Additional Fallout From The IMG Artists Scandal

The 5/1/2009 edition of Bloomberg published a commentary by Norman Lebrecht that examines some of the early response within artist management circles to the Barrett Wissman scandal. Wissman, a hedge fund manager who also serves as Chairman of IMG Artists, pled guilty to securities fraud and agreed to pay $12 million in penalties in connection with an alleged kickback scheme involving a New York state pension fund…

Lebrecht’s article examines the response from the International Artists Managers Association (IAMA) to Wissman’s guilty plea and includes the following statement from IAMA Chairman John Willan:

“While the news of Mr. Wissman’s conviction in the United States is received here with sadness and concern for our member company, IMG, Mr. Wissman himself does not act as an agent or artist manager but as an investor in and executive of IMG. As such, he has not by his self-confessed actions and subsequent conviction, contravened the code of practice laid down by IAMA.”

Are we witnessing the beginning of a cascading failure event within the artist representation industry?
Are we witnessing the beginning of a cascading failure event within the artist management industry?

Willan’s statement is interesting as it clearly attempts to distinguish Wissman’s duties as IMG Artists’ chairman and that of the firms’ agents and managers as something mutually exclusive. However, IAMA’s own Code of Practice indicates (emphasis added) “Throughout this document…[t]he term “agent” shall be deemed to cover all companies who are full members of the Association, whether acting as agents or managers.” There is nothing in the Code of Practice that distinguishes agents/managers from other employees and even though the Code is self described as “an expression of [IAMA’s] wish to maintain a high ethical and professional standard in all their dealings with other members and with third parties” one might wonder what sort of business activities distinguish agents/managers from other employees (or executives) working in an artist management firm.

It is easy to see why the IAMA and any agent or manager at IMG Artists might want to distance himself or herself from Wissman. Typically, the interaction between for profit artist management firms and the nonprofit classical music business is shrouded in the thickest veils of secrecy and confidentiality; as a result, there is undeniable potential for the Wissman scandal to trigger a cascading failure event of credibility and standing the likes of which this business has never seen.

Consider this: payments to artist management firms for services of guest artists (conductors and performers) have grown considerably over the past several years as has compensation for music directors (who are typically represented by the same firms). Comparatively, other expense segments within the business have grown at a fraction of those rates (which we’ll be examining in short order with the 2009 Orchestra Compensation Reports this June). Are all of these events unrelated or driven in part by an artist management firm’s company policy?

Also for consideration, artist management firms wield a great deal of influence over which orchestras are worthy of attracting their respective clients. In short, an artist might be interested in establishing a working relationship with an ensemble but if the artist manager doesn’t agree, you’ll likely see that potential evaporate (although I know of a few shrewd CEOs that have successfully navigated the treacherous backwaters of an artist manager end-run). Add to this the fact that music directors have a significant amount of influence on deciding which guest artists their orchestra hires each season and the potential for abuse becomes increasingly self evident.

In short, it may be difficult to separate the Wissman scandal from the standards and practices of the classical music artist management business as IAMA’s Willan suggests. Can you imagine the sort of chaos that might erupt if artists can prove they’ve been unfairly muscled out of performance opportunities or a conductor can substantively support a cry of foul on a music director search process or an orchestra that can demonstrate they were the target of segregation or extortion all due to influence wielded by an artist management firm(s)? And don’t forget about the Internal Revenue Service, how long do you think it will take before someone there sees Wissman’s guilty plea as an excuse to begin digging into returns from artists, firms, and orchestras?

Then again, perhaps all business between artist management firms and orchestras is beyond reproach and absolutely nothing will change.

Time will tell.

Full Disclosure: In the course of my activity as an orchestra consultant (another undeniably for profit sector of the orchestra business) I have worked with numerous artist managers and agents from firms of all size including – but by no means limited to – IMG Artists. I can say from firsthand experience that there are a number of agents and managers out there that are a pleasure doing business with and conduct their business fairly and above reproach. Likewise, there are those who don’t.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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7 thoughts on “Additional Fallout From The IMG Artists Scandal

  1. It must be added that in addition to ethical issues being considered here, Mr. Wissman is in danger of losing his passport. He is at the crux of planning and orchestrating many international festivals and concerts associated with IMG artists. I think logistically it would be difficult for him to continue his duties in light of this.

  2. It’s good that Lebrecht mentioned that in his article and I agree that losing a passport will make it all but impossible to executive the duties normally reserved for a position such as chairman of a large artist management firm.

  3. It seems like the question becomes, what are the interests of the artist manager in advancing some orchestras over others? If a manager wants to place his conductor client on certain podiums, is it because he/she simply wants to get him the best, most high-profile gigs – or because the manager has some sort of business stake in that orchestra (which would mean a conflict of interest)?

    Your other point is even more crucial. If a conductor wants to work with a given violinist or pianist but his manager’s firm doesn’t represent that artist, how is that resolved? It seems like there’s a gray area between a manager who wants to foster “relationships” between his clients and one who insists on certain exclusivity pacts…

  4. Those are all superlative questions Brian and to go one more step, how is all of this regulated? Just like the recent financial practices that led to the economic were all legal and/or legitimate did that mean they were in everyone’s best interests?

  5. From what I already know from the company, Mr. Wissman has been travelling extensively and is very actively involved in all aspects of the company, so the speculation about his passport is incorrect.

    On the other subjects, these questions are all part of the day to day of artist management and are complicated questions to deal with. It is true that it is sometimes in the artist manager’s interest to promote one artist or orchestra vs. another, but one also needs to know that other agencies don’t always
    cooperate with an artist manager on projects, making it much easier to keep things in house. This is the reality of the situation frankly.

  6. Thanks for the perspective Tom, I do believe the passport issue Lebrecht mentioned is valid and only time will tell.

    As for the issue of cooperation between artistic management firms, I don’t think anyone is surprised that for profit business will leverage any pressure they can to increase their stake in their given business. But what I believe is being discussed here is more related to practices of unfairly excluding organizations and artists from projects/partnerships/employment opportunities.

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