Last fall, the Universal Music Group, owners of the premier classical labels Decca and Deutsche Grammophon, sent shock waves through the industry when they launched, without warning, the Universal Music Artist Agency, offering the company's glamorous roster of recording artists -- we are talking the likes of Renée Fleming and Lang Lang -- for galas, corporate events, promotional campaigns and even Christmas parties. Mind you, these stars were not Universal's clients.
Under the contracts the world of classical music is used to, the person who negotiates an artist's services for performances, personal appearances, endorsements, recording deals and any other activities is the artist's manager. The historic role of the recording company -- whether Universal or a competitor like Sony Classical or EMI Classics -- has been to finance recordings and handle manufacturing, distribution, press and promotion, while retaining copyright in perpetuity.
These days, the recording piece is a losing proposition. Last year, Nielsen SoundScan, which tracks point-of-purchase sales of recorded music in the U.S., reported a 7.2% decline in sales of classical music (by no means the hardest-hit sector), amounting to a pathetic 18 million units in all formats. The best-selling album of the year was the pop baritone Josh Groban's "Noel," with 3.7 million units sold. Irony of ironies, it counted as classical. (Sure, and "Dancing With the Stars" is the Bolshoi Ballet.) But then, not one of the 10 top-selling "classical" albums would pass muster with the Bach-to-Boulez crowd. Mr. Groban has three spots on the list, as does Il Divo; Andrea Bocelli has two, with one slot each left over for Paul Potts and the lullaby compilation "Baby Einstein." To put all this in perspective, Il Divo's 10th-place Christmas album sold just 172,000 units.
No wonder, then, if Universal wants in on more lucrative aspects of the industry that have nothing whatever to do with recordings per se. Predictably, artists' managers were incensed, none more so than Jeffrey D. Vanderveen, director of the Vocal Division of IMG Artists, and architect of the dazzling career of the Russian soprano Anna Netrebko, a rare classical artist with a glimmer of rock-star allure. Her opera galas (undiluted by pop and light classics) sell out arenas in Germany and Austria the way the Three Tenors used to all over the world.
Mr. Vanderveen lost no time firing off ferocious emails, with prompt backup from the IMGA legal department, and Universal ceased and desisted for a time. Last week, however, the company announced the creation of Universal Music Classical Artists Management and Production, a new division designed to provide management services for prominent classical musicians and to produce live events for them. Managing director of the enterprise: Mr. Vanderveen, with his golden girl Ms. Netrebko in tow.
Understandably, Mr. Vanderveen's former employer is going after him in civil court for conspiracy and breach of contract. His new boss, Christopher Roberts -- president of Universal Music Group International, Classics & Jazz -- is also named in the complaint. (Neither would comment for this article.) In prose to delight readers of Dickens, IMGA alleges a "brazen" conspiracy by Mr. Roberts, Mr. Vanderveen and others "to steal valuable assets of IMGA, including a number of high profile music clients, and to form a new venture that would compete directly with IMGA in the arts management business." Clandestine meetings, breaches of confidentiality, fiduciary monkey business: It's all spelled out in documents that will be hard to explain away.
A tempest in a tea cup, some will say. A manager has moved from one agency to another. So what? "It happens all the time," says Barrett Wissman, the chairman and owner of IMGA , and Mr. Vanderveen's former boss. "But here much more is at stake. The suit is about huge conflicts of interest. Who will protect the artist? No one is talking about that. And many of the artists don't even see what's coming."
Mr. Wissman conjures up scenarios of junior Artur Rubinsteins and Renata Tebaldis suckered into indentured servitude for the sake of a coveted recording contract with a major label. You want to sing Schubert in Salzburg? Too bad, this is business. It's show tunes at the Garden for you. For an analogy, think back to Hollywood in the days of the almighty studios, when the moguls owned stars virtually body and soul.
But the contemporary world of pop music may offer a more pertinent analogy. In the January issue of Wired magazine, the multitalented David Byrne -- ex of Talking Heads -- discussed six business models, analyzing how each one affects artistic control. Of particular interest in this context was the "360," or equity, deal, covering the full circle of business opportunities -- "the T-shirts, the records, the concerts, the videos, the BBQ sauce." Under this scenario, "you can achieve wide saturation and sales, boosted by a hardworking machine that stands to benefit from everything you do. The artist becomes a brand, owned and operated by the label."
Madonna recently accepted a $120 million deal from Live Nation in a 360. Presumably she has the clout to make it work in her favor, but Mr. Byrne is not so sure. "As a general rule," he writes, "as the cash comes in, creative control goes out. The equity partner simply has too much at stake."
Now Universal appears to be betting that classical talent can and should be branded the same way as Madonna. Though some artists might be scared off by Mr. Byrne's caveat, Ms. Netrebko is not. "Jeffrey Vanderveen has cared for me like a baby for 10 years," she says. "He knows better what to do than me. He'll still be working for me the same as before."
Perhaps, but at Universal he serves a second master. The Norwegian pianist Leif Ove Andsnes, wants an ally who answers only to him. "The recording company has to think commercially," he says. "That's the nature of their enterprise. As an artist, I need room to think completely differently, to think about which projects are artistically interesting and only that, and then to see if we can sell them."
The disagreements are never-ending, and recording executives are not the only ones who may think an artist's ideas too esoteric. Lately, Mr. Andsnes had to battle presenters in Paris who thought Debussy piano pieces too recherché for the French. How much harder it would have been had his manager -- who is paid to represent his point of view -- been a paid operative of his record label as well, working hand in glove with the impresario. Here we touch the crux of the matter: Under such circumstances, manager and impresario would be united in the common interest of maximizing profits for themselves rather than for the artist. And the artist's creative agenda would have no true defender at all.
During intermission at the Metropolitan Opera, a competitor of Mr. Wissman's explained some of the basics, on condition of anonymity. "Say I manage Diana Damrau," he said, referring to the diva of the evening. "As her manager, my interest is to maximize her fee, and thus my commission. But if I'm presenting her and selling tickets, my interest is to reduce her fee to zero or even to get her to pay me for the privilege of singing, and thus to maximize my take at the box office." By the lights of a leading tycoon in the business, who likewise insisted on anonymity, this exegesis is naïve. "Where there's transparency," he said, "there's no conflict of interest."
But transparency cannot be taken for granted. Another ranking artists manager tells of an impresario who brokered a tour involving one of his clients and an orchestra, both under exclusive contract to the same label. Harping on the "family tie," the impresario wheedled the soloist into a bargain fee, then turned around and marketed the package behind the backs of manager and artist at a hefty premium, which he kept for himself.
This is the kind of abuse Mr. Wissman of IMGA foresees much more of, and his defense of the artists' due is no pose. Variously identified in the media as a financier, philanthropist and venture capitalist, he is also a trained concert pianist, even if his business interests seldom leave him time to play in public. What drives his lawsuit is a principle he regards as the cornerstone of his profession. "The real value in this industry," he insists, "lies with the artist and intellectual property."
Like Mr. Wissman, Matthew A. Epstein, vice president and director of CAMI Vocal, a division of Columbia Artists Management Inc., sees serious problems with Universal's new model. "It is worrisome," he says, "for presenters and management to be the same. Managers always think they're the artist. They think they own the artist, which they don't. They work for the artist. The artist has free choice. The artist can leave. The commercial interests want the stadium appearances, the glamour. They don't want the artist to do what the artist does." At the same time, Mr. Epstein cannot help conceding that the music industry is evolving at mach speed -- with recording companies in the position of the dinosaurs at the end of the Cretaceous. "The problem for the record companies is that soon there will be nothing tangible to buy any more. The record companies can't be real record companies any more. That's the real story here."
What lies ahead? "In the future, music may be distributed by iTunes or by Universal," Mr. Wissman acknowledges. "But no matter what happens, artists will still need managers who negotiate their side of the equation."