Arts administrators: How to negotiate contracts and win friends (2003)

Written specifically for arts managers, this article offers good advice for any contract negotiations.

Hope London
Creative Business & Entrepreneurship | 24 March 2011
This article was previously published in Arts Management Weekly (203), 04 March 2003, with the title “Signed and sealed with a smile”.

Much of the life of an arts administrator is spent negotiating contracts. Whether you are the manager of a theatre, orchestra or art gallery, or the head of arts and leisure at a local authority, your work will require you to enter into agreements. A signed, written contract provides essential evidence in the event of a dispute. It sets out the rights and responsibilities of the parties, and provides useful reference to details such as dates and amounts of payments. You are well advised to have one.

With all this in mind, it may seem contradictory to say that a written contract is not actually the most important aspect of an agreement. A formal contract just commits to writing a verbal agreement that has already been reached. If you have to go back afterwards and take a magnifying glass to the small print, something has gone wrong along the way.

The most critical phase of an agreement takes place during the negotiating process. The goal of negotiating a contract is to reach an understanding of what everyone wants— a true meeting of minds— to ensure as far as possible that things will go right.

The experience of arts managers strongly suggests that observing the following ground rules during negotiations can provide the foundation for positive working relationships throughout the course of a project, and the best chance for achieving rewarding results;

  • Preparation is vital. The first step is to be clear about what you want. Take time before negotiating to think about your objectives and what is in the best interests of your organisation. Make sure you know your rights too.
  • Make checklists of all the points you want to cover, and be sure you go through each one.
  • Create a pleasant, easy atmosphere.
  • Get to know each other, establish rapport and a basis for mutual trust.
  • Find and define shared goals and intentions.
  • Make sure there is full understanding of what each party wants to get out of the agreement.
  • Consider the needs of the other party and try to achieve a result that is best for all parties (a “win/win” situation).
  • Give everyone the opportunity to air all their concerns and have them addressed. Remember that everyone (including yourself) has the right to ask questions.
  • Make sure the rights and responsibilities of each party are clearly set out.
  • Complex points can be identified and left for another meeting (for example, residuals for the film version of a play.)
  • Let creative, lateral thinking come into play.
  • Allow for a little old-fashioned “horse-trading”.

Ian Kellgren (chief executive and artistic director of the Liverpool Playhouse) has provided a helpful condensed version of these guidelines:

  • Establish rapport
  • Methodically go through everything you want to talk about

For him each contract has a “central shape or core concept from which everything flows”. If the parties can agree on their main purpose and how the deal will look as a whole, it will be far easier to sort out the details. If there is a later disagreement, it will be easier to find the appropriate solution.

The most complex project he has faced to date was the Broadway hit Fences by August Wilson. It illustrates the importance of understanding the needs of the other party in order to get what you want.

In this case, the author had far greater rights of approval than would be normally expected for a writer. He specified a black director and only two actors in the world who could play the main part. The original producers also required a West End transfer and a share of the net profits. Because the play had been so successful, the author and producers had a great deal of bargaining power. These conditions were all extremely important to them. Kellgren really wanted to bring the production to Liverpool, so he agreed. He managed to secure the services of Yaphet Koto (one of the two named actors) for the lead, and the production made it to the West End.

“One of the basic ground rules is for each party to have an understanding of the other party’s position,” emphasised Bill Kerr (North West district organiser for the Musicians Union). “For example, a written agreement— even if it has been thoroughly negotiated and duly executed - may not work well in practice if there has been a failure to consider the real needs of all the parties.” Kerr sometimes sees problems like these in the course of annual salary and contract revisions with orchestras. From his point of view, if management does not take seriously the needs of musicians (which may be reflected in low pay, or by demanding long hours which disregard the needs of working parents in particular), the result may be that orchestra members develop a cynical attitude and reduced loyalty to the organisation. Conversely, he has noticed that when chief executives are more conscious of the situation of orchestral members and do all they can to improve conditions (within existing financial constraints), members often respond with an increased sense of responsibility for the welfare of the orchestra as a whole.

Although contracts can’t provide for every conceivable eventuality, they should be clear about those points they do address. There is currently a standard agreement for employing musicians in theatres. One clause states that if a rehearsal runs overtime, the musicians will be paid time and a half. It also provides that they will be paid double time if they play on a bank holiday. But what happens when a rehearsal runs overtime on a bank holiday? Should the musicians be paid two-and-a-halftimes? Treble time? At the moment, each instance has to be separately negotiated— a frustrating situation, because it could have been clarified easily enough during negotiation.

Money is not always the primary issue. While Louise Honeyman, director of the London Mozart Players, is a strong negotiator when it comes to staying within budget, she is sensitive to the needs of members, and of guest artists: “Orchestra members require recognition for their work,” she says, “because although each is an artist they don’t receive the same accolades as soloists. Conductors, on the other hand, have their own ideas about programming and repertoire which often conflict with those of the outside bodies funding the performance. The negotiator in this situation must become a mediator, creating an atmosphere of compromise in which everyone feels they have won ... or else the date won’t happen!”

Agreements tend to work best when people have had a chance to express their views and feel they have been heard. The members of the London Mozart Players have regular meetings with management each month. At one such meeting a letter of appointment was put before the members for questions and comments. They talked it through step by step, discussed it, and made the necessary adjustments so that the group was satisfied with the result.

Each new member now receives this letter of appointment, clearly setting out the terms of their engagement, procedures for termination, and the standards they are expected to uphold. The members felt that this formal contractual arrangement was a positive step, providing a sense of security and much-needed guidelines.

Whether an arts manager is negotiating with orchestral members, guest artists, staff, outside producers or anyone else, such full and open dialogue is essential. Creating a successful contractual relationship— one that is clear, covers all the major concerns, and leaves everyone feeling positive and committed to the project— depends upon creating a relationship and sense of ease between the people involved. “The only good manager is a good communicator,” Honeyman observed, hitting upon the most fundamental guideline for negotiating contracts. “It’s really all about communication.”