Entertainment/Performance Industry

Call Barry's Accounting Services if you are, or if you represent, an "A" list client and you need to add a reliable and valuable member to your team.

Barry's Accounting Services treats entertainment clients like royalty. A taxi/limousine will pick the artist up at the airport and will take the artist back to the airport at no charge to the artist. The best security will be provided for the artist. The artist will live at the best hotel near the airport, downtown Brooklyn, or uptown Manhattan. The artist will enjoy the VIP treatment.

What can Barry's Accounting Services do for the artist?

Clients in the entertainment industry have retained Barry's Accounting Services when:

1)	They need help to achieve or maintain financial independence and they want a reliable and trusted advisor to oversee all aspects of their transactions, including reviewing/analyzing their contracts.
2)	They need help with an alleged tax evasion case.

Barry's Accounting Services is a household name among top-tier entertainers. It has been in business for over 25 years. It is the number one entertainment accounting firm in Brooklyn and the east coast and we have strong industry connections on the west coast and the U.K. We cater to clients in music, fashion, sports, film, and culinary arts and we render services to owners of upscale salons. Trust has never been an issue with our clients because many of them grew up witnessing their parents do business with Clem Barry. We are small enough to know you personally, appreciate your business, treat you as a valuable client, and ensure that you always benefit from our constant exchange of ideas and personal rapport, and we are diversified enough to provide you with any array of value-added services and cater to your needs quickly without having to go through red tape and board meetings.

Barry's Accounting Services will honor its agreement as stipulated in the contract with the artist: Design business strategies and articulate strategic plans that fit into aggressive marketing and public relations campaigns; calculate the artist's royalties to ensure the artist receives adequate compensation from the record label, sponsors, and merchandisers before the artist signs a contract; communicate with label and sponsors liaisons; prepare a personal financial/retirement plan for the artist; plan, purchase, manage, and sell business entities approved by the artist; establish a corporation to manage the artist's business-related income, expenses, and investments in accordance with generally accepted accounting principles and existing tax rules; connect the artist to booking agents, out-of-state and overseas promoters and entertainment accounting firms; audit (tour accounting, royalty, publishing and merchandising companies) and hold everybody accountable for the artist's money; prepare personal and corporation tax returns; assist the artist with purchasing, renovating, insuring, leasing, and selling real estate, boats, and planes; screen key employees and business associates, and coordinate special events on behalf of the artist.

Click here for "Financial Planning & Wealth Management"

Clem Barry, a Tax Resolution Specialist and Entertainment Accountant at Barry's Accounting Services, has represented hundreds of clients in tax disputes including a rap mogul owing over $3 million in 2006, a medical professional owing $2 million in 2007, and a day trader allegedly owing $400 million in 2008. He has prepared a sample checklist for you, together with some of the advice he has given to artists in the entertainment industry.

Income
	Appearances (promotional, opening act, headliner, movies, & fashion)
	Ticket sales (concerts/tours)
	Recording studios, Records / Videos / CD sales
	Advertisers
	Endorsements & residuals
	Rents, royalties, & merchandising
	Copyright & copyright infringement
	Songwriting / Music publishing
	Music reproduction licensing / contracts (movies)

Non-Income
Charitable, goodwill, and public relations appearances.

General Expenses/Overhead
Support staff/entourage: Agent, managers, producers, coach, choreographers, security, secretary, chaperon, beautician, publicists, attorney, bookkeeper, accountant, master of ceremony/announcer, casting directors, photographers, technicians, musicians, and foreign and local promoters and distributors.

Related expenses: Baby-sitter, maids, chef, butler, and gardener/caretaker (Forms W2, household employees vs. independent contractors), advertising and promotion, printing, postage, stationery, charitable contributions, insurance (property, health, disability, medical, and long term care), medical expenses, bank charges, pension contributions, transportation (air, limousine, tour buses, trucks), taxes and permits (local and foreign), meals, lodging, costumes, studio fees, rehearsal space, hall/stadium rent, lodging while on tour, leases, depreciation deduction, organizational expenditures/deferred expenses, musical instruments and related accessories, equipment repairs, opening acts/artist, stage lighting and decorations, audition fees, portfolio and resume, professional/membership dues, telephone and answering service, electricity, health club, physical training/education, script preparation, dance lessons, voice training, casual labor/stage hands, co-writers, record producers, mixers, remixers, engineers, co-publishers, costumes, rehearsal clothing/props, tips backstage (dressers, doormen, porters, bell hops, etc.), theatre books, sheet music, scripts, score cards, the cost of attending plays, movies, and concerts to observe trends in your industry and to maintain and improve skills in your profession, celebration, and special events in accordance with industry norm.

Question
"Your company promises free limousine, security, and hotel for entertainment clients. How does that work if an artist or band members want(s) to meet with you?"

Answer
If an artist or band is under contract, is about to sign a contract, or has recently become a free agent, and wants me to be part of their team, then the accommodation is free — "It's on the house." This is a token of my appreciation for doing business with the artist/band. This is the way I do business with people in the entertainment industry.

Question
"My band is negotiating a five-year, 10-album agreement with a big record label. We anticipate selling more than 10 million records/units. We are asking $775,000 per album. The SRLP is $12. Our contract will pay us 12% royalty on 90% sales. We have to pay 20% packing costs and 25% of our paycheck will be withheld in reserves. We will receive an advance of $5 million. What is our take on that? Should we sign the contract?"

Answer
SRLP ($12 - 20% packing cost) = $9.60
Gross royalty ($9.60 x 90%) x 12% = $1.0368
Net royalty ($1.0368 - 25% reserves) x 10 million units = $7.776 million
Less advance payment you received = $5 million

The recording company owes you a balance of $2.776 million if you honor your contract. If your records are completely sold out (there are no returns or damages), you will be entitled to receive an additional 10% royalty of $1.152 million from sales, plus your 25% or $2.592 million for reserves that were withheld from your paycheck (recoups). Some artists are not aware of that. The company can withhold your reserves for years. You should try to minimize risks and increase your working capital and liquidity ratios (solvency). You are receiving 12% of SRLP so try negotiating a sliding scale SRLP. Major artists often command more than 15% of SRLP while minor players are signed up at 10% or less of SRLP. You are an "A-list" artist so keep on negotiating. Try negotiating 15% reserves and payment (liquidation period) in 90-180 days. Try negotiating more publishing and merchandising rights. Packaging deductions will cost you 25% or $24 million. Try negotiating 10% packaging, handling, and shipping deductions on SRLP by allowing customers to download their purchases from the label Web site. Overall, you can earn $1.5 million per album instead of the $775,000 that you are asking for. Why not! The record company wants to collect 88% royalty from you. Be careful with "all-in" deals/contracts because you will be responsible for paying the producer 3% of your royalty while the producer receives payment from the label for all records sold plus production fees of $25,000-$150,000. Factor in your overhead expenses and prepare and stick to a tight operating budget. You would have to release at least two albums per year, therefore you may have to take your band on tour in order for you to generate the exposure needed to leverage the sale of records and other licensed merchandise. This means "sold out" concerts in large arenas. Please don't forget to pay federal and state quarterly estimated taxes if you are required to do so. You will increase your disposable income tremendously by saving thousands of dollars in interest and penalties. I have saved you millions of dollars. Save some for working capital, emergencies, and retirement. Enjoy the balance. Good luck!

Question
"I am a new artist and an independent label has offered me an "all-in" contract. I will be paid 10% royalty on 80% sales (20% freebies and returns). The contract requires the sale of 500,000 units. The SRLP is $13, packaging costs 15%, and reserves 25%. I will receive $100,000 in advance, and rehearsal time and production fees will cost the label $46,980. Royalty on additional units above the number of units required for me to break-even is 18% on 95% sales. Reserves are reduced to 10% and packaging costs are unchanged. How many records do I have to sell to earn the advances that I will receive? How much will I earn from my recording contract? What is the most important advice you can give to a new artist?"

Answer
Net SRLP ($13 - 15%)	=	$11.05
Artist's net royalty per unit [($11.05 x 80%)(10% - 3%)] - 25%	=	$0.4641
Advance (loans) received	=	$146,980
Number of units that must be sold to settle your debts with the label	=	316,700
Additional units over break-even units (500,000 - 316,700)	=	183,300
Artist's net royalty per unit [($11.05 x 95%)(18% - 3%)] - 10%	=	$1.4171625
Additional royalty (183,300 units x $1.4171625)	=	$259,766
Total (Gross) royalty earned from your recording contract	=	$406,746

Generally speaking, the entertainment industry is not only about glitz and glamour, it also entails tough negotiations with the major labels, properly constructed contracts, and skillful management of the artist's career and finances. If you have plans to make it big in the entertainment industry, then your first priority should be to hire people whom you can trust. You should hire a business manager, an attorney, and an entertainment tax accountant like myself who is familiar with the intricacies of the industry, otherwise you could end up broke while you owe the government thousands of dollars in back taxes and you could be sent to prison for dodging the taxman. There are famous actors, artists, and sports figures who can testify to what I am saying.

If you want to be taken seriously as a new artist, your album must be more than an instant hit with the radio stations. It must be a monster hit with cross-over fans/public. It must dominate the airwaves and the charts and make the major labels wake up and take notice that you have arrived. You are "sizzling hot" and you are ready to blow the roof off the big arenas. They love that bold confidence. Each of your hit singles in the Top 10 can take you from gold to platinum or multi-platinum. More important than making a hit record is a visionary artist with good lyrics that makes the charts regularly.

A monster can earn you huge dividends for your hard work. Besides/apart from the $406,746 you earned from your recording contract, you can lie in bed and have monthly royalty checks deposited in your bank account every time a song on your album is played if your contract has stipulated that you are entitled to share in the copyrights. Be sure that your contract has included all foreign countries and territories where your album release is planned. A significant portion of your record sales may occur in foreign countries at royalty rates of 75% or more of the domestic rates. You can lose millions of dollars in royalties if your contract is not properly constructed. I have looked at a lot of contracts that have been drawn up by entertainment attorneys; so you can rest assured that I have the insider scoop. I hope I have enlightened you. Call me if you need my service. Good bye and good luck.

WARNING! New York Post, Friday, October 5, 2007, page 38. Nypost.com "Music 1, Pirates 0" "Vivendi SA's Universal Music Group and other record companies won the first trial over music downloading in the case against a Minnesota mother of two accused of sharing songs over the Internet without permission. A jury in Duluth, Minnesota, said she improperly distributed songs over the Internet. She was told to pay $9,250 for each of 24 songs downloaded for a total of $222,000."

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