We all know it’s not easy being a Canadian recording artist.
But it can be even more calamitous if there is no one helping you to navigate some of the business waters that can threaten to sink you before you swim.
Andrew Turner is founder and president of Toronto-based Turner Business Management, whose clients include – and have included – Kaytranada, celebrity chef Matty Matheson, Ralph Vibrolux, Viet Cong, Neon Dreams and recent signing, soca king Machel Montano. He has graciously provided five areas and advice to which Canadian musicians should pay attention.
1) Asset Protection
Every act that starts to accumulate earnings needs to protect themselves. Lawsuits, when touring, can be disastrous. It is key to incorporate a tour company to shield themselves from unforeseen calamities. That being said, it takes a competent business manager to take a realistic look at the stage of the artist and short-term projections before making that call. Incorporating as an artist can be a very useful tool, but if done too early, it can cost the artist much-needed development funds.
2) Withholding Taxes
When performing in the US, UK, Australia, etc., all of these markets are subject to withholding taxes of up to 30% of earnings. It is important to have business management with the expertise to minimize these withholding taxes and/or to recapture them whenever possible. We have many new clients with tens of thousands of dollars in outstanding withholding taxes that we chase down for them.
3) Proper Tax Planning
Sitting down with an accountant more than once a year to forecast the corporate and personal incomes for an act can avoid any major tax surprises at year-end. For our clients, we always recommend tax planning meetings, followed by check-in meetings midway through the year to revisit the numbers. We have inherited new clients at the end of a record cycle whose drawings from the band have been set too high, resulting in no funds remaining in their corporation. This can result in tax liabilities that never should have been incurred, and no money to pay them! With proper advance tax planning, there are some great strategies that assist in minimizing taxes.
4) Over-Saving at First
Living well beneath an act’s apparent means for the first year is an amazing strategy. This gives the act and management a chance to see how things are going to play out. If things are exceeding expectations, bonuses or salary increases are easy at that point. If things are off to a slower start, the act will still have funds to bridge the gap. Interestingly, it is the opposite that usually happens: overspending at the beginning leads to tax issues and cash flow problems before the act is even established.
As acts become more well-known and their guarantees grow, there are a couple key things to consider. The easiest one is that all tour gear should be insured. It is unfortunately all-too-common for a band to lose all their gear in a robbery and it can be devastating. Secondly, for longer tours, especially in foreign countries, liability insurance to protect against venue lawsuits, or a lawsuit from an employee who is injured on tour. Lastly, it is also prudent to buy contingency insurance to protect your guarantees against accidents where a tour may be cancelled. This is key when acts get to a certain size.
Turner knows what he’s talking about: in three short years, he’s expanded his business clientele from two to over 50.
“I think the difference when I started this is that I’m not an accountant and most of these shops are accounting firms run by accountants,” says Turner, former manager for The Nylons, Joydrop and Vibrolux.
“We have a whole team of accountants and bookkeepers in our office, so I think my perspective is different and I try to service clients in a 360-sort-of-way.”
Turner says his company focuses on numerous commercial aspects for recording artists and musicians who need both daily and long-term money management assistance.
“We have wealth management, accounting and sponsorship assistance, as well as real estate services if they need it,” he explains. “What keeps us busy is helping clients plan cash flow and then tax advice to help them maximize their earnings, so that they can put money away.
“When their career is over or stopped, they’ve got money and perhaps some real estate holdings and some other things going for them.”
That tax advice isn’t restricted to Canada alone: Turner says he has an extended global network of specialists that give him an international scope.
“For Australia, we have an accounting firm that we work with; for the UK, a point person in a firm there – just as we’re the point people for a UK firm. One of the great things about the digital world that we live in is that we have a spider web of an accounting network.
“It’s impossible with the constantly changing taxing landscape to be an expert in all of these areas, so we definitely draw on other firms around the world to help service our clients.”
Turner also advises on professional and personal insurance.
“It’s a key part,” he notes. “We work with some of the biggest insurance providers in the world in entertainment, so if the acts grow, we’re in a position to help them, to insure them on unforeseen outcomes.”
Much of Turner’s recent client growth has come from an interesting trend: Canadian artists who previously felt they had to leave Canada to retain business management firms are returning to the country in droves.
“We’ve been getting calls from international clients from Los Angeles coming to Toronto now,’ Turner observes. “There’s just a real coming of age in Canada. You can see it with artists like Drake: I ran into a young urban act that had just moved here from Indiana because Drake was here. So, it’s interesting that we’re becoming a landing spot for artist looking to get discovered.
“On all levels, with the financing and accounting services, we’re starting to see international acts from Canada coming back home to Toronto…or in this case, when we signed Machel Montano, you’ve got a Caribbean act who is the top soca act worldwide, coming to Toronto and leaving a very well-known business management firm in L.A., because he felt that he could get better looked after here with our expertise.”
And that expertise is best left to specialists like Turner’s firm.
“I can’t tell you how many people call their cousin who is a real estate lawyer to get advice on a record deal,” says Turner, who oversees a staff of six.
“When you get to a certain level in any entertainment business, you need to work with specialists. Because just one little insight can save you a lot of money or save you from a lot of problems with the CRA.”
For wealth management advice, Turner says there’s one current trend he advises clients to avoid.
“Bitcoin and blockchain currency issues keep coming up,” Turner admits.
“We’re not big proponents of the blockchain currencies: from our perspective, it’s very speculative and it’s not based on sound fundamentals yet. That’s not to say that people can’t make lots of money in that area, but people can make money in Vegas as well and we don’t really recommend that as a wealth strategy.
“We’re a pretty conservative bunch.”