Monday, March 15, 2010

Entertainment and Sports Social Media 360 Deals

Entertainment 360 deals have slowly become more prevalent in the entertainment industry during the past several years. A 360 deal is one where a record label or entertainment company signs talent to a contract that entitles the company to derive revenue not only from traditional revenue streams such as record sales, but also from all other monetizeable areas. These other revenue streams may include: endorsements, merchandise sales, publishing, and songwriting. The revenue splits vary depending upon an artist's leverage in the industry.

Michael Jackson's estate recently signed an agreement that appears to be what I call an "Entertainment Estate 360 Deal." The full details of the contract have not been disclosed as of this writing, but, it sounds as though this agreement may break new ground in the manner in which entertainment contracts slice and dice intellectual property rights. According to the New York Times, the agreement "allows Sony and the estate [of Michael Jackson] to collaborate on a wide range of lucrative licensing arrangements, like the use of Jackson music for films, television and stage shows and lines of memorabilia that will be limited only by the imagination of the estate and the demand of a hungry worldwide market." This groundbreaking agreement appears to fully monetize Michael Jackson's estate in a manner that will benefit the estate's heirs. Unfortunately, Michael Jackson may have been worth more dead than alive.

Generally, in the world of U.S. professional sports 360 deals do not exist. NFL players have an incentive to quickly monetize their social media assets because on average their playing careers last approximately 3.4 years. In order to properly leverage an athlete's social media potential, a player needs to be both talented on the field and have a unique and engaging personality. Chad Ochocinco has this rare combination and this has enabled his twitter account to attract sponsors due to his ability to acquire almost 800,000 followers.

As an attorney who practices entertainment, sports, and social media law, I am always looking for creative methods to increase my client's revenue streams. In my February 5, 2010 post, I discussed "Social Media Engagement Product Placement Contracts." To elaborate further on this topic, I want to discuss what I call "Social Media 360 Deals." In a "Social Media 360 Deal," a celebrity or professional athlete's social media assets are utilized to create synergy for both the client and the sponsor(s). Due to the constantly changing technology of social media, an attorney must be well versed in not only contract law and intellectual property, but must also fully understand the technology and capabilities of the social media platforms involved.
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