Eric Lauvaux Dorothée Simic November 3 2011 Talent managers and agents: new legal status Nomos | Tech, Data, Telecoms & Media - France Eric Lauvaux , Dorothée Simic Tech, Data, Telecoms & Media New definition of talent manager or agentWork licence Widened access to the professionRemunerationComment Under the EU Internal Market Services Directive (2006/123/EC) France was required to modify conditions for practising as a talent manager or agent. New definition of talent manager or agent The new measures abolish the distinction between the status of a talent agent and the profession of manager or impresario. Talent agents can now practise "under the designation of impresario, manager or any other name". Operating as a talent agent consists of "being appointed for a fee as agent to one or several performing artists for the purposes of placing them and representing their professional interests". The duties assigned to a talent agent include: defending the artist's activities and professional interests; assisting, managing, monitoring and administering the artist's career; prospecting for and concluding employment contracts on the artist's behalf; promoting the artist's career to all performing arts professionals; examining all proposals that are made to the artist; managing the artist's appointments, schedule and press relations; and negotiating and examining the contents of the artist's contracts, checking the legality and verifying due performance for and by employers. An artist and a talent agent must conclude a written agency contract that specifying: assigned duties and the rules and procedures for reviewing performance; remuneration terms; and the expiry term of the contract or other clauses by which it ceases.Furthermore, the contract must be drawn up free of charge. Work licence Before the directive came into force, agents had to gain authorisation to practise by obtaining a licence from the minister of employment, which was tacitly renewable for a period of one year. EU nationals had to present an equivalent permit. Without such a licence, it was not possible to act as an agent to more than two artists within the same calendar year.The new legislation supersedes this administrative authorisation system by imposing an obligation to register on a national talent agents register, which is intended to provide information to artists and the public, as well as to facilitate cooperation between EU and European Economic Area member states. Registration must be completed before the talent agent provides his or her first service on French soil. Widened access to the profession Practising as a talent agent has been made easier, since the new scheme abolishes most of the professional and geographical incompatibilities that existed under the previous regime. However, the provision that a talent agent cannot simultaneously produce cinematographic or audiovisual works remains. Talent agents are now authorised to set themselves up under any corporate legal form and to choose and/or transfer their head office without restriction. Remuneration Capping Under the previous regime, the sums that talent agents could receive as remuneration for their placement services could not exceed 10% of the artist's remuneration. No similar provision capped remuneration paid to the artist's manager or impresario; instead, such remuneration was freely agreed between the parties. The new scheme retains the principle of a ceiling on remuneration for placement services performed by talent agents, but with certain adjustments. The sums received by a talent agent as compensation for his or her services cannot exceed 10% of the gross sum of fixed or proportional remuneration received by the artist. However, the above ceiling is raised from 10% to 15% when:"in accordance with prevailing professional practices, particularly in the field of contemporary music, the artist assigns special duties to the agent, justifying additional remuneration, for purposes of organising and developing the artist's career."This drafting allows managers of musical artists to receive 15% remuneration, although this may be lower in practice. The employment contract signed between the artist and the employer determines which party pays the sums due to the talent agent and, where applicable, the method of apportionment. Thus, the employer of the artist may only pay "the sums calculated as a percentage of the remuneration he pays directly to the artist of which the beneficiary performing talent agent is explicitly designated in the employment contract". Liability for the additional 5% remuneration which, in accordance with prevailing professional practices (particularly in the field of contemporary music) may be added to the initial ceiling of 10%, must be assumed by the artist even if it is provided in the contract that it may be paid by the employer on the artist's behalf. In practice, this new configuration could create complications with regard to: processing social contributions; and determining tax rates for the talent agent's share of the remuneration (especially for foreign talent agents). Remuneration should be processed differently depending on whether the employer of the artist is directly liable for the talent agent's share of the remuneration or whether payments are made on the artist's instructions and behalf. Expenses The new regulations specify that reimbursements, compensation and benefits in kind received by the artist to cover professional expenses cannot be taken into consideration when calculating the talent agent's remuneration. On the other hand, these provisions allow for the reimbursement of costs incurred by the talent agent in agreement with the artist on presentation of documentary evidence, under the conditions laid down in the contract. Comment This new scheme liberalises the status of talent agents and managers in French law to a certain extent, but requires compliance with a certain number of new rules, notably for managers.For further information on this topic please contact Eric Lauvaux or Dorothée Simic at Nomos by telephone (+33 01 43 18 55 00), fax (+33 01 43 18 55 55) or email ([email protected] or [email protected]).