Analysis: Jackson case will change the tune for concert, artist insurance
A strike by stagehands forced the cancellation, but the union temporarily suspended its strike on Thursday, allowing the concert hall to open its doors for now. A union leader told Reuters he was optimistic the two sides could reach a permanent deal by Friday. The dispute hangs on whether the stagehands – mostly prop-makers, carpenters and electricians – should have a role in a new educational wing that the Carnegie Hall Corp plans to open above the hall next year. The corporation wants to hire cheaper labor at the education wing. Negotiations with the union took an unprecedented turn on Wednesday when Local 1 of the International Alliance of Theatrical Stage Employees decided to go on strike for the first time in the history of Carnegie Hall. However, when James Claffey, president of Local 1, emerged from negotiations on Thursday afternoon, he announced the union had agreed to pull down the picket line for the day, citing progress in the talks. “This is a goodwill gesture towards Carnegie Hall,” said Claffey, whose local has negotiated some of the most lucrative pay in the industry. He later said further progress had been made, and that even though picketing would continue, he hoped to reach a deal by Friday. Carnegie Hall’s five full-time stagehands make an average of $400,000 per year including benefits, The New York Times reported, citing the organization’s tax returns. Claffey said there were many more stagehands represented by the union who work only sporadically. “This dispute is not about those employees,” Claffey said.
In the future, the star or his promoter may be required to carry separate insurance on his entourage. “The biggest stars all have doctors and their own staff,” said Lorrie McNaught, senior vice president at Aon/Albert G. Ruben Insurance Services Inc, a large entertainment insurance firm, which has handled many of the world’s biggest tours over the last 12 months. “If you have a security guard who winds up punching someone in the face or kills someone, who is responsible? “Is it the artist, the bodyguard, the promoter? I think promoters will require stars to indemnify their own staff,” said McNaught. “Even if AEG was not held responsible, I still think this case will make attorneys find ways to tighten contracts.” An attorney for Lloyds of London involved in the Michael Jackson case declined comment for this story. The price of premiums also may go up, according to one concert producer who did not want his name used. Currently, promoters pay 3 percent to 5 percent of the value of the policy, meaning that AEG paid between $530,000 and $875,000 for the $17.5 million policy it took out with Lloyds of London for Jackson’s “This is It” tour. AEG, which had initially sought to collect on the $17.5 million policy after Jackson’s death canceled the tour, dropped a claim against Lloyds amid revelations in leaked emails that show AEG executives were concerned about his stability ahead of his planned London comeback tour. Insurers routinely send doctors to do medical exams — and occasionally hire investigators for background checks– before placing multi-million dollar policies for the stars. After the Jackson trial, the reams of information they need will skyrocket, said Adam Steck, CEO of SPI Entertainment, who recently brokered a deal for an 18-show run by rocker Meatloaf at Planet Hollywood in Vegas, starting September 26.