At the 2017 Grammy Awards, when Chance The Rapper became the first artist to win a Grammy for a streaming-only album, he took to the stage with his then manager Patrick Corcoran, known to the rapper’s fans as Pat The Manager.
However, a jury in an Illinois court was told yesterday, if only the rapper had “known then what he knows now”, he would “not have shared that Grammy stage with Pat”. Because when this artist and manager parted company in 2020, the split was far from amicable.
A five year legal battle between Corcoran and Chance The Rapper, real name Chancellor Bennett, is finally in court. At the centre of the dispute is Corcoran’s claim that his management agreement with Bennett included a sunset clause, allowing him to continue to commission for three years after they stopped working together.
There’s a dispute over that clause because Corcoran and Bennett worked together on a hand-shake with no written contract, which is surprisingly common in artist management.
Sunset clauses are also pretty common in management agreements. Most managers work on a commission basis, earning a portion of the artist’s income while they are working together, in Corcoran’s case it was a 15% commission. Under a sunset clause, a manager can continue to commission on some income streams even once they are no longer working with an artist for a set number of years.
Such clauses are most important where a manager is working with a new artist, as was the case with Corcoran and Bennett. In the early phase of an artist’s career there might not be much income to commission on - and 15% of nothing is nothing.
There’s always a risk, for the manager, that they get sacked just as things take off and that commission becomes valuable. The sunset clause allows them to get a return on their early investment.
Although sunset clauses are common in artist management, does that mean that a clause of that kind was discussed when Corcoran and Bennett entered into an oral agreement in 2013? Bennett is adamant that a sunset clause arrangement was not part of what they agreed.
According to Law360, Bennett’s lawyer yesterday told the jury that Corcoran’s legal team will not be able to show them “any text message, email or other document” that suggests there was a sunset provision. And there’s no moral argument for Corcoran to commission on Bennett’s earnings post 2020 either, because the manager earned millions in commissions while still employed by the rapper.
The rapper’s attorney went even further. He said the fact Corcoran now wants more money demonstrates “a level of greed” that Bennett’s parents and other music industry experts cautioned him to steer clear of when he was first building his career as an independent artist in the early 2010s.
Needless to say, Corcoran’s lawyer reckons his client wanting those sunset clause commissions - about $3.8 million - is nothing to do with greed. Before Bennett found fame, the jury was told, Corcoran “poured his life” - not to mention his savings and money from his parents - into launching his client’s career.
“While it is undeniable that Chance was the talent”, the manager's attorney said, “it is equally undeniable that Pat was the engine behind the music”.
The bust up between Corcoran and Bennett is not just about the unpaid commissions. Bennett says that, while still working as his manager, Corcoran used the rapper’s success and contacts to help build other businesses, and divert monies to himself that should have gone to his client. Allegations Corcoran rejects.
However, it’s the sunset clause and unwritten management contract that are the most interesting elements of this case. Most music industry lawyers will tell you that artists and managers working on a handshake is more risky for the manager than it is for the artist. If Bennett wins this legal battle - and Corcoran walks away without his extra $3.8 million in commissions - that theory will have been proven.