The MBW Review is where we aim our microscope towards some of the music biz’s biggest recent goings-on. This time, we dig into a fresh US lawsuit which will be cited across the global music industry for years to come. The MBW Review is supported by Instrumental.
“Of course, I’m loath to bring up the Chance The Rapper story, but it does demonstrate how things can go terribly wrong when an independent artist and their manager refuse to sign with a record label…”
You can expect variations of this sentence to be uttered with predictable regularity by record company executives in the years ahead – especially in front of promising unsigned talent.
For years, the story of Grammy-winning Chance (aka Chancelor Bennett), has been held up as the pinnacle of what independent artists can achieve without any label involvement in the streaming age.
Now, suddenly, it’s become a cautionary tale.
Last Monday (November 30), Chance’s long-time manager, Pat ‘The Manager’ Corcoran, filed a lawsuit against the artist, claiming that he is owed more than $3 million in unpaid commissions.
The suit, filed in Illinois, revealed that Chance sacked Corcoran on April 27 this year, replacing him with Chance’s brother (Taylor Bennett) and father (Ken Bennett).
The artist’s dismissal of Corcoran followed the disappointing performance of Chance’s first studio album, The Big Day – released in July last year – and the scrapping of a subsequent tour following poor ticket sales.
Corcoran’s suit sets out the story of Chance’s meteoric rise under the representation of Pat The Manager LLC. It reads: “The iconic pair of Pat Corcoran and Chancelor Bennett, an artist-manager combo for over eight years, together reimagined and forever changed musical artists’ ability to control their careers.
“Electing to forego the operational and financial support of a major label and choosing instead to rely on their own hard work and self-sacrifice, Corcoran and Bennett upended traditional norms, broke barriers and redefined the music industry.”
It adds: “The combination of Bennett’s indisputable musical talent and Corcoran’s revolutionary management style led the duo to international and critical acclaim, including three Grammy awards in 2017.
“Through Corcoran’s calculated decision making, including the money saved by foregoing a traditional music label relationship, Corcoran was able to maximize profits from multiple sources, including, but not limited to, sales and streaming revenue from master recordings, marketing opportunities, endorsements and branding deals, the sale of merchandise, and touring and other public appearances, which helped Bennett accomplish significant financial gain and international fame.”
However, the suit soon turns ugly.
MBW has reviewed the full 20-pages of Corcoran’s filing (which you can read yourself through here). Here are the highlights:
1) Corcoran claims that he pumped $2.5m of his own money into the Chance project – and he wants it back
Transforming Chance The Rapper into a “global brand”, argues the lawsuit, was “ultimately achieved through [Pat] Corcoran’s carefully crafted strategies and overall management of Bennett’s career and image”.
These claims are traced all the way back to 2012, when Corcoran took over management of Chance at a point when the artist hadn’t yet headlined a live show.
Corcoran’s pivotal role in Chance’s decision to reject record deals is also covered. The suit claims that Sylvia Rhone of Epic Records was first on the scene to try and sign Chance, shortly after he headlined the Lincoln Hall in June 2012.
The suit suggests that both Chance and his dad, Ken Bennett, were “highly receptive to the overtures” of Rhone, but that “Corcoran advised Bennett and his father to refrain from signing with Rhone or any other major label and to continue to build Bennett’s brand and reputation independently”.
“[During] Corcoran’s tenure as Bennett’s manager, Corcoran incurred over $2.5 million of unreimbursed expenses supporting and promoting Bennett’s career.”
Pat The Manager LLC Lawsuit
Further meetings and offers from major labels were spurned, leading to Corcoran running “the entire [Chance The Rapper] operation out of a three-flat building that housed [Corcoran’s] office and apartment” from 2012 to 2020.
Corcoran also claims that he played a vital role in the recording of Chance’s Grammy-winning 2016 mixtape, Coloring Book.
“Coloring Book included collaborations with well-known artists such as Kanye West, Justin Bieber and Young Thug, among others,” says the suit. “Coloring Book became a particularly complex undertaking for Corcoran, as it required him to supervise the scheduling, recording, and mixing of the album and negotiate the clearing process with teams of multiple A-list artists who put up considerable resistance.”
Corcoran’s most important legal argument in terms of his input into Chance’s career, however, is this one: “[During] Corcoran’s tenure as Bennett’s manager, Corcoran incurred over $2.5 million of unreimbursed expenses supporting and promoting Bennett’s career.”
The lawsuit argues that this $2.5m figure has been retained by the three defendants in the suit – Chance The Rapper LLC (which handles the star’s royalties); Cool Pop Merch LLC (which handles his merch sales); and CTR Touring (which handles his touring income) – and that, between them, they should pay Corcoran this money back.
2) Corcoran says he hasn’t been paid the full net profit share he’s owed, as per a VERBAL agreement with Chance dating back to 2013… and that he deserves to be paid it for three years after his contract was terminated.
One of the central claims of Corcoran’s lawsuit is this one: “In or around June 2013, Corcoran and Bennett entered into an oral agreement pursuant to which Bennett promised to pay Corcoran fifteen percent (15%) of the net profits on all revenues generated by CTR, Cool Pop Merch and CTR Touring in exchange for Corcoran’s management service.”
The most potentially contentious part of this is the “oral agreement” bit, which we’ll come back to, after hacking through some more essential details.
The lawsuit claims that, in accordance with the alleged oral agreement, Chance The Rapper LLC paid Pat The Manager LLC 15% of its net profits throughout a six-and-a-half year period between June 2013 and December 2019.
However, Corcoran says that he is still owed for a number of unpaid commissions across Chance’s businesses that in total amount to more than $3 million.
Corcoran says these commissions relate to streaming and sales royalties from Chance’s first three mixtapes (10 Day, Acid Rap, and Coloring Book) plus The Big Day. In addition, Corcoran says he’s owed money related to:
- Commissions due and owing on all proceeds from Live Nation Touring (including non-recourse advances);
- Commissions due and owing on all 10 Day and Acid Rap vinyl sales and other merchandise;
- Commissions due and owing relative to singles released during the course of 2018;
- Commissions due and owing on all The Big Day vinyl sales and other merchandise; and
- Commissions due and owing relative to Netflix: Rhythm + Flow (Season 2)
Pat The Manager alleges that he presented an itemised list of unpaid commissions to Chance The Rapper’s businesses earlier this year. In response, he claims: “Ignoring PTM’s calculations, [Chance’s] father stated that Bennett was only willing to pay $350,000 in a lump sum, which amounts to (i) a deviation from the parties’ longstanding agreement on a commission rate of fifteen percent (15%) of net profits and (ii) a breach of their oral agreement.”
“[Pat The Manager LLC] contends that it has a contractual right to receive… commissions, consistent with the parties’ agreements, for a period of three years post-termination.”
Pat The Manager LLC Lawsuit
And then, there’s Corcoran’s biggest financial demand.
In the suit, Corcoran claims that should legally be paid a 15% net income commission from Chance’s recorded music, merch and touring for three years after the point the manager’s contract was terminated (on April 27, 2020).
“[Pat The Manager LLC] contends that it has a contractual right to receive (and CTR, Cool Pop Merch and CTR Touring have an obligation to pay) commissions, consistent with the parties’ agreements, for a period of three years post-termination, consistent with standards in the music industry,” says the suit, in reference to the so-called “sunset” clause that some managers have in place with their artists.
Pat The Manager’s case, of course, rests on the claim that the alleged oral agreement he had with Chance in 2013 was binding. Even if that holds up, he’s making a further claim that said oral agreement is then subject to contract clauses that are “consistent with standards in the music industry”.
Corcoran notes that when the alleged oral agreement was first struck in 2013: “[Chance The Rapper] originally offered [Pat The Manager] 10% of its gross revenue, but PTM, wanting to ensure Bennett’s financial success and avoid stunting his career trajectory, instead proposed and agreed to accept 15% of net profits after expenses.”
3) Corcoran says he always knew the Big Day was a stinker
The section of the lawsuit that is likely to end up printed, photocopied, and standard-issued to all A&R personnel working in major record companies is this bit: where Corcoran refuses to take responsibility for the quality (or lack of quality) of Chance The Rapper’s 2019 album, The Big Day, and the commercial fallout that ensued after its release.
The picture Corcoran paints is one of disarray, broken promises, external interference, and costly miscommunication.
Reads the suit: “Having enjoyed repeated success with the release of his first three mixtapes… Bennett announced on February 11, 2019 (without consulting with or giving advance notice to Corcoran) that he would release his first studio album in July of that year. Given the significant amount of work, care and attention needed to produce an album, Corcoran expressed serious concern with the projected release date Bennett had unilaterally announced for the album.
“[Chance] disregarded Corcoran’s advice before and during the project, resulting in the forced release of a subpar product.”
Pat The Manager LLC Lawsuit
“Corcoran knew that in view of the commitments Bennett had in early 2019—including his own wedding—it was likely there was not enough time for the creative process that was involved in releasing an album, and Corcoran advised Bennett in that regard.”
It continues: “Corcoran opposed announcing the release of any album before the recording or writing process even began, let alone was substantially completed. Compounding the issue, Bennett’s recording efforts were compromised by unproductive and undisciplined studio sessions. Procrastination and lackadaisical effort, perpetuated by various hangers-on uninterested in the hard work of writing and recording, resulted in a freestyle-driven product of sub-par quality, a complete deviation from the meticulous writing process that brought Bennett fame for his wordplay and wit.”
Corcoran claims that because Chance disregarded his advice prior to The Big Day, the artist ultimately “forced release of a subpar product” which ended up “delivering a blow to the reputations of Bennett and Corcoran”.
Continues the suit: “As with many album releases, Bennett and Corcoran initially anticipated touring in support of the new music. In that regard, Corcoran organized a 30-city global tour estimated to gross $25 to $35 million and began implementing advertising campaigns to build anticipation. Despite Corcoran’s efforts to arrange and market the tour, the underlying album failed to generate excitement comparable to prior releases. Based on low ticket sales and poor attendance projections, Corcoran recommended that Bennett take down The Big Day tour and use the time to regroup and refocus.
“Such a momentous recommendation was made only after Corcoran had assessed the situation, analyzed the available data and consulted with other touring and brand management professionals. Although Bennett first postponed the tour just days before it was set to kick off in September, several months later it was shelved altogether with Bennett promising his fans that he would ‘come back much stronger and better in 2020.’ The tour was never put back on track.”
“Against Corcoran’s strong recommendation that Bennett step away from the public and regroup, Ken and Taylor Bennett continued to press for, and ultimately confirmed, Bennett’s appearance on television programs such as Ellen, Good Morning America and The Late Show with Stephen Colbert, which only forced Bennett to publicly address his album’s shortcomings, rather than generate excitement about a newly-released album.”
Pat The Manager LLC Lawsuit
There’s also an allegation from Corcoran that Chance’s brother (Taylor Bennett) put a stop to expensive merch rollout at the eleventh hour, and that, eventually, “Ken and Taylor Bennett began pushing Bennett’s career in a different direction under a different philosophy, despite having little or no experience in the music industry”.
Adds the suit: “Instead of acknowledging the numerous distractions and artistic compromises that inevitably resulted from time wasted in the studio, all of which contributed to a lackluster album evidenced by historically low-ticket sales, Bennett ultimately blamed Corcoran for the judgment rendered by his fan base rather than accept that his own lack of dedication had doomed the project.”
Continues Corcoran: “Eventually, against Corcoran’s strong recommendation that Bennett step away from the public and regroup, Ken and Taylor Bennett continued to press for, and ultimately confirmed, Bennett’s appearance on television programs such as Ellen, Good Morning America and The Late Show with Stephen Colbert, which only forced Bennett to publicly address his album’s shortcomings, rather than generate excitement about a newly-released album, which is what such appearances are calculated to do. These appearances served only to further exacerbate the failure of The Big Day.”
If it swings in the favor of Corcoran, the suit could become an expensive one for Chance The Rapper.
Corcoran (via Pat The Manager LLC) is suing Chance’s three companies on no less than seven counts, including Breach Of Contract, Violation Of The Illinois Sales Representative Act, Unjust Enrichment and more.
Don’t forget, Corcoran is asking for: (i) The reimbursement of his alleged $2.5m personal expenditure on Chance’s career; plus (ii) the $3m he says he is owed for historical unpaid commissions; plus (iii) 15% of Chance’s net profit across records, merch and touring for the three years after his was fired on April 27, 2020.
But there’s more. Under Count II of Corcoran’s filing (Violation Of The Illinois Sales Representative Act), Corcoran is calling for “exemplary damages… in an amount not to exceed three (3) times the amount of the commissions owed to PTM as provided for by the Act”.
In other words, that $3m could presumably become $9m if Corcoran comes out on top.
A spokesperson for Chance The Rapper’s legal team has responded to Corcoran’s lawsuit. The statement reads: “Mr Corcoran has filed a suit for allegedly unpaid commissions. In fact, Mr Corcoran has been paid all of the commissions to which he is legally entitled”.
It adds: “Most of the complaint consists of self-serving and fabricated allegations that are wholly unrelated to Mr Corcoran’s claim for commissions and were plainly included in a calculated attempt to seek attention. Those allegations are wholly without merit, are grossly offensive and we will respond to them within the context of the litigation.”
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