NEW YORK -- It was a brutal audition. Before a scrutinizing panel of judges,
Howard Siegel took center stage for a key performance during the second
season of "American Idol." But this contest wasn't shown on television,
and the singers in the room sat in quiet examination, listening to
Siegel's explanation of what a respected entertainment lawyer could do
about their contract situation.
19 Entertainment, true to its pedigree as producer of the phenomenally
successful singing competition, had organized a mini-contest among
several lawyers so the show's finalists could select one to represent
them collectively in deal negotiations.
After a quick vote, Siegel won the job, which he passed to other lawyers
after that season. Now, in the show's sixth season, Siegel is back
representing all 24 finalists.
It's a job that, at first glance, might not seem terribly complex. After
all, what kind of leverage does Siegel, a partner at Pryor Cashman, have
in negotiating for clients who have been plucked from obscurity and
given the opportunity of a lifetime?
But Siegel says his efforts do make a difference for the aspiring
"Idols."
Like most reality programs, "Idol" requires everyone featured on the
show to sign a broad release and rights grant before auditioning. If
chosen as a finalist, contestants must sign additional contracts with
producer Simon Fuller's 19 Recordings Ltd., 19 Merchandising Ltd. and 19
Management Ltd. Producers get management and merchandising rights and
also have an option to sign the winner and others to a recording
contract with Sony BMG, though that option is not always picked up.
During the show's first season, portions of a 14-page agreement that
contestants signed were leaked on a popular music listserv. In the
contract, contestants granted broad exclusive rights to Fuller,
including the "unconditional right throughout the universe in perpetuity
to use, simulate, or portray ... my name, likeness (whether photographic
or otherwise), voice, singing voice, personality, personal
identification or personal experiences, my life story, biographical
data, incidents, situations and events which heretofore occurred or
hereafter occur ..."
Besides putting their publicity rights in 19's hands, the finalists'
long-term management contracts gave the company a huge cut of any future
fortunes derived from record royalties.
But Siegel says that contracts have been improving in finalists' favor
since the first season and that contestants now sign "much more
generous" term sheets than the typical new act with a major label. These
contracts "are certainly not anywhere near low-end deals," he says.
Siegel believes he's a big part of the reason why. The collective
bargaining power of a single lawyer who negotiates with 19 quickly after
the finalists are announced is "leverage in and of itself," he says.
Individually, at the time they sign these contracts, contestants have
not become household names and can't command A-list concessions. The
only bargaining power may be a mass walk-out among the finalists that
could cripple the show -- something Siegel says has not been discussed.
"19 as any music industry employer wants people who aren't
dissatisfied," he says.
"American Idol," spawned from the U.K. reality hit "Pop Idol," debuted
in summer 2002. The program, which features a much-imitated
three-judge-and-viewer-vote competition format, has become a cultural
and ratings juggernaut (an estimated 30 million viewers tune in each
night) and has launched the music careers of such Billboard
chart-toppers as Kelly Clarkson, Clay Aiken and Carrie Underwood.
Siegel's participation in the show actually dates back to its first
season, when he was contacted by runner-up Justin Guarini to take a look
at the agreements he was being asked to sign.
Afterward, Siegel says, 19 thought it would be a good idea to continue
giving its finalists representation before handing them contracts.
Hence, the beauty contest for the right to represent participants in the
king of all beauty contests.
Siegel stresses that he was hired by the "Idol" contestants -- not by 19
-- after pitching his 35 years' in the music industry and experience
repping Guarini. (Contestants also are free to hire additional lawyers.)
Siegel, who has spent almost his entire legal career at Pryor Cashman,
is former chair of the New York State Bar Assn.'s section on
entertainment, arts and sports law, an associate member of the National
Academy of Recording Arts and Sciences, and editor in chief of
Entertainment Law, a 750-page treatise.
Based in New York, Siegel traveled to California earlier this year with
partner Ken Schulman to meet with Andy Stinson, their legal counterpart
at 19. During a week-long session, they negotiated the deals signed by
each of the contestants.
"Every year, there are hundreds of changes in terms of procedure,
administration and economics," Siegel says.
He declines to go into specifics about what those changes are but says
that in general he negotiates business issues, including advancement of
royalties, a company's obligation to release a record and promotion as
well as creative issues, including the extent an artist will have
meaningful input into the way a record is produced and marketed.
Despite annual predictions that the show has reached its apex in
popularity, "Idol" continues to draw attention unlike anything in
entertainment.
But while most contestants sign their deals and perform without
complaint, the show has not always stayed on good terms with its
participants.
After being named runner-up in the voting but becoming the breakout star
of the show's second season, Clay Aiken hired Atlanta entertainment
lawyer Jess Rosen and was able to extricate himself from his management
contract. Other contestants, such as Season 4 finalist Mario Vazquez,
have followed suit, leaving lawyers to debate whether contestants are
getting a fair deal.
Gary Fine of Kleinberg Lopez Lange Cuddy & Edel in Los Angeles says he
doubts much has changed since the show's first-season contract was
circulated.
"While I'm sure having a lawyer like Howard may help some, Simon Fuller
is in a unique position of leverage, and the deal terms are probably
what they are," Fine says. " 'American Idol' can tout that contestants
are represented and that representation may in fact otherwise improve
material terms of the contestants' agreement, but I doubt that any one
particular lawyer is going to achieve substantially more favorable
results for one season's 'Idol' contestants than for another season's
contestants."
But one prominent critic of the show, Schleimer & Freundlich partner
Kenneth Freundlich, who appeared on cable news shows to heap scorn on
"Idol" producers for taking advantage of young music artists, now says
he has changed his mind.
"Any criticism I had about the show was a long time ago," Freundlich
says. "The show has matured, and having Howard aboard helps because he's
a good person and a good lawyer."
Owen Sloane, a partner at Berger Kahn who has negotiated major recording
contracts for Barry Manilow, Elton John and "Idol" Season 5 fourth-place
finisher Chris Daughtry, says that the company is unlikely to mess with
a winning formula and grant more favorable terms to contestants.
And Sloane questions whether 19's procedure for lawyer selection for
"Idol" contestants is a good thing.
"Selecting someone who is cooperative with (19) and not going to rock
the boat isn't a great idea," he says. On the other hand, Sloane
believes that contestants become stars only because of the show and as
such are getting a fair deal.
"(The show's producers) are creating value, and they want to participate
in the value they are creating," Sloane says.
Siegel has participated in some of that post-"Idol" success as well. He
says he continues to represent many contestants after their time on the
show. Most fade into obscurity, but several, like Ruben Studdard, have
found success and stuck by their "Idol" lawyer.
Siegel says he enjoys the benefits of representing obscure up-and-comers
on their way to stardom.
"You have these young, relatively inexperienced individuals who are
thrust with suddenness into the public eye at an incredible level," he
says, "and it is absolutely the best reward I can experience as a lawyer
to watch them adapt to new status and help them deal with pressures
associated with the development."