a lot of long days and a lot of hard work to get to making a sustainable career out of this on did you just nice people in general and I'm fortunate that across my clients I can honestly say I I work with no a holes right now on dh er that wasn't always the case but I've man has to uh shed those clients that were big pain in the butt getting climb and uh you know nice to work with that's very cool that's very cool nell for people out there that may not know what a business manager does! I tried to paint the picture, I hope I didn't okay job, but briefly could you kind of summarize? I mean, with you know what, what a business manager does for an artist and how that relationship would actually come to fruition between artist and the business manager? Sure. And then when it many ways the artist business manager relationship is as important, I think, as any other professional relationship and an arse might have certainly I get as intimately involved in the artist life as anybody does is that they're working with you. My one sentence explanation as to what a business manager is is I view myself as the cfo of my bands, clients, the chief financial officer of the companies that I might bands have forms, so if it has to do with money it's my realm, I'm in charge of it. Uh, yeah, I'm the one that collects all the royalties and reviews the royalty statements to make sure the artist is getting paid correctly on the one that's collecting all the money from the book in h and make sure they're sending us the right amount of money. I'm the one that reviews and monitors the tour managers work on the road to make sure he's doing everything correctly in terms of income, he's collecting and expenses he's paint out on the road on dh I pay all the bills I'm paying the band's credit card statements and reviewing those statements to make sure all the charges allergic it. I'm doing the payroll for the band's crew and see at the end of the year, no tax returns for both the band's companies as well as the band members themselves. Eso and then I also deal with a lot of the personal financial issues that some clients might need help with, be it fixing personal credit problems or getting a mortgage, or figuring out a payment plan if they owes some back taxes to the irs. If it has to do with money, I'm involved too, some level fantastic and, you know, you obviously have to be a very organized person and a very calm person to deal with and patient, I should say, to deal with this type of stop, because I think when it comes to money, people can sometimes get a little bit intense or a little bit crazy and from from the exposure I've had to you, whether it be the email, phone in person now online, you seem pretty even keeled across the board, so that's that's, I think that speaks to your ability to do this, and would you say that you for anybody that wanted to get into this kind of job? That that's probably a precursor that they would need to think of how is being kind of patient and able tto take a step back and not get overwhelmed? I do I do and I think you make a great point when you're dealing with people's money when I'm dealing with your money it's you know it's an emotional issue for you and clients tend to get very excited if thie income isn't what it's expected or some expenses came up unexpectedly or they owe a bunch of taxes at the end of the year that they weren't expecting to uh as I personally would you no way all watch our bank accounts carefully or we should and it's an important and personal subjects for any individual, so being able to yeah, calmly soothe the client when they're having if frantic panic attacks about the state of their finances is important, you know, being even killed because as you know, we deal with a lot of hotheads in this industry and someone's got to be the sensible one and, you know, I guess that falls on the business manager to be the calm, cool collected one often times, so yes, uh, having those personality traits does certainly help me to do my job more effectively um and needless to say, organization is a must, you know, when you're dealing with the volume of of numbers and paper that a business manager does um if you're not organized, you're gonna get buried pretty quickly. Sure, absolutely well, I think that that was a great summary for sure of the types of things that you encounter on a daily basis, so hopefully the viewers definitely kind of said before we get in tow some more stuff, we do have one question. Yeah, I have a question for you, marc, I imagine there's a lot of bands that aren't making millions of dollars a year and yet may need like the management skills because they just don't have them or they don't have the band with themselves toe to manage themselves. Would you recommend they go with a band manager? Who's? Not at your level like is way below your level that's willing to, like do the work for whatever that percentage is, um even if maybe the quality's not there or learn how to do it themselves and wait till they can actually work with someone like you, um to do not to sound self serving but a banshee and hire a business manager as soon as they can afford one early on there's a lot of pitfalls in the career that can come back and haunt them later in the career a bad tax planning you sign a bad contracts, you just don't keep track of your cash that can have a long lasting negative effects on a band's career so yeah, even club bands should consider hiring a business manager uh a cz there is a certain value to that um for really low level bands where yeah, every dollar counts certainly to the extent they could do it on their own they good because it's better than no one minding the store at all but as soon as they can afford to soon as they can convince her connive a business manager to take five percent of whatever that pie might be, they should it will benefit them greatly in the long run. Wei have another question from one of our audience members ty what's your question thanks for being here, man. You know, you hear all kinds of horror stories about, you know, kind of the guileless artist being taken advantage of by like the shark in the suit and I'm wondering if you have any advice for people who are sort of at a at a lower level who maybe aren't so maybe have a more artistic temperament and aren't so skilled with the numbers for avoiding for first of all finding you know, if we have no idea where to look or what our resources are, finding a manager who's appropriate for them and what to look out for in terms of protecting yourself against being taken advantage of sure well trust no one, I guess with you for a suggestion, but you people you work with people you tour with our great source of referrals, as is your attorney. You're booking agent your personal manager, you definitely need to find somebody trustworthy to handle your modeling money. That goes without saying. And yeah, I mean, we could spend a half hour re canceling some horror stories you've seen on behind the music so it's important that you you scope out that money guy you're thinking of hire talked to other bands he's currently working with have your manager talked to other managers that might work with that business manager on some other band? Um, it's very important that you have a comfort level that that guy's honest, and if you don't have that comfort level, then you know that relationships just not going to go well, even if the guys honest, you're never going to trust him and there's always gonna be that friction because of that. So my suggestion again would be you find out who that guy works with and talk to those people and get their opinion of him. It's a lot of referrals seemed to be a big thing in this industry again, it's relationships and network and a lot of times, you know, I think that we started working together um, through referral from our manager, who has worked with other bands who've worked with another managers who you've worked with, and that's really how it happens, so I think it's just based off reputation and having good relationships. Um, so, mark, I wanted to ask you about any I guess if you could pick one or two or even three very common hardships that you see young musicians or young bands that air starting out that, you know, hardships they fall upon, um in your realm, you know, common stories or things that you get a phone call about, you're like, oh, this old chestnut, you know, things like that. Is there anything that you tend to see a lot that that may be a lot of a lot of bands might encounter early that they should look out for, yeah, not support any everybody with, uh, tax world, but it is africa, given the time of the year that the biggest issue I see the biggest problems they come to me or bands that don't properly plan for the taxes or even bothered a file, their tax returns. Right now, I have two different clients, both of whom are relatively new that haven't filed in several years, and they're gonna have some significant liabilities because of that that they're gonna have to figure out howto hey, and it certainly isn't in the budget right now, you know, when you get a ten thousand dollar advance of fifty thousand dollar advance, whatever the cases, you've got to remember that ten grand that twenty five grand that fifty grand isn't free to spend don't you need to set some money aside to cover the taxes on that? And if you don't, it is definitely going to come back to bite you in the ass at some point it might be two years down the road it might be six years down the road, but at some point the man is going to catch up with you and cause you problems is and you don't want to mess with the irs because they can seize your bank accounts, you can have your wages garnished and they can go after your home the owner home if you're home enough money, though, bill star criminal proceedings against you. So I would say that bad tax planning or simply not filing tax returns at all at all is thie most common financial pitfall that I see come into my office. Yeah, I think that's a really important point because I mean, I can't even speak for myself I'm very much so still learning about the tax procedure and how it works with the businesses that I'm a part of my own personal taxes, you know, it feels like to me it's like this new thing almost that I've encountered in the past bunch of years that I never really put that much thought into before so that being said is there anything that you are like any tools or books or handouts anywhere that you would recommend for bands toe sort of like research if they're not at a point where they could afford a business manager but they're just sort of starting out is there anywhere that they can look to to get a little bit more educated on the topic is I totally could have used that for sure for a while before you started working with you um yeah, absolutely yeah in absence of hiring a business manager, I would strongly encourage anybody and any level even if you're making five grand for the course of the year talked to a local sepa they made the local sepa may not understand the intricacies of the business that we're in, but they certainly understand basic tax law and can guide any taxpayer regardless of the business they're in to proper tax planning and how to remain in compliance with the irs and whatever state or states you might be dealing with is well, so that would be my suggestion is don't try to do it on your own contact professional even if that professionals joe smith local cp down the street talk to somebody that understands his taxes that's awesome advice I wanted to ask you to, um kind of even a little bit more specific uh not necessarily taxes but you know bands or artists they need to obviously get out there they need to go on tour they need to play in front of people that's how they build and grow what are some things that you've encountered there? Like what kind of issues on the road? I mean, I would assume things like van vans breaking down and needing to get work on the van and trying to budget for that or the trailer tire pops off on the road and you know, think is their common things there that young musicians will run into that you've seen yeah, transportation problems certainly one of the big ones yeah, every year I have at least double tours that end up upside down because the van blew up or there was significant problems with the boss or what have you so uh yeah, one area that I see a lot of problems is how you're getting from city and a city be um in doing it in a reliable mode of transportation, I can spell big problems and another issues stolen gear I've unfortunately seen that happen too often um bands needs and they need to be when you're stops in the club, make sure somebody is keeping track of it, especially in public city and I swear to god I had three different claims there in the last few years it's equipment insurance is really cheap and you know matt this is one thing I admit have thrown out the end of our south by southwest panel and just ran out of time but equipment insurance is cheap there's no bands are how little money they're making that shouldn't at least have their equipment insured it can save them tana money if the van gets in iraq and all that here is lost or all the gear get stolen or there's a big water we get the rehearsal space and everything's fried every band's should have equipment insurance and it's absolutely affordable. Uh another issue I see is with crew sometimes a man just takes that too many people more people than they can afford on that at the end of the day there's nothing left for the bands where you got four guys going home who have made eight ten grand over the last six eight weeks see a band needs tio make sure that they're hiring the appropriate amount of crew and are paying them a salary that they can afford. Um and you know, the last pit fall out there is that comes to mind is make sure you have your business structure set up correctly if you're a band if you're a true band for five or in your case six guys that are splitting everything evenly. Uh, that should be going through some sort of business entity on not one guy in the band, giving a social security number out all the clubs, that guy collecting all the income, and then paint out everyone else in the band from his own personal checking account. There needs to be some sort of business entity set up when we're talking to tru band and and the activity run through that business entity. That's. A great point, you know, periphery, even established, like an operating agreement, is part of, you know, forming a business so that we know how people can enter the band. Exit the band, I think that's something very smart to do. And for the viewers out there, if you're not familiar with with what an operating agreement is for business, it's, very important, because it basically governs the rules of your company and how things work.