Business Succession

What I Would Have Told The 15 Year Old Taylor Swift At The Negotiation Table


This afternoon, Taylor Swift published a scathing and brutality honest response to the sale of Big Machine, and thereby, ownership of her masters. More can be found on her Instagram, but a snippet:

“For years I asked, pleaded for a chance to own my work…Instead I was given an opportunity to sign back up to Big Machine Records and ‘earn’ one album back at a time, one for every new one I turned in. I walked away because I knew once I signed that contract, Scott Borchetta would sell the label, thereby selling me and my future. I had to make the excruciating choice to leave behind my past.”

Many may think that her case, as a 15 year old signing a major record deal, thereby catapulting her career, is an outlier in the world of creativity and negotiating contracts. However, her deal with Big Machine is actually extremely reminiscent of those I encounter daily working as a lawyer in the creative world.

When you are a creator, it is not uncommon for businesses on the other side of the negotiating table to try to establish an upper hand in negotiations by making you feel as if your role as a creator is “less than” than of a professional business. This is the myth that must be dispelled.

Before going any further, discussing any perceived “flaws” in her negotiation is nothing more than useless grandstanding. I dare say no one writing about this deal has seen the contract between Taylor Swift and Big Machine, so it is pointless to make assumptions about the specifications contained within. Additionally, nor were any commentators at the proverbial “table” at the time of the negotiation. Those who were likely do not have the authority to speak on the matter, because it would’ve been ludicrous not to require a signed NDA.

However, the point still stands that this negotiation can serve a larger purpose of education for creators today.

What follows is how I would have counseled 15 year-old Taylor if I had been her attorney (and how I would counsel anyone entering into their first negotiation regarding their work):

IF YOU ARE CREATING ANY TYPE OF WORK AND ENTERING INTO A CONTRACT NEGOTIATION REVOLVING AROUND THAT WORK, YOU HAVE MORE POWER THAN YOU THINK.

You may feel as if you are entering the negotiation with the weaker set of cards. However, the same reason you may feel this way is the same reason why you are unique. No large, professional company would be interested in negotiating with you unless what you offer is highly valuable.

In Taylor Swift’s case, how many 15 year olds are entering into music deals? This is a signifier that the producers see immense potential.

In your case as a creative entrepreneur, how unique is your course/ creative work that the company is negotiating rights to? The larger the company, the more intimidated you may feel; but that’s also a signifier to your work’s worth.

Of course, hindsight is 20/20 with Taylor Swift’s career. However, the fact still stands: it’s difficult to even name offhandedly another musician you can think of who signed a record deal at 15. No matter how uncertain her future may have felt to her, no music deal/company would make a deal they hadn’t thoroughly vetted. The same is true for you: no (wise) company would negotiate a deal for your work unless they had thoroughly examined the scenario, and made a calculated risk to do so. You must also remain calculated.

Fun fact: the calligraphy above are actually Taylor Swift lyrics created for a friend

EVERY “GREAT” OPPORTUNITY MUST BE ACCOMPANIED BY A FIRM, LOGICAL, AND PRUDENT NEGOTIATION.

Let me preface this by saying: I will make a calculated assumption and assume the Taylor Swift had extremely knowledgeable attorneys at her side, making this deal happen.

However, as every attorney can attest: our actions are dictated by our clients’ desires and mandates. Therefore, before you hire an attorney in a negotiation scenario, you should be somewhat educated yourself. No opportunity, no offer, no negotiation, is worth examining without accompaniment by a thorough weighing of the facts, resulting in a prudent decision-making process. Negotiators entered into with emotion (even if that is excitement), automatically come in shorthanded. Every negotiation is more multi-faceted than most people realize, and entering into one with emotion clouds judgement.

I recently sat through a negotiation on behalf of a client, and the opposite party’s counsel’s tactic was to repeatedly, and I mean, REPEATEDLY, remind us of how big/incredible/successful/groundbreaking etc etc etc their company was.

While a bit tiresome, that was a welcomed move. It simply served to reinforce my decision that my client did in fact have something worth fighting for. Something that this “incredible” company is just dying to be a part of. This was a miscalculation on their part, because they showed their hand.

NEVER ALLOW YOURSELF TO MAKE A DECISION IN A NEGOTIATION BASED UPON THE PRESENT, RATHER THAN THE FUTURE.

You cannot build a future career based upon what you feel now. 2019 Taylor Swift knows that emphatically. In fact, this is probably the most important line in her entire article:

“Instead I was given an opportunity to sign back up to Big Machine Records and ‘earn’ one album back at a time, one for every new one I turned in. I walked away because I knew once I signed that contract, [Big Machine founder] Scott Borchetta would sell the label, thereby selling me and my future.

This is the most important line of Taylor’s response, and therefore, this article: Do not ever allow yourself to enter into a negotiation that does not contemplate several steps down the road.

When Taylor Swift left the record label, she recognized that. However, this clearly was not included in the original negotiation. This is not a slight against the Swift team in any way whatsoever; instead, a cautionary tale.

In Taylor Swift’s case with Big Machine, they negotiated the ownership rights of the masters of her first six albums. Very generally speaking, this means that the artist who gives their masters rights away effectively ties their own hands from the liberty to release or resell records with another label or other party, and more.

The following description from the company AWAL breaks this down best:

“’When you sign a contract, you are signing yourself into becoming a commodity. You’re becoming a product… Everyone should understand that, at the end of the day, as much as they’ll tell you that they love you, and they’ll tell you that you’re the next greatest thing, ultimately, there’s an Excel spreadsheet somewhere with an incoming and an outgoing column, and if that is not balanced and in the green, ultimately, they’re not your friends…By owning your master recordings, you keep creative control and you’re free to release your music however you want via whichever channels you choose,’ says Paul Hitchman, President of AWAL.'”

And, he points out, if an artist does ever choose to sign to a label, owning your master recordings is like having an upper hand. “If an artist owns their own rights,” says Hitchman, “they are in the best position to negotiate with a record company and obtain the best possible terms and controls.”

If you take anything from this article, please let it be this: you must always remain futuristic in your thinking. In the same way that every single business, no matter if you are service or product-based, should be built with the possibility of being sold one day, every negotiation should include considerations on what happens if that company ever sells.

I cannot stress this last point strongly enough, and ironically, it is a prelude into a topic that I will be discussing in the coming months: why every business owner must build a business that can (not must) be sold someday, if unforeseen scenarios occur, and how to do so. In the meantime, if you have any questions on the topic, drop them below- I’m looking forward to widening the dialogue on the topic of negotiating and selling commercial assets soon!

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