Professor John Ouellette teaches in the Department of Recording Industry and is also a successful entertainment attorney who has represented record labels, publishing companies, managers, concert promoters, artists, songwriters and producers. Attorney-client privilege keeps him from dropping any client names.
John earned his Bachelor of Music from the University of Massachusetts, Lowell and his J.D. from the Nashville School of Law. He passed the Tennessee Bar in 2006. He has worked in the music industry in Nashville for over 25 years, including more than a decade in music publishing.
He talked to Beverly Keel about changes in entertainment law, negotiation tips and attending his children’s sporting events.
When and why did you decide to go into law?
I decided to go into law in 2002. I decided to do it because my employer offered to pay for me to go to law school. I was working in music publishing and mentioned to my boss that I was considering getting an MBA. He said I should go to law school. I had previous discussions with lawyers about the workload and time commitment of law school, so, thinking I would shut that idea down, I told him I would go to law school only if the company paid for it. The company agreed to pay for it, so I went, and I am very glad I did.
When did you decide to focus on entertainment law?
Where to begin? Between the technological advances related to music consumption and changes to copyright law, entertainment law has changed a lot over the years. In addition, it seems there is more copyright infringement litigation than ever. Some of which has resulted in decisions that potentially alter what is protected by copyright. The "Blurred Lines" case is a good example. When I listen to the two songs in that case, I don't hear similarities in the lyrics or melody. The style of the music is similar, but musical style is not protected by copyright. While the appellate court ruled there was infringement, one of the judges wrote a dissenting opinion that says the decision extends copyright protection to style. After that decision, more people filed copyright infringement claims on similar grounds, meaning the similarities are found in the style of the music, not in the lyrics or melody. Artist agreements have changed because of streaming. Some streaming revenue is not paid on a per-stream basis, and record labels need to make sure the royalty language in the artist agreement addresses how the artists will be paid in that situation. Copyright litigation may also be changing. There was a federal spending bill signed into law December 27, 2020. The news surrounding the signing of the bill focused on things like defense spending and COVID relief. There was some COVID relief for talent representatives and others in the entertainment industry. Also included in the bill is the CASE Act. The CASE Act calls for the creation of what will be a small claims court for copyright infringement litigation. The process will be less expensive than filing in federal court, and the amount of damages is capped at $30,000. If this approach is effective, then we could see a lot of infringement claims that otherwise would not be brought because filing an infringement claim in federal court is cost-prohibitive in cases where damages are likely to be low.
It seems that much of your job as an entertainment lawyer is negotiations. What kinds of things do you negotiate?
I negotiate a lot of recording agreements and songwriter agreements, as well as management agreements and producer agreements. Since the beginning of the pandemic, I have also been negotiating a lot of agreements for live-streaming concerts and exploiting audio-visual recordings on a subscription streaming platform. In addition to that I have handled several transactions selling royalty rights for artists.
When you are selling an artist’s royalty rights, how do you determine what it is worth?
The valuation for royalty rights is determined by looking at the pre-tax net income during the 3 - 5 years prior to the purchase and calculating the average annual pre-tax net income. That average is then multiplied by a number (called the "multiple"). For example, if the average net income is $1,000,000 and the multiple is 10, the purchase price will be $10,000,000. There is always some negotiation related to the actual price, so the multiple is not always a whole number. There have been some recent high-profile transactions with multiples estimated to be above 20, so now is a great time to sell.
Can you offer us any tips on how to become a better negotiator?
Understanding that each party must feel like they are getting what they need to get in the deal is important. Any agreement is going to require some compromise by both sides. If one side feels like they are the only one giving up ground, they may not do the deal. It must be a win-win.
Some of the artists with whom you work switched to live-streaming during the pandemic, when they weren’t able to perform on the road. What sorts of issues did you have to handle with live-streaming?
Many of the deals I work on in this area involve the performance being recorded. So, while the initial performance may be live-streamed, it is also recorded and made available for on-demand streaming. Any time you record an artist who is signed to an exclusive recording agreement, the record label must be involved in the deal. In those deals, the label grants permission for their artist to be recorded and the parties address the ownership of the recordings and the use of the recordings on the streaming platform. Once the artist and label are on board, the songs need to be cleared. The performance licensing for the songs is handled through a performance rights organization
, and there is usually a synch fee paid to the publishers of the songs.
What made you want to teach full time?
I got into teaching because I want to help young people do what I have been fortunate enough to do. I moved to Nashville a long, long, long time ago to finish my degree (by completing a 12-credit internship - yes, I paid a full-semester's tuition to move to Nashville and work for free) and work in the music business. I feel incredibly lucky to work in the music business, and I want to share what I know with as many people as possible.
What areas of research interest you?
I enjoy staying on top of developments in copyright and entertainment law and read a lot about those subjects from regular news feeds and legal opinions. I have committed a good deal of time researching teaching and learning. I read Make It Stick (Brown/Roediger III/McDaniel) and recently finished What the Best College Teachers Do (Bain). I also read articles and listen to podcasts on the topic. This area interests me because I can learn a lot from teaching and learning experts that will have a tremendously positive impact on my own teaching. Most recently, I have been researching the civil rights movement. Over the past several years a spotlight has been put on racial injustice in this country, and I have realized that I need to not only acknowledge my privilege, but also acquire a better understanding of the effects of racial injustice, so I can become an agent for change. So, I decided to read the works of people like Martin Luther King, Jr. and James Baldwin so I can develop the understanding that will help me in that regard.
What do you do when you aren’t working? What have you watched during the pandemic?
Prior to the pandemic, most of my non-working time was spent at my children's sporting events. Our oldest daughter competed in cross country, swimming and track all through middle school and high school (and now runs cross country and track at the University of Kentucky). Our son played ice-hockey from the time he was little until he graduated high school in 2020. Our youngest (daughter) runs cross country and track (she is a junior in high school). With less of that type of activity, I have been playing guitar more. As for watching television, if I have control of the remote, I watch sports. We did start watching TV shows as a family during the pandemic. We watched Brooklyn Nine-Nine and have recently been watching Schitt's Creek.