How Does Unambiguous Language Hurt Artist and Managers ( American Idol Co Founder Vs Sony Music Entertainment)

The lawsuit between 19 Recordings and Sony Music Entertainment enlightens us on the importance of clearly expressing our terms of agreement with other parties and constituents of a contract. Evidentially, unambiguous language grants parties the opportunity to take advantage of operating words with broad definitions. In particular these words permit backdoors in a contract. In the case of 19 Recordings vs. Sony Music Entertainment , SME has been accused of  “violating the licensing agreements revenue structure”. At the same time 19 Recordings is suing SME for breach of contract and breach of covenant of good faith and fair dealing. Ultimately SME is being sued for intentionally not using the  “correct operating words” in its agreement with 19 Recordings. 

Apparently, the SME is racking up revenue from streaming sales that should be considered broadcasts, and not sales with streaming companies. At the same time Sony Music Entertainment made an album sales agreement with 19Recordings. However, Sony Music Entertainment took it upon them to start selling songs individually from the album without 19Recordings consent. In the end, generating a profit for themselves underpaying 19Recordings and their artists.

After  reviewing this situation ,it is critical that artist’s and managers mean what they say, and say what they mean. At the same time, its important to anticipate consumers buying behavior and technology trends. During the time this agreement  took place albums were being sold as fully packaged albums. 19 Recordings probably  didn’t expect for album sales to break down into each song individually being sold. Therefore the option of selling’s songs individually allowed Sony Music Entertainment to take advantage of  19Recordings   terms of agreement.

In short, read your contracts. As important as it is to build a brand you also want to protect it. The money that we take off the table is just as important as the money we leave on the table. To avoid leaving money on the table be precise and clear.  In doing so we lock all back doors.

References:

http://www.billboard.com/biz/articles/news/legal-and-management/6502430/sony-music-fails-to-stop-american-idol-revenue

http://www.hollywoodreporter.com/thr-esq/bombshell-american-idol-lawsuit-claims-681625

Entrepreneurs and Community Development Financial Institutions

What should an entrepreneurs do when traditional financial institutions reject   their applications?   The bank explains that an enterprise is required have three solid years of operation. In addition, the financial institutions, clearly states it does not support companies operated by minority or economically disadvantage entrepreneurs. Above all, the institution can’t imagine your company growing fast enough for their lending purposes.  What should an entrepreneur do?

I’d recommend seeking funding from financial sources outside of   the traditional financial institutions. Below I have found two websites that may help entrepreneurs in seeking funding.

1.    Opportunity Finance Network  

The Opportunity Finance Network   is a national network of community development financial institutions.  Primarily, the Opportunity Finance Network supplies funding to low-income, low-wealth, and disadvantaged communities across America. The company claims it has “ originated more than  $30 billion in financing in urban, rural, and native communities through 2011” As can be seen, the Opportunity Finance Network has supported countless ideas supporting the development of disadvantaged communities. Not to mention the Opportunity Finance Network believes in sticking by its investments.  As a company, the Opportunity Finance Network believes everyone should have fair access to opportunities.

To become eligible for Opportunity Finance Network’s financial support, an organization is required to have a mission striving to have a positive impact on low-income, low-wealth and other disadvantaged people and communities. Originally, Opportunity Finance Network provides funding to profit, non-profit, or community representation.

Opportunity Finance Network’s website also exhibits its mission, core value, partners, and staff members. Companies seeking financial backing can utilize this information to gauge if their organization matches Opportunity Finance Networks needs.  Site map: http://ofn.org/what-cdfi

2.    CDFI COALITION

The Community Development Financial Institution (CDFI) Coalition is a private sector, financial intermediary with a focus on community development.  This organization is made up of community development banks, community development loan funds, community development credit unions, micro-enterprise funds, community development corporation-based lenders, and investors. Ultimately the Community Developmental Financial Institution Coalition provides financial opportunities to help build disadvantaged communities. Also, the CDFI offers loan and investment opportunities for entrepreneurs with poor credit teaching them how to manage their financial resources in an effective yet efficient manner. 

In order to retain a funding from a CDFI, the organization seeking financing must meet the United States Department of the Treasury’s eligibility requirements. Each applicant must meet these guidelines:

• Be a legal entity at the time of certification application;
• Have a primary mission of promoting community development;
• Be a financing entity;
• Primarily serve one or more target markets;
• Provide development services in conjunction with its financing activities;
• Maintain accountability to its defined target market; and
• Be a non-government entity and not be under control of any government entity (Tribal governments excluded).

This information cannot be found on the CDFI Coalition’s website, nevertheless the website is very helpful. The CDFI Coalition’s website offers information on the companies mission as well as its services. At the same time the company shares their countless partners and investors who have partnered together to contribute to financing community development.   In addition the company also helps educate future and prospective borrowers on what the Café’s purpose is and how it is intended to help them.

Hopefully this was helpful. Don’t get discouraged when there is a will there is a way.

10 Tips From Thomas L. Harrison To Build A Million Dollar Business Plan

Thomas Harrison is director and Chairman Emeritus of the Diversified Agencies.  In 1998, Thomas Harrison “ served as Chief Executive Officer of Diversified Agency Service, Inc. Over the years Thomas Harrison has made an impact on DAS helping it make many strides. According to Business week,  “ this person is connected to 116 board members in 10 different organization across 15 different industries.”  (Business week, 2014). While working at Omnicom division DAS he has participated in watching numerous presentations.  Over the years he has found countless mistakes people make while presenting their business plans. The first mistake he notices is “people get confused between a business plan and a marketing plan” (Forbes, 2012). Thomas Harrison makes it clear that a business plan is a business lay out, explaining why a company is in business.  During his interview with Forbes he also provides 10 key points of a business plan. They are:

“1. Describe why your company is relevant. What is the need being addressed?

2. Explain the overall state of the market and any important trends.

3. Explain why customers will buy your product or service.

4. Describe, in detail, which your customers are.
5. Explain who your current competitors are and their advantages.

6. Explain which competitors you will displace.

7. Describe your product offerings, how they compete with other brands and why they are needed.

8. Provide an overview of the various resources, including the people that will be needed to deliver what the customer expects.

9. Describe corporate priorities and the processes to achieve them.

10. Included three thorough financial plans; one that’s conservative, one moderate and one optimistic, each with realistic and achievable sales revenues, margins, expenses and profits on a monthly, quarterly and annual basis.”  (Forbes, 2012).  

The key components are critical because they give everyone a clear understanding of what the business is. Each of these key components help assist the purpose of a business plan Throughout my business plan I intend to describe why my company is relevant to users. Today value is more important than it ever was in the past. At the same time, Time is scarce. Therefore I want people to know the benefits of my business plan.

References

http://www.forbes.com/sites/alanhall/2012/08/26/how-to-build-a-billion-dollar-business-plan-10-top-points-2/2/

http://www.prnewswire.com/news-releases/thomas-l-harrison-chairman-diversified-agency-services-division-of-omnicom-group-named-chairman-emeritus-200412561.html

http://investing.businessweek.com/research/stocks/people/person.asp?personId=505776&ticker=OMC