Wiz Khalifa’s $1 Million Lawsuit is a Warning for All Artists
Bad things happen, and in the music industry, bad things happen more often than not. The combination of big money and a financial system so fractured, convoluted and complicated that even lawyers don't really understand the contracts makes music prime territory for disagreements, shadiness and, of course, lawsuits.
Today, Wiz Khalifa filed a $1 million lawsuit against his former longtime manager, Benjy Grinberg, alleging, in short, that Grinberg and his label, Rostrum Records, "Intentionally conceal[ed] material in order to profit at his expense."
Now, I have absolutely no idea who's in the right here. Let me emphasize that again - in no way, shape or form am I implying guilt or innocence on the part of Wiz, Grinberg, or anyone else. Grinberg has stated that, "This is an egregious lawsuit filled with inaccuracies," and in the absence of information I have to weigh that statement equally with the allegations.
But....completely putting aside any questions of specific guilt or innocence, there are some broader lessons all artists can take away from this lawsuit.
Beware Your Manager's Relationship to the Label
This is the same lesson we went over when Funk Volume fell apart. Generally speaking, it's a bad idea for an artist's manager to also work for their label; or in the case of Wiz and Grinberg, for an artist's manager to also be the founder and president of their label. The obvious benefit there is in relationships and a streamlined workflow. If something needs to happen, one person signs off and it's done without getting potentially mired in bureaucracy and label politics. Your album isn't getting shelved when your manager is also the president of the label.
But on the flip side, your manager should be your protector, the person who can drop the hammer when it seems like the label's trying to screw you (cough, Dame Dash, cough), and it's extremely difficult for a manager to call bullshit on a label for shady business practices when that manager is the label, or works for the label. This is exactly what the lawsuit alleges, that there was a, "violation of the rule against self dealing," which is the legal term for when someone claims to be representing the best interests of their client in a deal but is in fact enriching themselves.
For the record, the same holds true for your lawyer, your accountant, your booking agent, etc. It's a tough position for an artist to be in, especially a young artist without many relationships of their own. You don't know any lawyers, or can't get that great lawyer you've heard about to take you on without a recommendation from someone they know, so you sign with the lawyer your manager recommends. (Do you really trust that lawyer to negotiate the best deal possible for you when it comes to the cut your manager takes?) You don't know any accountants, so you take the one your manager recommends. (Do you really trust that accountant to alert you if it looks like your manager's skimming some extra money off the top?) Atlantic Records has been ignoring you for years, but now that your manager is also best friends with the president of the label, you've got a meeting with them tomorrow. (Do you really trust that your manager's going to fight that label when they want to sign you to a long-term, damaging 360 deal?)
Those kind of close relationships may be necessary, they may be what gets your career off the ground in the first place. But the more closely tied the various people on your team are, especially if they have a direct financial relationship with each other, the greater the odds of you eventually getting cheated out of some money.
That's a lesson Wiz is apparently now realizing a good decade-plus into his career, and even if Grinberg was completely on the up-and-up the entire time they worked together and this lawsuit is bogus, I'm willing to bet Mr. Khalifa will never have his management and his label that close again.