Metal Band Manager Mike Mowery Breaks Down the Havok / Mustaine Management Contract Point by Point
A public feud erupted on the Metalnets last month when Denver thrashers Havok, who had been scheduled for an opening slot on the upcoming Megadeth tour, were dropped from the run after they were unable to come to terms on a management agreement with Mustaine Management, the company run by Dave Mustaine’s son, Justis.
Havok alleged that the contract offered them by Mustaine Management was unfair, while Justis and his father claimed it was “industry standard.” MetalSucks obtained a copy of the management agreement and published it for the world to see, but even that didn’t really settle the issue — all the legalese was tough to sort through, and the issue of what qualifies as “industry standard” was open for debate.
So we brought in an expert, someone who’s seen his fair share of management contracts: Mike Mowery of Outerloop Management. Over the years Mike has handled or currently handles the careers of acts such as Refused, Devin Townsend, Periphery, Darkest Hour, Ice Nine Kills, Toothgrinder and more. We’ve also personally known Mike for almost as long as MetalSucks has been in existence, and know him to be straight-shooter who’s fair-handed, honest and doesn’t hold back.
What follows is an analysis of the points in Havok’s management contract that the band highlighted as objectionable in the public version of the contract they released. For each point, we’ve included:
- The relevant portion of the contract itself
- A “tl;dr” summary of Mike’s analysis
- A quote from Mike that sums up his viewpoint on that particular issue.
We hope this sheds light on the matter. A quick quote from Mike before we get started: “I don’t know Justis and I don’t know either Dave (Sanchez nor Mustaine), which has allowed me to attempt to be as impartial as possible. I have based my answers on my own experience and my own thoughts on the relationship between an artist and his or her manager or management company. If you have any questions, please don’t hesitate to contact me.”
Here we go.
1. The band name being spelled “Havoc” incorrectly
tl;dr: It wouldn’t be a huge issue if the rest of the deal was agreeable, but it’s an embarrassing mistake that helps fuel the band’s argument and shows a lack of attention to detail on management’s part.
Mike’s quote:
I don’t think it’s reflective of the work that could be done, but I do think that given all the other things that appeared, this helps make a case for the band – like, “Yeah, dude, how much do you care? You can’t even spell our fucking name right.” I know plenty of managers, and as I’ve grown busier and busier throughout my career and go to attorneys that I trust, I don’t look over all 12 pages of the agreement if we’ve done previous agreements with the attorney. I trust that they’ve gone over the material and the terms and they know whether it’s going to be two years or ten years or whatever it may be. I might not look over it with a fine-tooth comb, but I surely would have made sure that name was right.
And, if nothing else was bad, the band wouldn’t have cared, but the fact that the name wasn’t right definitely is a feather in their cap for their argument. It’s sadly the least important thing of the agreement but is their most compelling argument to me.
Look, I’m a guy that’s misspelled shit and has put the wrong address and occasionally had peoples’ names in there incorrectly, and the more you do this you realize that these are simple mistakes. But for the artist, it calls into question, “Okay, you’re going to look after my entire career? What happens when my name is wrong on an admat or on a ticket face or whatever else? Are you going to catch that?” Mind you, as the band grows and becomes bigger and bigger, you better believe that they’re going to catch it. If it’s on a logo, they’re going to catch it there. So I think it is a very simple and trivial mistake, but if you’re the band, that’s your whole existence, right?
2. The contract’s call for the managers to be booked business class tickets on flights
tl;dr: The business class request is excessive. Asking to be reimbursed for travel is not.
Mike’s quote:
So to me, that’s overreaching – the business class component of it. So, let’s just say that this happens to be Megadeth’s lawyer, and maybe in Megadeth’s deal that’s what it says. Megadeth are generating enough money where that might make sense.
I think I would say this: if this was in here without the business class part, it wouldn’t raise a red flag to me. Regarding the time frame for reimbursement, where it says “immediately for such cost and expenses,” this is when the shit hits the fan. When there’s a disagreement, that’s when they’re going to pull this out. Communication between the band and management is key.
3. On managers traveling on behalf of bands in general, and on bands bearing that expense.
tl;dr: Travel is often necessary for managers on behalf of bands. Business class is still excessive.
That kind of comes back to defining the role of managers. So, let’s just say that Havok are playing at the Megadeth show in New York and Justis and his team decide that being there is a good idea. Why? I’m going to use a better example: my client Refused went on tour with the Deftones. I went to the NYC show. Did I need to be there for the band to get on stage and play the show? Not at all. They’ve got a great tour manager, tour staff and team. They’ve got everyone that they need in order to pull off that show. But, for a few reasons — one is that, as a manager, part of that is expected, meaning that the Deftones manager and agent were there — I should probably show face and say, “Hi, and thank you for the opportunity.”
Let’s flip it on its head. If Plague Vendor go out with Refused, am I going to be bummed if the manager for Plague Vendor doesn’t show up and thank me personally? No, not really. But do I think it’s a smart move for him? Say I know him and we both plan to go to a show together — is that good for him and his band? Absolutely. He was able to sit there and continue to make the relationship of Plague Vendor doing business with Refused. Not everybody is this way, but we do business with the people that we like and the people that we see. You’re only as relevant as the last time you either talked to somebody or saw them in person. On the developmental band level, travelling on their behalf is vitally important.
4. Management taking a cut of the band members’ income from certain endeavors outside the band.
tl;dr: It’s only fair that a manager commission activities outside of the band as long as they’re related to music. It was the manager’s work, in part, that resulted in the higher profile which enabled the musician to get that extra work, therefore they should be compensated.
Mike’s quote:
Let’s say you’re great teacher of lessons and you’ve earned that privilege because either you’ve made a name for yourself prior to your band getting large or you benefit from being in the band itself. From there you go out on the road and teach lessons. This part of the contract says, “You need to cut the manager in for all of these extraneous things.” Let’s say that you grow your band big enough and Affliction wants to make you a brand manager, the whole idea of the contract including salaries, earnings, fees, royalties, residuals, and all these extra things generated from that is that the manager is helping the band grow and therefore helping the individuals, and all the things that they’re doing grow as well so management should be entitled to compensation based on those extra activities.
5. The “sunset clause,” which governs how much money management continues to take from the band after this deal has ended.
tl;dr: Sunset clauses are standard, but this one is unusually long.
Mike’s quote:
First of all, it’s not all band income. This is commonly misconceived. Because it is only subject to “products or services created during the term and exploited during the term.” So what this really doesn’t cover is the most financially feasible thing that bands do, which is playing live shows. This would cover, obviously, if the band makes a record during the term with management; it’s saying that we should be compensated after the term.
[That said], it’s a very long sunset clause. Ten years is a really long time, especially given the fact that the initial term is only three years. That’s one of those tough things. Even if a manager loves the band and wants to work with them regardless, the idea is that for the time that I work with you this deal was put into place, and I should be compensated with some sort of sunset provision. I would say this one is long. I could see it surely being at the 15% mark for half of what the original term is (one and a half years) or at most the length of the original term (three years). Let’s say that the original term is three years, then at most I could see the sunset lasting for three years. If the original deal is six years, then I can see it being longer, but where it is currently, based on what the original term is, it’s probably overreaching. The idea of a sunset clause is definitely standard.
The sunset clause can be set up many different ways, but that would probably be a very fair way of doing it. If you went to one and a half years or rounded it up to two years at 15%, then went down for another year at 10% and one more year at 5%, I wouldn’t say, “Oh my god, that’s the worst thing in the world,” but as it is now, for ten years [and at those percentages], that’s a long fricking time.
In the case of this, I would imagine 10 years was probably Mustaine’s starting point and after some proper arm’s length negotiation, it would have been reduced. That said, the early stages of the band is where so much of the career is set. If the manager secures a great deal based on his/her relationships, then looking for long term compensation might not be out of the question.
6. Management shall commission any business venture related to the band or their families.
tl;dr. This is not unfair. “In connection with our activities in the entertainment industries” is a key qualifier here. No one is trying to commission Dave Sanchez’s brother’s roofing business here.
Mike’s quote:
Let’s say that I’m an aspiring singer/songwriter. At the beginning, checks are being paid to me. I play a show, they cut me a check for 300 bucks, but my dad, all of a sudden, starts his own entertainment company. He says, “All things from my son are now payable to my corporation.” So, Mike’s Dad LLC starts demanding the money for Mike, essentially trying to skirt around the fact that Mike’s been paid. “You’re not paying me; you’re paying my dad.” Right? So this is essentially trying to protect management from that. As you read this, it looks crazy, but the general point is they’re trying to protect from the talent kind of going rogue. In the small, metal world of things, it’s probably never going to happen, but inevitably it does happen in the entertainment business, and they’re trying to cover the off-chance that it does. As it reads, it’s a bit challenging. Once an attorney digs in and starts to actually talk about it, it’s not really that crazy.
7. If a member leaves Havok, the manager has the right to terminate the agreement if he chooses.
tl;dr; This clause protects against key talent leaving the band. For example, if Dave Mustaine left Megadeth. If Dave Sanchez, the band’s key songwriter, quit Havok, would management still want to be involved? Probably not, and rightly so.
Mike’s quote:
I don’t think I have [this kind of clause] in [my management contracts], but maybe I’ll add it after seeing this. However, it’s in almost every record deal that an artist signs.
It’s pretty common. Let’s just say that a member becomes huge and decides that he or she doesn’t want to work with the manager who, presumably, was there and helped make them huge. They quit, and if they’re the ones with the brand power and go form another act and can quickly monetize it based on the former member or whatever else, then that’s what it’s there to protect you from doing.
8. Justis Mustaine’s assertion that he took a pay cut during his first year of working with the band. Is this standard for managers taking on new clients, especially smaller bands that aren’t earning much money?
tl;dr: Yes, this is a very common arrangement.
Mike’s quote:
I think managers do that all of the time. Sometimes it’s a waived commission, sometimes it’s a reduced commission, sometimes it’s a deferred commission. Deferred would be, “You owe us five grand, but you’re going to pay it back over time.” I think a lot of those things in the developmental process happen on a case by case basis. I would say that it is quite common if everybody agrees that there is a great opportunity for the band. They’re going to lose money, there’s no way that they’re going to pay management. If they pay management, they’re going to lose even more money. We all know that growing things is a step by step process, so if it takes us not profiting… “profit” is a whole other term, but generating money for ourselves as a manager; it’s very common to do that.
9. Justin Mustaine’s assertion that he and Havok had been operating under a verbal agreement for the first year and he expected in good faith to get a deal signed.
tl;dr: It varies, but it’s common enough.
Mike’s quote:
It really depends. I’ve seen it go all different ways. Typically when the opportunity presents itself to manage a band or you find someone, getting the business things in order can take a while, meaning getting paperwork together or whatever else it may be. Often times there is immediate work to be done, so it’s like, “Cool, let’s agree that we’re going to work together and we’ll move to paperwork down the line.” On the flip side, because of cases like this, I’ve seen managers say, “Look, until we get this paperwork done, we can’t work for you.” But depending on the leverage of the manager or management company, they may very well lose the client. In this case, if Justis is trying to grow his management career, this is a lateral opportunity for him — Havok left another manager, and they’re coming in. He’s excited about it because he knows he can create opportunities, and he’s going to want to hop on it because, presumably, if he doesn’t, another company very well may. If he’s bogging them down with paperwork and taking time, he might lose that opportunity.
10. Havok’s complaint that the contract didn’t specify what exactly Mustaine Management would do for them. Is this deal unusually vague in that regard, or are management duties in contracts usually written in general language?
tl;dr: Management obligations are always written in general language. Nothing out of line here.
Mike’s quote:
Absolutely standard.
The challenge is that [you can’t say] “Okay, I’m going to send 200 emails a month on your behalf. I’m going to make 42 phone calls. I’m going to take 3 people out to dinner and make sure that your Facebook is updated.” First and foremost, the range of duties for a manager varies so much depending on what the band has going on or doesn’t have going on, and there’s just such a wide swath of what the responsibilities are [that it varies from band to band]. My favorite way that someone has answered “what does a manager do?” was Ben Weinman [from The Dillinger Escape Plan] when he wrote something for Alternative Press (I think?) a long time ago which said, “Actually, the question should be what doesn’t the manager do?” To narrow it down to the specifics of those things really, probably isn’t going to benefit anyone.
And some final wisdom from Mike summing up the situation:
In summary, I just want to point out that this is one heck of a difficult business. Many people who read this website probably don’t ever have to think or worry about any of this kind of stuff when it comes to their favorite bands. Many of the bands don’t have the business experience to navigate through so many of these tricky issues. I know there are three sides to every story and in this case the “truth” of what has transpired must lie somewhere in the middle. I don’t know any of the people involved, and I don’t have any emotional attachment to this. That said, I do feel for both parties. Here you have a band that was really looking forward to the tour of a lifetime, and you have a manager who was working and creating opportunities for the band who inevitably wanted to protect the investment of his time and energy. Those can be at odds, but they don’t have to be. I have worked with many artists, often times young ones. I am able to comment on this situation because of my experience, and I’ve chosen to do so because I am passionate about both sides. I want for developing artists to succeed, but I want for them to be able to remotely grasp what it takes to help support them. Without knowing Havok, I’d guess that they just don’t have the experience to understand what the manager and his team have done thus far. If you care about your artists you’ll work every available hour to get them opportunities, and there is almost no price which can be put on that – except maybe some business class tickets every once in a while! Kidding, I’m more of a private jet kind of guy.
Lastly, I will say that my first client, Darkest Hour, is still my client, and we’ve never had to enter into a contract with one another. It’s something I’m insanely proud of, and if you watch how their career has waxed and waned, you’ll realize that me and my team have been by their side every step of the way, ensuring that we can continue to help them. Has it always been easy, or without disagreement? Book a ticket next to me on my next business class flight and find out!
Please feel free to check out my guide to managing a band: Mike Mowery’s Guide to Managing a Band, the official Outerloop Management website (recently redesigned with the re-launch of Outerloop Records) and in the coming weeks I’ll be launching a “coaching” part of my business which is aimed at managers and bands trying to find their way in the beast of the music business: http://www.outerloop.group
