Contract Modifications – Differing Standards for Pop Stars?
2012 American Idol winner Phillip Phillips has lodged a “bombshell petition” with the California Labor Commissioner seeking to void contracts that Phillips now finds manipulative, oppressive, and “fatally conflicted.”
Before winning season 11 of “American Idol,” Phillips signed a series of contracts with show producer “19 Entertainment” governing such issues as his management, recording and merchandising activities. These contracts are allegedly very favorable to 19 Entertainment, for example allowing the company as much as a 40% share of any moneys made from endorsements, withholding information from Phillips about aspects of his contractual performance such as the name of his album before it was announced publicly, and requiring Phillips to (once) perform a live show once without compensation. 19 Entertainment has also lined up such gigs for Phillips as performing at a World Series Game, appearing on “Ellen,” the “Today Show,” and “The View.”
It is apparently not unusual for those on successful TV reality shows to renegotiate deals at some point once their career gets underway. Phillips claims that he too frequently requested this, but that 19 Entertainment turned his requests down. Can he really expect them to agree to post-hoc contract modifications?
Very arguably not. Under the notion of a pre-existing legal duty, a party simply cannot expect that the other party to a contract should have to or, much less, should be willing to change the contractually expected exchange of performances. This seems to be especially so in relation to TV reality shows where the entire risk/benefit analysis to the producer is that the “stars” may or may not hit it big. For hopeful stars, the same considerations apply: their contracts may lead them to fame and fortune… or not. That’s the whole idea behind these types of contracts. Of course, if industry practice is to change the contracts along the way and if both parties are willing to do so, they are free to do so. Otherwise, the standards for contractual modifications are probably the same for entertainment stars as for “regular” contractual parties.
Another issue in this case is whether an “agent” is a company or a physical person. Under the California Talent Agencies Act (“TAA”), only licensed “talent agents” can procure employment for clients. Phillips is attempting to apply the TAA to entertainment companies like 19 Entertainment. If Phillips is successful, the ramifications may be significant for the entertainment industry in which companies very often negotiate deals with performers without taking the TAA into account. In Citizens United v. Federal Election Commission, the United States Supreme Court famously gave personal rights to corporations, albeit only in the election context. Time will tell how California looks at the issue of corporate personhood and responsibilities in the entertainment context.
Adjudications under the controversial TAA are notoriously slow and could leave contractual parites in “limbo” for a very long time. Time and patience is not what Hollywood parties are known to have a lot of, so stay tuned for the outcome of this dispute.