Although there are entertainment agents and venue consultants who are honest and trustworthy, unfortunately there are just as many or more unscrupulous agents who are systematically ripping off both clubs and entertainers. Many of them completely disregard their obligations to uphold the relevant laws governing this industry and think nothing of fleecing performers of their rightful earnings, such as double-dipping on commissions or skimming off a far greater commission that is allowed by law.
For example a club may pay $600 to their entertainment agent to forward to a duo as their fee, however the agent may only be forwarding $400 to them and keeping the rest. In nearly all instances, the club never checks and thus never finds out that it is being ripped off. Many entertainers are very well aware that they are being ripped off but are too scared to say anything because of the implied threat of no more bookings if they blow the whistle on the crooked agent.
Even more interesting is the fact that there is no legal ceiling as to the size of the consultancy fee between the club and its venue consultant for this service. A venue consultant can bill a venue for any amount that is agreed upon, but this amount has nothing to do with the gross fee paid to performers. In fact it is a legal requirement that venue consultancy fees must be billed separately to invoices for entertainment.
A venue consultant is specifically PROHIBITED from charging performers any commission whatsoever, as the venue consultant is engaged by the venue and represents the venue's interest. A venue consultant, like an entertainment agent, is specifically PROHIBITED from acting as an entertainment industry employer, thus under the Entertainment Industry Act, the employer is ALWAYS the end-user of the entertainment, such as a venue.
Most importantly, a venue's entertainment consultant is its appointed representative. Should an entertainer take legal action to recover money that has been ripped off by a venue consultant, the venue would most certainly find itself not only enmeshed in court action, but also quite possibly liable to pay substantial sums of money in compensation, as the venue is ALWAYS ultimately responsible for correct payment to its entertainers, according to the law.
If you are a venue manager or entertainment end-user, try this simple test. Ask your entertainers what fees they are being paid by your venue consultant. Then compare it to the fees your venue consultant invoiced your venue for them. The sum should always be the same and your venue consultant should be billing you separately for his services. If you find that your venue consultant is deducting commission or other fees from performers, then he is acting illegally and you could find yourself in some legal hot water as well.
A different situation exists for entertainment agents, whose job it is to arrange work for performers at venues or with any other end-user, such as for weddings, corporate events and private functions. They are entitled to receive 10% of the performer's gross fee as commission and they do not act as venue consultants as such, even though they may be dealing with venues. However, entertainment agents cannot act as venue consultants and charge fees to venues for such services at the same time. They are either entertainment agents or venue consultants, but never both.
If you are a venue manager, you have to realise that performers are employed by you, not by your entertainment agent or your venue consultant. So if you find that you are being ripped off in regard to your entertainment, there is an easy remedy, as follows:
The entertainment industry is very volatile at the best of times and most performers are constantly struggling to earn enough to sustain them in such a difficult profession. The last thing they need is for unscrupulous agents to rip them off. Venues are also in a vulnerable position, often putting their trust into the hands of crooked agents and then finding out too late that they have been taken advantage of, or even worse, become liable for the defaults or illegal activities of their appointed venue consultants. Every party involved in this industry should always be vigilant and expose the crooks and charlatans.