Recently Larry LeBlanc sat down to interview Arty Erk. Currently a partner at Citrin Cooperman, Erk has worked with issues relating to royalty compliance, tour accounting, royalty statements, and many other financial matters, and has over thirty years of industry experience.
__________________________________Guest post by Larry LeBlanc for Celebrity Access
As with a casino alert with an accomplished gambler, major labels operating in America just might keep a photo of CPA Arty Erk at security in order to know he’s about to be on their premises conducting an audit for a client.
For over three decades, Erk has overseen royalty compliance audits, tour accounting, and royalty statements to a high-level entertainment clientele that includes artists, songwriters, and producers, as well as prominent music publishers, and recording and film companies.
Erk not only has extensive experience in tax-related issues specific to the music industry, but he also provides administration and financial guidance on all facets of his clients’ business and personal lives.
As an expert on royalty and copyright matters, Erk is regularly hired to provide litigation support and testimony in high-profile court cases.
After 20 years as a partner in the firm Wlodinguer, Erk & Chanzis, CPAs, Erk joined Citrin Cooperman in 2010.
He graduated from Hofstra University in Long Island, New York with a B.A. in accounting.
You oversee estate work, tour accounting, royalty audits and administration for music publishers, writers, producers, actors, and record and film companies?
Pretty much. Estate work not so much, but the others yes.
But you’ve been involved in overseeing estates, including for J Dilla and others.
I did the Biggie estate for many years. Christopher Wallace.
Successful artists tend to have an infrastructure in place to deal with their revenues, and with royalties but if they die and that obligations falls to their family, they may be at lost at what to do. As well, so many things come suddenly out of the woodwork, including bootlegs and so on.
As you say, people doing bootlegs, and they figure they can get away with it. They figure that someone won’t catch them. Not so much in the Biggie estate. I had to teach his mom Voletta Wallace, and (wife) Faith Evans exactly what was in there. I got involved. I was considered the least-conflicted, I guess, business manager at the time. We are talking about around ’08. I had done an audit of EMI Music for the estate, and then I got nominated to be the business manager.
[In 1997, Christopher Wallace--better known by his stage names The Notorious B.I.G, Biggie, or Biggie Smalls--was killed by an unknown assailant in a drive-by shooting in Los Angeles. His double-disc album “Life After Death,” released 16 days later, rose to #1 on the U.S. album charts. Two more albums have been released since his death. He has certified sales of 17 million units just in the United States.]
As I said, often the family which is caught unaware by the artist’s death, is greatly unprepared for the deluge of legal hassles that emerge, including copyright infringements.
In this case, I had to gather together all of the copyrights that Biggie owned, and become familiar with them. All the recordings that went through Bad Boy Records, and the other affairs that were out there. He had his By Storm Management. We were all at a meeting, and then I started digging around, and we started garnering everything. Voletta Wallace and Faith Evans were important here. We ended up being able to collect a lot of money for the estate that otherwise might have gone by the wayside. So you just have to go one step at a time and organize it.
In the J Dilla case, there was stuff (music) all over the place, and it was really a bear try to police that.
[When 32-year-old beatmaker/mixer/rapper J Dilla, born James Yancey, passed away in 2006, he was an underground legend with a string of hits that came from working with The Pharcyde, De La Soul, A Tribe Called Quest, Erykah Badu, Common, and Janet Jackson.]
He worked on so many projects with so many different people. He was so brilliant.
He had beats all over the place. The problem there was that you would have to spend so much money to lock down a lot of things that were out there that you end up at negative (net revenue) at that point.
Extensive copyright infringement is obviously harmful to any artist but for an estate keeping up with the infringers is like playing whack-a-mole.
Which is what happened with the J Dilla estate. I ended up having to take out a full page advertisement in Billboard telling the industry that any licensed music had to come through me, and not come through the wannabees that said that they represented his catalog.
What was the outcome?
His estate is still not settled after all these years. I resigned my trustee position back in March ’09. Here we are now, and it’s still not settled.
And he passed away in 2006.
Yep. In early 2006.
In testifying for Michael Jackson's mother Katherine in her lawsuit against AEG Live, you projected that Michael Jackson would have earned between $1.1 billion and $1.5 billion if he performed a 37-month, 260-show tour, and would have crafted a Las Vegas show based on his music and archival footage. This would have been, of course, Michael’s farewell to live performance.I think that’s what the anticipation was, but it was planned to be a worldwide tour, not just the 50 shows at the O2 in London. You can find it in the court files. I came up with the 260 (shows). AEG came up with, I think, 160 to 180 (shows). I don’t recall the exact figure. They had him going to places that I didn’t even have in my projections. I had him going to South America, Mexico, and China; but they did have India, Japan, France and the U.S. But their proposed budget was for arenas, alright? They had no clue what the demand was. They came up with two budgets. One in Sept ’08, and the other was a few days before they announced the O2 shows. As you know the demand was incredible.
[“This Is It” was a planned residency show of 50 concerts by Michael Jackson to be held at The O2 Arena in London. They were scheduled to begin in July 2009 and continue through to March 2010. By then there had been considerable use of AEG’s multiple-show residency concept at O2 for such acts as Prince, the Spice Girls, and Bon Jovi. Rob Hallett, then president of international touring, AEG Live, developed a remarkable ad break to launch the O2 dates. On ITV’s “Dancing On Ice” AEG took a 30 second ad in the final break that was viewed by 11 million people. The commercial started with Jackson’s greatest hits edited together with performance video. At the end was the tagline, “Michael Jackson Coming Live To London” with the website (address). Originally only 10 concerts were announced, but the tickets were sold out in less than an hour, and public demand for tickets resulted in 40 more concerts being added, making 50 in total.]
Tickets for the O2 dates sold like crazy. Some 800,000 tickets were sold in two hours.
Right which just automatically had me thinking, “He’s going to fill stadiums. But they (AEG Live) didn’t have stadiums in there (in their projections) because in their budgets their proposals were pre-dated. I think it was March 5th, 2009 when they announced the tour. It was sold out in two hours. Fifty shows in two hours, and it was oversubscribed by several times. It was incredible. Why would you think that he couldn’t fill stadiums?
That was a sad case all around. For his mother and...
And for the children. Just the whole situation. I didn’t read the whole decision in the case but, just as a layman, I would think that if you find a doctor was an employee of the defendant, there should be liability. But I guess that there was a whole series of questions, if they (the jury) didn’t answer in the Jacksons’ favor, when it was all said and done.
[Michael Jackson died two weeks before his "This Is It" concerts, organized by AEG Live, were to have debuted in London. The coroner ruled Jackson died from a fatal combination of sedatives and propofol that Dr. Conrad Murray, the physician convicted of involuntary manslaughter in his death, told investigators he used to put the superstar to sleep almost every night in the month before his death.
The central issue of the trial that lasted more than five months was: Did AEG Live hire or supervise Dr. Murray?
The Jacksons argued that AEG executives knew about Jackson’s weakened health, and his past use of drugs. That AEG executives pressured Jackson and Murray to meet their schedule to prepare for the London shows.
AEG contended that Michael Jackson was responsible for his own demise, that he chose Murray to be his full-time doctor, and that his drug addiction led him to a series of fatal choices.]
The jury found AEG Live not to be liable.
Yes. What a waste of talent. I saw Michael twice in the ‘80s when I was a partner at Gelfand (Gelfand, Rennert & Feldman). I saw the “Victory Tour” at the (Madison Square) Garden with his brothers, and the “Bad” tour. Both shows were spectacular.
In the ‘80s as well, you audited one of the music industry’s great scoundrels, Morris Levy, owner of Roulette Records. You asked to see some records, and he said they had been thrown out.
(Laughing) Yeah they threw them out. I was sitting there doing this audit for this (writer/producer) Michael Cleveland, who had a decent hit with “Last Night a D.J. Saved My Life” (recorded by Indeep in 1983). I’m sitting there, and all of the record manufacturing records I had asked for--the guy next to me was sitting there with a shredding machine and with a big smile on his face--he was just shredding away, and there wasn’t a thing that I could do about. I just shook my head.
Did Morris admit to owing your client money?
He admitted that he owed the kid money. I won’t go into the language, but he said, “I told the kid if he gave me another record I would make it up to him. He told me to eff myself.” So needless to say it didn’t happen.
In 2002 Don Henley, during a California Senate committee hearing on the music industry, made the point that. “there’s no penalty for negligence or underpaying in the music industry.” The attitude for years from labels to artists was, “Catch us.”
That’s true, and they won’t pay on interest on this (what is discovered to be owed in an audit). In all my years, the only label that ever did was back in the Elektra/Nonesuch days with Carly Simon. They had those contracts that recognized interest. The labels would tell you, “It’s not in the contract. We don’t owe you.” Whereas I found the foreign publishers, and record companies they seem to be more honorable in that regard. They would pay you a little bit of extra freight for getting things wrong. But, yeah, the labels here (in the U.S.), especially nowadays the toughest thing to do is to settle the royalty on it (an audit) even when you show it to them in black-and-white. The environment has gotten very, very difficult.
Underpayment has been so prevalent in the recording industry that it is standard for major artists to ask for an audit. Labels contend that audits and litigation are tactics used by artists and managers to negotiate better deal terms. True?
Well, the more successful ones will do that. A lot of times you will find that they will time an audit (around contract negotiations). They will hire me or whomever to do the audit, and then go in to negotiate or re-negotiate their deal. A lot of times it will be settled within the new agreement if, in fact, they reach a new agreement.
Music industry tradition is that artists are screwed on their first and second albums and, if successful, negotiate new terms prior to the third release. That’s the way it was for years unless an artist hit it out of the box on the first album.
It was like that for decades, but not usually after the first album. The first album they were able to get a big advance out of the label? So what? The rate was still pretty low. It was always the sophomore album that was the key. If they had a very successful or moderately successful first album, and had a very successful sophomore album, then you could go and re-negotiate. You usually didn’t have to wait until you had the third album out for success. It always was, “Can you get over the hump? Can you get over the hump of the sophomore album?”
That went on for decades.
Oh God yes, and to an extent now. But to a much lesser extent now because I can almost count between my hands, and I don’t know if I would go into my toes, the number of artists that sell enough records to really twist arms a lot at a label.
Few labels take risks on artists today. It’s more common for a label to only agree to an EP or singles’ deal. The era of the big advances is long gone.
For most people that is very true. There is a little bit of competition for somebody that has generated some interest. They have such a core audience that they have built independently, and there is just such a big vibe on it. Then you might be able to get a decent deal. Maybe a $300,000 deal. But those days of the megabucks are not there anymore. Also a lot of new artists will do things on their own. What the labels tend to do is to sign artists to a deal, and guarantee them a single. Then throw it against the wall and see if it sticks. If it does then, maybe, they will really start to put some marketing and promotion behind it. Otherwise, it’s really up to the artist and the manager to get music to go viral and all that. Times have really changed.
You’d think with it being easier to observe sales and play patterns today, that there would be greater transparency regarding royalty payments. It seems as difficult as the old days when artists had to wait to see what retailers returned before being paid. It still remains difficult to collect royalties from record companies.
Well, the record companies have their online hot sales system where they can figure sales out as they happen each day. They don’t give you access to that though. You, as the artist or whomever your representative, will never be given permission to log into their system to be able to see what is going on. Basically, what you’d have to do go to SoundScan, but that’s for the U.S. Overseas, that isn’t the case.
Free streaming may account for the lion’s share of overall streaming users but advertising revenue generated by platforms such as Spotify and YouTube doesn’t seem sufficient to ensure fair returns to artists, and songwriters. In a recent BBC Radio 4 documentary on the music business, Peter Mensch, manager of Metallica, Red Hot Chili Peppers and Muse criticized YouTube, declaring, “They're the devil. We don't get paid at all."
The problem is that there are probably different buckets that so-called sales will drop into.
The artists and songwriters signed up directly to such platforms may be seeing better returns if they generating a lot of viewership, but it’s not as transparent for those signed with labels.
No I don’t think so at all. If you are the one that licensed it to an Apple you might get access to their system to see, but if you are on a label or whatever, or if you go to an aggregator, you don’t have access to that stuff.
In determining fair payment for creators in the digital space we shouldn’t lose sight that there are competing interests. One interest concerns the sound record, the other is in the composition copyright. Not necessarily the same interests.
No. There are obviously different interests and they are still fighting over the copyright rates. The labels pretty much have it set, but the labels have ownership interest in a bunch of these (music publishers).
It is, however, now clear that any digital business considering entering the music market must acknowledge the importance of independent music. They must negotiate with the independent labels or they will not be able to offer their customers a compelling proposition.
Oh yeah. It’s a hefty task for any new company to break into this business. It’s expensive.
We have seen massive losses by digital platforms offering music.
Well, the labels get those big advances...
The multinationals’ global market share, between 65% and 70%, gives them leverage to negotiate favorable deals with platform players offering music. The majors negotiate substantial advances from those companies seeking access to their catalogues. Interestingly, Spotify claims it still isn’t making money at this point.
So they say. In terms of the click-through and all I can’t say that I know enough about the whole flow, and procedure on that. That’s one thing that I don’t have complete knowledge off. I’m aware of it, and I know it happens, and the income comes through, but we fight to get the information from the labels. Invariably, they won’t cough it up.
Do lawyers have considerable influence on who will be hired as an accountant for their entertainment clients?
Everybody has their favorites. Occasionally, there are certain artists that I haven’t gotten because there might be a particular attorney who might steer them to somebody that they work with.
They have their own team?
They do. Sometimes, in order to steer away from a conflict, they might recommend two or three people and suggest the artist meet with them.
Do attorneys recommend you to clients?
Yes, absolutely. The business really comes in from referrals. Referrals because you have your reputation from work that you have done throughout the years. Most everybody in the business knows me. Either knows me or knows of me because I have been around for a long time. You will find that a lot of attorneys will look to me for their royalty audits, but others understand that I do a bit of business management as well. So, yes, that happens.
For an artist making quite a bit of money by their third or fourth album what advice would you give them?
First off, I would ask them if the previous accountant, or if they didn’t have one, did they establish the pension plan? I would ask if they have a separate company set up for touring, which they should have for liability purposes. Then I would look at what insurance coverage they have, personal and business. We review virtually everything. We would take them through everything, virtually step-by-step. If they chose us to be their business managers, we would either work with their current bank accounts or we establish bank accounts. We generally use City National Bank which seems to be the entertainment bank.
Do you generally work directly with the artist’s manager or directly with the artist?
We work with both but always directly with the artist. We should because we are the ones handling their money. They are always signers on their own accounts. I always say to them, “If you think that something isn’t right, you can do one of three things. You can show up in my office unannounced, and say that you want to see your books and records.” Or, if they have online access, they can look online and see the activity there. Or they can walk right into the bank. It’s their account. So they can look at anything.
We do work with the managers to the extent that when the artist goes out on tour we help put it together, and are there when they are negotiating the (recording) deals. I have been doing royalties since the end of 1978. So I have seen virtually any kind of deal that you could think of. Nothing would surprise me right now. I’ve seen the deals from the top artists to the dregs.
You’ve seen the work-for-hire contracts, and have dealt with California’s 7-year statute that limits the amount of time an individual can be held to a contract for personal services?
(Laughing) Well, they won’t usually say “seven-year statute,” but they will say the work-for-hire stuff. Normally, in some of the older contracts, they may only have a six months right to audit or until you can object. Some will have a year. Some will have two years. If you are really an established artist on the label two or three years and still signed, I would imagine that they (the artist) have had a modest amount of success, so they will have some leverage with the label because we interact with the label, especially if they are getting tour support or whatever.
Tour support doesn’t happen anymore.
No, it doesn’t.
Each of the multinational music companies have different royalty accounting methods. Are they quite different?
They can be. We’re now down to three majors. So Sony has its own system. Universal does. There are some similarities between them. Then Warners does. So anybody who is not familiar with the presentation on a statement wouldn’t understand some aspects because sometimes a column on a royalty statement may.... It’s just like an Excel worksheet where there might be a formula that comes up with the number but it’s not that every column is times this or times that and equals this. Sometimes there are some factors in there where they don’t pay on 100% of the royalty rate. They pay on 80%. When CDs came out they had three-quarter rates or 80% rates and Sony sometimes used a different rate for established artist that was somewhat higher.
Lest we forget the new technology clauses.
Yeah. Then when streaming and downloads first came out then it was 85% (royalty rate) which we all thought was excessive as there were no packaging costs incurred by the record company.
Has consolidation brought increased problems particularly for heritage artists that have had catalogs transferred from one company to another. Has consolidation been a problem?
It can be. Just the function of bringing the companies together and picking up their systems and merging them into their systems.
I’ve found that labels don’t always know what catalogs they own.
Not the big ones. They are pretty crafty.
I’m talking about when they have purchased a smaller label or a production company’s catalog.
Oh yeah and they might not have registered it properly. I haven’t really run across that. Most of the clients that I have had, big and small, they all seem to be registered but you can’t get co-operation from the label to tell you otherwise unless it’s an artist with some leverage.
The original paper contracts aren’t always available to absolutely determine royalties.
Yes, there have been lot of times for contracts for old-time artists that they would come back, and say “We don’t have them.” Those files might be in storage or could have been lost in transition or whatever. Then the onus is really on the artist, and I guess his lawyer, if the lawyer is still around.
All those tiny independent labels in the ‘50s which have gone through multiple owners.
You had that with B.J. Thomas with the label (Gusto Records). There was a fight on whether they had the royalty obligations. I think they (the court) ruled that “Hey you bought it, you owe on the previous liability even if you have been indemnified for the darn thing.”
[In 1990 B.J. Thomas and Gene Pitney won a case in which they claimed that Gusto Records and GML Inc. in Nashville had improperly seized their master recordings that had passed through several owners over the years. In 1998, The Kingsmen won a case against Gusto Records as well and were awarded ownership of their Wand catalog, including the classic recording of “Louie Louie.”]
You were a part of the famous Steve Popovich and Cleveland International case against Sony Music over Meat Loaf’s “Bat Out of Hell” album.
The one (started) back in 1997 and 1998. That lawsuit was settled in 2005. Settled. I mean that Steve won the case. He got the money. That part got taken care of, but he was still chasing Sony up to the date of his death (in 2011).
[As director of promotion, and then VP of promotion at CBS Records, Steve Popovich was instrumental in the careers of Bruce Springsteen, Bob Dylan, Johnny Cash, Earth Wind & Fire, Chicago, Johnny Mathis, Janis Joplin, Santana, and others. In the early to mid 70’s in A&R at Epic Records, Popovich signed Southside Johnny and the Asbury Jukes, Cheap Trick, Boston, Charlie Rich, Mott The Hoople, and others. In 1977, he began his own imprint label, Cleveland International, as part of the Epic/CBS Records family. The first artist signed was Meat Loaf, whose debut album “Bat Out of Hell” in 1977 eventually sold over 40 million copies worldwide. In 1995, Popovich sued Sony Music for unpaid royalties from the sales of “Bat Out of Hell.” A decade later the company was directed to pay damages of over $5 million.]
Then Steve wasn’t happy about the new packaging on the CDs for “Bat Out of Hell.”
They were supposed to have the (Cleveland International) logo. The logo was part of it but not as significant as when he had the lawsuit back in 2005. We had an audit that was worth a piece of change and we were having a hard time settling it with Sony. Ultimately, it got settled. I can’t go into the settlement.
Steve was forever at the barricades over the Sony case.
He was consumed by it.
It killed him in the end. He was only 68 when he died.
I think that it did. I wanted him to step away with it. The stress was too much. Not that I knew that he was going to have a heart attack but his son (Steve Jr.) was married and he had grandkids, and he enjoyed his grandchildren a lot.
In 2012, Rihanna sued her former accountants, blaming them for millions of dollars in losses, including even blaming them for a purchase of a new home, saying competent business managers would have told her that her tour was losing money, and would have told her that it would not be advisable to buy such an expensive home.
Given the threat of lawsuits from an unhappy client, what advice do you give an artist in order to protect both them and your firm? It’s a matter of education is it not?
It is. It is. Sometimes when you do everything, meaning that an accountant does everything including doing due diligence; have a really good engineer come and check out the place (the home), and make sure that it will stay in one piece so to speak. You look around at the surrounding market, especially with a high value home, and see at least what else there is. You get an appraisal, obviously you will get too see what the issues are so you can advise your client. Then you look at the income and, if they are taking a mortgage out, see if they can afford it with their income stream. Then you make your recommendation. But sometimes the artist will overrule you. It’s their money. I always say to them in the end, “It’s your money. I am here to advise you.” So what it (potential litigation) forces us to do is to document ourselves rather than to just have verbal conversations. You know, in the United States anybody can sue anybody. The problem is that it’s expensive.
But you also don’t want to be the figure repeatedly saying “No, no, no” to a client or they will say, “I will find someone who will say ‘yes, yes, yes.’”
Yeah, but you know what? You have to keep it all in perspective. I understand what you are saying about not saying that (“no”) because we don’t want to lose the clients, especially one you might earn a nice fee from. However, you really need to do your job and advise them properly. There are clients that I consider well-grounded. You can reason with them and you can go through everything and they will usually make an intelligent decision on things. And sometimes the grounded ones will say, “Well, I want to do it anyway.” Say that they want to buy a piece of artwork or whatever. Sometimes you will get the kids, and depending on their upbringing, some will listen to you; even if they have some of their own research. The business can be crazy, especially, when they are touring and doing shows there are all kinds of people in their ear. What I tell client is, “If you are out there and somebody tells you, ‘Hey it should be this way and not this way’ come and tell me about it. I will tell you one of three things. I will say, ‘I will give you the answer. I will show where the answer is from. I will find the answer and I will show you the backup of that answer. Or I will tell you somebody to sit with who can verify the information.” Because people tell you all kinds of sorts of things in this business.
Top level artists make money on tours by streamlining personnel, having crews doing multiple jobs thus saving on per diems, hotels, flights and salaries, and routing in a more efficient manner thus saving on trucking and bus fuel costs. Any artist losing money on a tour looks for someone to blame, starting with the manager followed by the accountant.
Well, that’s true. You can’t avoid that but what you have to do is you have to do your budgets, and you show that either they are going to lose money or they are going to break even. And, if they made a decision while on the road like “I want this extra bus” or they want to go here and fly here and then fly back then it’s their decision. As I said, fortunately or unfortunately, we have to document everything.
With touring there are a number of issues including local taxes in each city, state and country. Getting tax waivers in advance helps the artist in the long run
It does. There are states like Wisconsin that stick to their guns. You have to file a budget with them more than 30 days before the show so you can negotiate the rate. In California, you can probably file two weeks before to negotiate a rate down from 8% down to 2%.
Withholding taxes in foreign countries can be an issue.
Right. In the UK we will hire a local UK accountant to deal with Inland Revenue and agree on a tax.
Do you sit in on meetings where tours are being planned by managers and promoters?
The manager, and the attorney to an extent, will work out some of the details, but really it’s the manager because they are going to work out the routing, what the fee is per show. Then they feed me the information, and I will work with the tour manager. We will work up a budget for the salaries and for buses, flights, hotels whatever is involved. The promoter is going to make an offer for X amount, $15,000 to $500,000, whatever it is. We will work from there. First off the artist and the manager decide if that is enough money overall. Not worrying about the expenses. Just thinking about a stature of the artist, and that this is the money that they want. If the promoters are willing to spend that kind of money or guarantee that kind of money. Then we work out the budgets, and see where we stand. If the artist’s net profit is too low, we might go back to the promoter and say, “You need to throw in X amount of money for sound and lights.”
Do you still do music publishing administration?
On a small scale because for the guys with big catalogs it’s a lot of labor. It’s very labor intensive as well as the publishing audits themselves are very labor intensive. Usually, I say if you are only going to audit domestic and not foreign, it can be too expensive to do it because you usually don‘t find a lot of money with the big publishers for domestic administration. Foreign is where you usually run into different things a with neighboring rights, and black boxes.
[If there are gaps in the (foreign) data, money goes undistributed for a time at least into “black boxes,” allocated for unidentified interests to claim.After a time, that unidentifiable “black box” money is distributed on a pro-rata basis to the top earning creators by the performing rights organizations, Sound Exchange, and others.]
Where are you from?
I grew up on Long Island. East Meadow, Long Island.
Where did you go to school?
I’m the product of 12 years of Catholic school. I went to St Brigid school in Westbury, and I went to Holy Trinity High School, the first graduating class, in the Hicksville diocese.
Were you into music as a teenager?
Oh yeah, absolutely. I went to shows in LBI east and west, and McDimples in Roslyn. I used to play the drums in a standards band. The guys were 30ish, I was 19. We played in bars. They played ‘60s and early ‘70s stuff. It was the first time that I ran into racism on Long Island because the lead guitarist was a black guy. This was ’71 to ’72, and we lost gigs because of that.
Were you performing while in high school or college?
I was in college at that time.
Did you learn to play drums wearing earphones and listening to your favorite records?
No I used to blast the music playing in the basement. I grew up in a split level and I used to blast. I taught myself. I learned by listening to the Kinks, early Stones. Music that had simple beats. I progressed from there when hard rock started.
Were you any good?
I was okay at least at the level of the style of Ringo Starr, let’s say. But I could never play the double bass like Led Zeppelin introduced us to.
When did you last perform?
I haven’t had drum sticks in my hand in 30 years.
After you graduated from Hofstra University with a bachelor's degree in accounting what did you do?
I went to Haskins & Sells, which is now Deloitte and Touché. I stayed there two years. I was getting slotted in mainly brokerage. Merrill Lynch was my big client six months out of the year.
Not bad coming out of school.
Yeah, but the way that I got the job was interesting. When I was at Hofstra I was only an average student. I only had a B average. In the Fall of my senior year there were the Big 8 accounting firms which all had Long Island offices. You interviewed with all them. The only thing to go on was if you had a 3.6, a 3.8, or a 4.0 average. I wasn’t that guy. So I didn’t get hired. Right around Thanksgiving I got a call from the placement office at Hofstra saying that Haskins & Sells was hiring at their 2 Broadway office are you interested?” I said, “Sure.”
Did you at least look like an accountant in those days?
Back in those days I had long blond hair. I wore blue-tinted wire-framed glasses. I go driving into New York in my ’63 VW bug which had three different colors, and big fat tires. I park on Whitehall Street near 2 Broadway not knowing the city. Never driven in the city before. You aren’t supposed to park on the street. Thank God, they didn’t have towing zones back then. So I go into the interview where everybody in the office was the typical white collar, CPA short-cropped hair, blue-pinned suit, white shirt, red tie. Here I am with my mismatched clothes and sport jacket, checkered shirt and yellow tie. I’m not giving the person I’m meeting any reason for hiring me. He sits back and says, “If we hire you, you’d have to get your hair cut.” There’s 5 or 10 seconds or so of silence. I’m just looking at him. I then literally slapped my hand down on the desk and said, “Sold. I will get it cut this afternoon.” The guy gave me a startled look and said, “I thought you would say no.
I had a roommate who was fired from IBM in the late ‘60s for having a beard.
They were really strict. This was in 1973. It was just after they stopped requiring staff to wear hats outside the office. I worked five weeks straight, dawn to after dusk, 7 days a week, and the guy gave me top ratings, and I was hired. I would never have been hired by a big agency with the marks that I had.
After Haskins & Sells?
Then I was at Gulf Western, which is now Viacom, for 18 months. I did about 70% traveling which was too much. They used to own Sega (Games) when it was a pinball company, and they had big-screen televisions. Then I was at Paramount Famous Music for a while. I got a little taste of it (the music industry) Then I went to RCA Corp. I was over at the record company for about 6 or 7 months. I really didn’t care for it because I didn’t see any growth there. So I went back to records when I got a call from a headhunter saying, “An entertainment accounting firm, for the first time is using a headhunter in New York, is looking to build a royalty audit department. Are you interested?” I said, “Sure.” So I went in there, and got hired on the spot.
You began at Gelfand, Rennert & Feldman in 1978, and were there 9 years?
For just about 10 years. I made partner after about 2/12 years. Twelve of us were general partners. Gelfand became a premier firm. I had a good run there. I built their east coast royalty audit operation that included South Africa, which I had to go to a few times. You name it and I did it when I was there. And I lived it afterwards.
For two decades you were a partner in the firm Wlodinguer, Erk & Chanzis, CPAs and joined Citrin Cooperman in 2010.
Yes, with Allen Chanzis and Victor Wlodinguer. We had a good run, and then we figured with the world changing internationally, we needed to get more infrastructure and support. Then we met Joel Cooperman (managing partner at Citrin Cooperman) and we liked him and what he had to say. We struck a deal and joined in 2010 and we like it here.
Every day at work for you is different? Deluged by emails and clients texting?
There’s always something going on here. It’s not typical. As you said with the emails, that’s the thing with technology. Everybody wants instant gratification. “Give it to me now.” It’s hard to avoid them (emails). It’s not like back in the day when you typed letters, and you mailed them out or you made a phone call because you didn’t have cell phones then.
You have to be reachable either by email or cell phone for your clients.
Yes, it’s true but I don’t always stare at my phone after hours. I always tell a client—I have the sound turned off for the emails— “Send me a text or call me.” My clients have my number. I always give them my cell and my home phone number. So I’m available. I always tell them that I am available from about 7 AM to 11 PM. After 11 PM, I’m out and unless they are calling because they got arrested.
More people today want to be contacted by either email or by texting and are less prone to answer their phone.
The younger ones are less prone to pick up the phone.
I’m not sure relationships can be built via texting or emails.
I agree wholeheartedly with you on that. I think the personal touch...I take the time to reach out to my clients. Sometimes by email or by phone just to see how they are doing. It’s not always about business. I always ask, if they have family, “How is the family doing?” Is this one playing soccer or whatever.
Of course, calls to anyone working in entertainment in Los Angeles may not always be returned as quickly.
It’s the movie business. It used to be “What have you done for me lately.” Now it’s “What are you doing for me right at this particular moment?” It is. I’m amazed at the amount of money that flies around these days from 30 years or so ago.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record.
He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is co-author of the book “Music From Far And Wide.”
Larry is the recipient of the 2013 Walt Grealis Special Achievement Award, recognizing individuals who have made an impact on the Canadian music industry. He is a board member of the Mariposa Folk Festival in Orillia,, Ontario, and a consultant to the National Music Centre in Calgary, Alberta.
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