Chance The Rapper’s long-running legal battle with his former manager Patrick Corcoran - aka Pat The Manager - reached its conclusion on Friday with both sides able to claim a partial win.
A jury ruled that the rapper, real name Chancelor Bennett, does not owe his ex-manager $3.8 million in unpaid commissions. However, when it comes to Bennett’s own legal claims against Corcoran, the jury did award damages, but somewhat less than the million dollars he was seeking: he’s set to receive $35.
Confirming that he considered Friday’s judgement a win, Bennett told reporters “I claim victory in the name of the Lord”. What God actually thinks about the $35 mini-damages isn’t clear, but Corcoran’s legal reps said in a statement that “the jury award of $35 speaks to how seriously the jury viewed Chance’s case”.
At the centre of this legal dispute was whether the management deal between Bennett and Corcoran included a ‘sunset clause’, a common term in management contracts that allows a manager to continue receiving a commission on some revenue streams even after they stop actively working with an artist.
Corcoran was adamant their agreement did include a sunset clause - allowing him to continue commissioning for three years after Bennett sacked him in 2020. However, the artist and manager never had a written agreement, instead working on a handshake - or, actually, a handshake and a hug.
But neither a handshake nor a hug are as good as a written contract. Which means the lesson of this legal dispute for managers everywhere is pretty obvious: as Corcoran’s lawyer Jay Scharkey said on Friday, "the message to music managers is clear - get it in writing”.
During a two week trial, Corcoran explained in considerable detail his role in helping Chance The Rapper take the world by storm as an independent artist capitalising on the potential of platforms like SoundCloud.
Much of the story Corcoran told was not really relevant to the core dispute, but confirmed it can be very hard work indeed managing a new artist in the early phase of their career, when there isn’t really much revenue to commission on. Corcoran ran through the work he did on Bennett’s behalf and the risks he took in those early days, including relying on his own parents to cover some of the costs.
But what really mattered in this legal dispute was what was said during the very occasional conversations Corcoran and Bennett had in the early years about how their business partnership would be structured.
During his testimony, Corcoran talked about a meeting in 2012 that was attended by Bennett, Corcoran, their respective parents and a corporate lawyer called Rob Zimelis, whose son worked for talent agency WME. The purpose of the meeting was to discuss how deals usually work in the music industry.
US artist managers usually work on a commission basis, Corcoran explained in court, taking 10-15% of an artist’s revenue. But “there is also a thing called a sunset, which is where, when you and an artist create something that will spit off revenue forever - like an album or a merchandise item - that, essentially, a sunset is created to limit the manager's participation in those profits or that revenue”.
That description presents the sunset clause as something that actually benefits the artist, because without the sunset clause a manager might seek to share in income forever. Though sunset clauses are generally seen as protection for the manager, who might work hard for an artist during the early phase of their career where 15% of profit isn’t worth much, but then get sacked with the big money starts to flow in.
No formal management deal was agreed at that 2012 meeting, but both artist and manager in theory left the conversation better informed about music industry conventions.
It was the following year that a formal oral management agreement was reached, according to Corcoran. He explained that during a discussion about the finances of a tour where Bennett had supported Eminem, he suggested to his client that it was time to finally agree a management deal.
Two things were agreed during that conversation, Corcoran told the court. First, that Corcoran would receive 15% of Bennett’s net profits. And then, he added, “I asked for a sunset”. Bennett responded with a simple “three years”. In response, “I think I just put my hand up and grabbed him, and then we hugged”.
Or at least that’s how Corcoran remembers things. Needless to say, Bennett remembers things differently. When the rapper took to the witness stand, he insisted that no sunset clause was discussed during that 2013 meeting, nor during any subsequent conversation between artist and manager.
In 2013, he said, the 15% of net profits was agreed and “that was the end of the conversation”, Even that oral agreement, he added, “didn’t sound like a contract, but my word is bond, so if I tell you I'm [going to] pay you, I'm [going to] pay you”.
After Corcoran sued Bennett in November 2020 seeking to enforce his sunset clause, Bennett filed his own countersuit accusing his ex-manager of misconduct.
That included allegations Corcoran demanded kickbacks from suppliers working on the rapper’s merch, and efforts to cut himself into movie and advertising deals. Corcoran denied any wrongdoing, but it was based on those claims that Bennett wanted a million dollars in damages.
Although in theory the jury found in Bennett’s favour in this case - and the rapper won’t have to hand over the $3.8 million he was looking to secure - the tiny $35 in damages is notable. Though the jury did also recommend that Corcoran hand over the ChanceRaps.com domain he still controls to Bennett, which will presumably be at least a little bit useful for the rapper.
On balance, it was more of a win for Bennett than it was for Corcoran. Which takes us back to the moral of the story identified by Corcoran’s attorney - if you’re managing an artist and you agree a sunset clause with your client, remember to write it down - because a hug, I’m afraid, just ain't good enough.