Idol Moneymaker
Cox News Service
The Oakland Tribune (Oakland, CA) May 28, 2004 Friday 

'AMERICAN IDOL" is a monstrous moneymaker -- for creator Simon Fuller, for the judges, for Fox, for virtually anyone who touches it.

Except, perhaps, for the once-unknown singers plucked from places such as Snellville, Ga., or High Point, N.C., and thrust into millions of households each week.

"Idol" producers 19 Entertainment won't talk about the details of the contracts finalists must sign, and they won't let contestants talk about them, either.

But some who have seen them say this much is clear: 19 exercises greater control over the careers of its stars and takes a bigger chunk of their earnings than do typical managers.

The new "American Idol's" career won't quite be her own. Fuller, the man behind 19, can tell her where to appear, what to record, even how to dress.

And according to The Associated Press, he'll take 25 to 50 percent of all her earnings, significantly more than the 15 to 20 percent most managers collect.

But then, Fuller is no ordinary manager.

Ordinary managers function as personal assistants and advisers, taking care of travel and recording arrangements and helping artists make major business decisions. Many also possess important industry connections that can jump-start careers, but they don't have the "Idol" machine at their disposal.

Fuller exacts a heavy price, but he can turn his clients into stars before they even step into the recording studio. He can guarantee them [the winners, anyway] a contract with a major label. He can bring them back in later seasons to promote their albums in front of 20 million or so viewers.

As Atlanta entertainment attorney Monica Ewing, who hasn't seen the "Idol" contracts but is familiar with some details, said, "[Nothing] even comes close to 'American Idol' when it comes to marketing and promotion. The exposure for one of their one-hit wonders far outpaces most seasoned artists out there. In a struggling music industry, they've cracked the code."

So you don't hear many complaints from the big three -- first season winner Kelly Clarkson, second season winner Ruben Studdard and second season runner-up Clay Aiken -- who among them have sold more than 6 million albums, according to Nielsen SoundScan.

[Still, there have been published reports of creative clashes among Studdard, Aiken and Fuller and their respective labels.]

Studdard, whose album "Soulful" has sold about 1.7 million copies in the United States, said he's doing just fine.

"I'm in a good place financially," he said. "Most new artists don't have this many ways to make money -- your own album, compilation album, the 'American Idols' tour, our own tour, on and on. I'm happy. Real happy."

Also happy is first-season contestant Tamyra Gray, whose album came out this week on a label 19 created just for her after her pairing with J Records fell apart.

"[Fuller's] been by my side the whole time. I couldn't ask for a greater company to be under," she said.

On the other hand, first season runner-up Justin Guarini has complained bitterly about his treatment by Fuller. 19 and RCA signed and then dropped him after his record sold only 140,000 copies. He has said that the companies forced him to record songs he hated, then abandoned him when the record didn't sell.

"Mine was a real high-profile debacle, but there are a lot of others who felt the sting of this monolith, who were used and chucked," Guarini told Entertainment Weekly in March. "'American Idol' is one of those things where you have to realize that you're being used for entertainment and you better use it back."

When the original contract for "Idol" finalists leaked onto the Internet in 2002, many entertainment lawyers were aghast. It included broad language allowing 19 to record and reveal information about the contestant of a "personal, private, intimate, surprising, defamatory, disparaging, embarrassing and unfavorable nature, that may be factual and/or fictional," according to a story on

Salon.com.

If contestants revealed any terms and conditions of the contract, they could be sued for $5 million. The contract also provided 19 with the option to sign them -- or not -- for a period of time. And, according to Salon, it stipulated that the winner had to participate in a "World Idol" competition for a payday of just $1,400.

Gary Fine, a Los Angeles entertainment attorney, said a contestant showed him that first "Idol" contract, and he recommended they pass.

Now he says the contract could work for certain types of acts. "If I had an artist whose music was quirky and might take time to develop, then Simon's organization is not the one I would recommend getting involved with," Fine said. "On the other hand, if I have a client whose primary interest is fame and fortune, then Simon's organization is certainly worth considering."

Entertainment lawyer Kenneth Freundlich also has softened his position.

"I came out of the box very antagonistic" about the "Idol" contract, said Freundlich, who has seen contracts for the first two "Idols" but not the current one. "I thought it was exploiting people who are very vulnerable in their own lives and trying to get ahead."

But Freundlich, who has represented acts such as Spacehog and the Spin Doctors, said he's since modified his views because "Idol" has been so successful while the music industry has suffered.

"If clients come to me and have this contract now, it's a little different conversation than I was having," he said. "Five years ago, you had alternatives. ... As a lawyer with a group you believed in, you felt powerful. Now there aren't as many doors to knock on."

He noted that television is playing an increasingly important role in building artists. Josh Groban, for instance, used appearances on "Ally McBeal" and "Oprah" to become a multimillion seller, despite minimal radio airplay.

Given the industry slump [CD sales dropped nearly 20 percent between 2000 and 2003], ceding more money and more creative control in exchange for almost guaranteed short-term success may not be such a bad deal. Especially when you consider that the industry already has a notorious reputation for taking financial advantage of its stars.

Record companies like to lock budding stars into multi-album contracts that pay about $1 per CD, and then take a portion of that dollar to pay for producing music videos and concert tours. In Donald Passman's book "All You Need To Know About the Music Business," he presents a hypothetical in which a band sells 500,000 albums and nets only about $40,000 -- and that's before a manager takes his cut.

Fuller, who also managed the Spice Girls and Annie Lennox, has said he's just making his clients' business lives simpler.

"Most artists working on the old-fashioned model. How do you keep track of your publishers, your record company, your merchandise, your sponsorship agent, your touring agent?" Fuller told The Associated Press. "There could be 10 different people dealing with different areas of your life. This is one-stop shopping."

Entertainment attorneys say some record labels are beginning to adopt the one-stop shopping model.

"Record labels are merely trying to find other revenue streams," said Jay Rosenthal, a Washington attorney who also represents the Recording Artists Coalition, a lobbying group that supports the rights of musicians. "There are potential conflict-of-interest issues if labels are handling your touring as well," he said. "They could hook you up with acts on their label or force you to promote shows for no pay. I know managers have been very antagonistic to this type of deal."

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