David Stromberg: Guiding Travis Scott Through the Business of Music

00:00 - 00:11

Hey, everybody, welcome to The Big Stage podcast, where we talk to athletes, artists, and entertainers of all kinds. I'm your host, Adam Sansiveri, Bernstein Managing Director and the Co-head of Sports and Entertainment.

00:17 - 00:50

We've got a great episode for you today focused on the music business and how one of its biggest stars is navigating the current crisis. It is mind blowing how much the world has changed in 2020 and the entertainment industry is towards the top of that list of industries that has been affected. My two guests today are in the heart of that change, navigating and innovating as we speak. I'm pleased to welcome David Stromberg and Dan Weisman. David as an entrepreneur and top manager in the music business. You may know him as Travis Scott's manager or for some of the groundbreaking work he has done with his client.

00:51 - 01:16

He has never done an interview before, so we're very thankful to have him with us today. Also, Dan Weisman is a serial entrepreneur, former music manager, former executive at Rock Nation. He is Grammy nominated and now a wealth adviser at Bernstein, who is a leader in our entertainment and sports group. Gents, thanks so much for joining me. Thanks for having me. Thanks, Adam. It's good to see you both. So, Dan, kick us off with a little bit of a background here.

01:16 - 01:49

How do you and David know each other? Back in around 2008-2009, I was managing a hip-hop artist named Wale and I was managing another artist named Mike Posner. And I received the fateful e-mail one day from a young man named David Stromberg, who was a avid reader of my music blog at the time, and told me that he would make a perfect intern or assistant or general whatever I needed in my life at that time should the need ever arise.

01:49 - 02:05

And he pestered me for a few months, and I finally agreed to meet with him one day. And we met up at at Century City. And I said, yeah, you can be, you can be my assistant. And how'd that work out? Well, he's managing Travis Scott now.

02:05 - 02:30

So I think the I think the protege exceeded the mentor that old Chinese phrase goes. So I love it. David, is that how you remember it? Yeah. I think the real takeaway is that Dan actually became my personal manager and he's my manager and he told me I have to... I showed up here, you know, I don't ask questions and it's worked out pretty good for both of us. I love it.

02:31 - 03:02

So it sounds like you knew what you wanted to do at a pretty young age, David. So was there a time when you said to yourself, this is for me, this is what I want to do for a career? It was that first meeting with Dan. I was on the fence. You know, I didn't really know too much about the music business. It was kind of this scary, mysterious thing. I always loved rap music, but meeting Dan that first time it was... he was just the coolest guy. I'll tell the story again. We were at Century City at the CIA offices downstairs, and it was all these guys in suits.

03:02 - 03:35

And Dan just strolled in with his coffee and his... he had these bright neon green Oregon basketball shorts just in the middle of the day. And I was just like, man, I'm trying to, like, live this life. You know, it was... it was an eye opening moment. I've not seen those shorts in the office yet, but I've... I've seen some pretty colorful outfits, so I'm not surprised he continues to inspire us all. So, David, you've been working with Travis Scott for quite some time now.

03:35 - 03:44

What is it, eight years? Yeah, something like that. Eight years, and man, his superstar status has shined bright that entire time and shows no sign of slowing.

03:44 - 04:15

So I guess I'm curious how do you maintain the stamina in a career like that? Yeah, it's a good question. I think kind of having a long-term vision is... is super important and not really chasing one moment, one hit song, or one deal or something. I think a lot of people are shortsighted when it comes to things like that, and they just look for a quick cash grab. But with us, we kind of always had a longer term vision and really studied like some of the great artists that had longevity.

04:15 - 04:49

There's only a few really in hip hop that are still around, but just in all genres really just to study the way they paced their careers and their creativity and just always kind of like having high aspirations and being willing to open on tours for bigger artists that at the time we basically it was either break-even or not and didn't make financial sense to do it. But just being willing to do things like that, to kind of set forth goals of the long-term career and, you know, shoot, shoot for the stars.

04:49 - 05:01

We always spent money on production and, you know, on tour, spent money on production and just kind of had like a vision of being a long-term superstar artist and stuck with it.

05:01 - 05:34

That's great. Well, to stay relevant for that long, you know, any artist has to innovate. And that's certainly been something that you and Travis have done. And not only as an artist, but really pushing the boundaries of business. Can you give us some insight into how you guide artists' career on the business side and particularly, I think, a lot of our listeners are thinking about the Travis Scott Fortnite collab. For those of you who don't know about the Fortnite collab with Travis Scott, first of all, you must be living under a rock or just not be in video games.

05:34 - 06:01

But it was quite the innovative experience. David arranged for Travis to make a grand appearance, and I mean grand because Travis, his character, was about 100ft tall in the game. So it broke all records for usage on the Fortnite platform. And there was an actual live concert within the game for the users that were playing at that time. So if you want, you can Google it or go check it out to see the recordings of it.

06:01 - 06:36

So tell us a little bit of how that came to be as well. You have to be in tune to the business world, and entertainment is just one side of that. But to really understand the trends and the tides of where business is going and what's happening all around the world, I think if you can relate whatever small section of the entertainment business to that, there's so many opportunities that people don't take advantage of and kind of do the same things over and over again or just put out a product and don't really look to cross over into other areas of business.

06:36 - 06:46

And it's something that we always look at and try to learn more about every day. And specifically with Fortnite, I mean, is something that was pretty organic. Travis is a gamer.

06:46 - 07:19

And I got on Fortnite pretty early, and we kind of just saw the whole platform explode from like the first or second year that it was out, to I think there are 300-400 million people, by the time he first dreamed Fortnite with Drake, and we just saw kind of like the reaction just to that. It was a couple of years ago and it was like a light went off of like, this is a platform similar to Instagram or YouTube or anything else that people aren't really tapping into as far as music.

07:19 - 07:47

So we reached out to Epic Games and started brainstorming ideas of how we could collaborate on a Fortnite experience with Travis's brand and music. And it was... it took a year, definitely a lot of back and forth on the creative development side. And obviously, once everything shut down, we ramped it up. And I don't want to say it was an opportunity because it's obviously a terrible time and really crazy, sad things happening all over the world.

07:47 - 08:16

But it was a moment to sort of bring people together and use the Fortnite platform and the Travis brand to create something that was really exciting and brought people together while they were all kind of stuck at home and there was no concerts or won't be probably for the next year or whatever. So the fact that we were able to work with Fortnite on creating an experience like that, it was... it was really cool.

08:17 - 08:50

And boy, did it come together. I mean, it seems like it was just this magical combination of so many things at the right time. And the results were game changing, if you will. I mean, you set records. And it's fascinating, I think, for our listeners to hear that it took a year for that to all come together. And there are other areas of this like the merchandising and the other sort of ancillary revenue streams that I just think we could talk about for a long time. But it's such a great example of the innovation that you and your artists and Travis particularly have done. Dan, I want to turn to you.

08:50 - 08:56

You're a music veteran yourself. Who were... you mentioned some of the management clients that you managed.

08:56 - 09:25

Was there anyone else that you were working with throughout your long career in music? I got my start managing at hip-hop artists from DC and then Wale. I started managing that, the singer songwriter, producer and Mike Posner, while he was still a student at Duke University. Those two artists David worked with me on as well. I actually sent David out on work tour with Mike Posner for a few weeks, which was David cut his teeth riding on the road on a tour bus with Mike for that summer. And I don't think you'd ever want to do something again.

09:26 - 09:55

It feels pretty good right about now, actually. I managed to sort of indie pop band called Capital Cities that had a massive hit called Safe and Sound and then was Roc Nation. I worked on the team for a bit. I managed a hip-hop artist from LA named Casey Veggies. So I've kind of worked the gamut of genres and whatnot, just never worked in country music in a legitimate way, but kind of been all over the place.

09:55 - 10:24

Well, that is such a robust experience and it sounds like you had a ton of success. So why did you pivot out of the music management business into advising folks on their wealth? I felt that the day and age that we had entered into with people sort of wanting clout more so than success was something that I was not interested in participating in when I started in the business.

10:25 - 10:54

The thing that constantly was told to me was that somebody bigger and with more experience was going to come along and take my client. And it wasn't that somebody younger with more Instagram followers was going to come and take your client. And so there was this constant notion that I needed to get more knowledge, wisdom and expertise. And I did the best I could to build up as much knowledge, wisdom and expertise as I could in the business.

10:54 - 11:12

And I think that I'm one of the best managers of the last, let's say, post Napster era, pre-, let's say post Napster, pre-TikTok era. I think from a track record I have a pretty phenomenal track record. I never managed a superstar like Travis and never managed somebody that was selling out arenas.

11:12 - 11:43

But I broke a number of different artists across different genres. But I just felt that the demand for knowledge, wisdom and expertise was kind of hitting an all-time low. And that's just not something I really wanted to participate in. And so pivoting and offering my knowledge, wisdom and expertise into something like stewarding people's wealth and success and finances. Moving forward, I can use the same skill set that I had built up being an artist manager. But to put it better... to better use on the—on the wealth management side.

11:43 - 12:07

Well, you're darn good at it. I've seen that firsthand. So I'm very thankful you've made the transition and you're unique because you link the two worlds in a way that I've never seen in my over a decade in this business. Thank you. I'm a great mentor. I like that. David, was there any one piece of advice or thing you learned from Dan when you were working with him that you now incorporate today?

12:09 - 12:39

I don't know how much I can say. Yeah, a lot, I think, what would be the number one thing. We could do a couple. I mean, there's a few that come to mind that we repeated over the years that are... that are hilarious but... Using cars as screens is a good one. Like if someone in L.A. traffic is using a car is like a pick and roll... L.A. listeners will appreciate that one.

12:41 - 13:08

Yeah, I think just Dan always had was always super early in finding things and sort of having a really clear vision of what they could turn into, probably even more so than what those artists might have thought themselves. And I was always inspired by his ability to find things really early on and believe in them when it was really... I mean, nowadays it's a completely different business, which sounds crazy because it wasn't that long ago.

13:08 - 13:36

But even like Dan just said, with the TikTok era or these labels all have like research people, that just all they do is just look at SoundCloud and streaming numbers, YouTube and anything that is like remotely popping, they'll just automatically reach out to and a new artist could have one song that's like sort of bubbling and everyone in the music business will be at their... calling them or trying to go to their first show or whatever.

13:36 - 14:11

So it's kind of different in that sense. Like Dan was reaching out to people super early and just it was a different time. So I think now I'll always be inspired by his ability to find things early and believe in them and not just go based off of analytics, but off of his taste and his instincts. The thing that I say now, the era that we're in, is that basically all things are created equal—a TikTok video that has 100,000 views of somebody doing a crappy dance is worth just as much as a TikTok video of the next Adele singing a cover song.

14:11 - 14:46

Right? And so as long as something generates views, then it's deemed good. And I just think, when the level of connoisseurship is so low that we're at that point, it's hard for people to identify something being good versus something being just view-worthy. I think that's a hard thing to navigate when you hold yourself accountable for having a higher level of taste, which as I know David does, and I can include myself in that. So it's a great point that I think will cause some of our listeners to think more deeply about content right now.

14:46 - 15:11

But if we have time, I want to come back to TikTok just to get both of your thoughts, since it's all over the headlines today. But before we do, moving forward, you both work tirelessly to help your clients succeed. Is there a common mistake you see artists making? David, let's start with you. Yeah, so many. I wish I could have stopped some of my peers from doing things

15:11 - 15:43

over the years, managers or artists with the knowledge that I know now or seen firsthand, just even a couple of years later, because in hindsight it seems like so ill-advised and misinformed and specifically just signing deals that... where there's no ownership or they're taking an advance that they'll either never recoup or just signing really bad deals for... through record companies, merge companies, publishers, they don't need those systems anymore.

15:43 - 16:07

Maybe 10 years ago before streaming or those times, you might have. But everything's so wide open now, there's no need for record labels as gatekeepers or distributors. You can upload your music so many different ways and get it placed on Apple and Spotify the exact same way that Taylor Swift or Billy or Travis Scott does.

16:07 - 16:23

The only things that record labels offer at this point is just up front advances and you're recouping them at the worst rates... any one of us could go to the bank and get a better loan, much better loan. They're recouping it at terrible rates.

16:24 - 16:51

But to an artist that doesn't understand this stuff and just feels like signing to a label is like the finish line, and they've made it, and maybe they have one or two songs or fan base that follows them and they feel like they have to sign. It's just, I would warn against it because there's so many ways to distribute yourself, market yourself, build a fanbase organically and just have ownership, real ownership in your businesses.

16:52 - 17:22

You'd be surprised at how many massive superstars still have no ownership in their content or the stuff that they've created over the years has generated 50, 100 millions of dollars that they don't participate in or participated in really low rates because they signed deals way too early or the people around them were just sort of motivated by getting a quick commission. A lot of managers will sign up artists just to get a commission and not really care about the long-term viability of a deal.

17:22 - 17:37

So I think those are some of the things I would warn against. That's pretty big. Dan, anything you'd want to add? Yeah, I mean, I would echo similar, similar sentiments. And I think it actually applies to our businesses as well.

17:37 - 18:06

There's this famous sort of classic phrase in hip-hop. I actually don't know who coined it, but big bank, take little bank. And it's, I mean, that's really what these labels are at the end of the day, is that they're just banks and they take advantage of the notion that there is a secret sauce, that there's some sort of secret magic wand that they wave, and the second you sign a record deal, you can kick your feet up and the machine takes over. And welcome to Success and the yellow brick road and everything else.

18:06 - 18:08

And you don't have to worry about it.

18:08 - 18:41

And, you know, a lot of artists don't. And even managers, I mean, and even lawyers, I mean, I hate to get into it like this, but, like, you'd be surprised how many managers, how many lawyers don't understand how royalties work, don't understand how copyrights work. And these people are somehow in a position to be advising artists and negotiating these deals. But, you know, when you really think about it, their best interest is deal flow. And having good bedside manner with the business affairs person at the label so that the next time it comes around that when they ask for a little something, they'll get it.

18:42 - 19:07

It's very similar to the financial services industry where a bank has a wealth management arm, but they also sell insurance. And what are you really paying for and who's getting paid off this deal? And nobody's looking out for the long-term best interest of the client or the artist unless you happen to find a great manager like David or myself who's going to put a fiduciary duty on their job. The way David does with Travis, the way I did for my artists, the way we do at Bernstein.

19:07 - 19:28

It's hard for sort of, somebody that maybe is not sophisticated or is just trying to figure things out to see the difference between the flashy person with the big Instagram following and the blue checkmark and the name brand banking institution that they know of. I mean, I hate to just draw such a blatant parallel between the two, but it very much rhymes.

19:29 - 19:53

That's interesting. So take that one step further, though, into the financial advice then, right. So since I just asked you about some of the mistakes that you're seeing artists make and the advice that you both are giving them, what's some of the financial advice that you've perhaps given to artists or that you've received yourselves over your career that you think is most important today? I can sort of keep going with that one and then I'll let David go.

19:53 - 20:19

But I would always ask what you're paying for. I have for whatever reason, whether it's Twitter or just people, you know, Google, the long tail of a Google search. People have me up still for advice in the music business and somehow if they're lucky enough to get me on the phone or an e-mail, there saying, yeah, you know, we're just we're looking for a budget to pay for marketing and I'm like, OK, well, what does that mean? And   they are like, digital marketing.

20:19 - 20:48

I go, OK, well, no, tell me, what does that mean? Like what do you actually need to pay for? And then when you really drill down to it, most people, most artists cannot actually vocalize what they want to pay for. And then that pivots to the thing that I constantly repeat to artists, which is that there is no shortage of artists that have made it with less and there will be no shortage of artists that don't make it with more.

20:49 - 21:05

So if money is not the barrier to your success, then why are you asking for money right now? And you need to be asking what is the price of this check that you're taking and a typical record deal? And it varies now.

21:05 - 21:24

But a typical record deal basically leaves the artist with 18 cents of every dollar. And that's a terrible deal. So that 500,000 dollars advance, or million dollar advance or whatever, I mean, that is a terrible interest rate and that is a terrible recoupment rate.

21:24 - 21:43

And granted, it's not going to affect your credit like a payday loan or something like that. But at the end of the day, these labels own you and they can stifle your creativity moving forward. And really, as an artist, it's about freedom of expression and creativity moving forward.

21:43 - 22:05

So I tell artists, hey, the second you take that check, the clock starts ticking. And as long as you're down to play the game, take the check. But be sure you know what you're doing with that money because you don't know all the terms and conditions that come along with it unless you ask, because your manager's not going to tell you and your lawyer is not going to tell you. And the label sure as hell is not going to tell you. So I would always ask what you're paying for.

22:05 - 22:09

That's great, David. And anything you'd add? Yeah, that's a great point.

22:09 - 22:43

I was going to say something similar aside from just a record deal in the other aspects of the music business. Same thing, touring. There's so many ways for artists to spend money and be upside down on tour when they don't even know what they're getting into. Just learning about how the tour deals work the way to sort of be a participant in your own success and bet on yourself rather than take an advance or an earn out deal or just different ways to end up upside down on tour really quickly when it doesn't have to be that way.

22:43 - 23:16

I think a lot of agents and promoters or people with the big promoter companies are of the same mindset. There's no sort of like fiduciary thought. It's just book as much as you can. There's no real concern or strategy behind it. They're just taking every offer and there's no strategic input. So I think it'd be important for artists to learn about the different costs that go into touring, the different way to structure those deals. Same with publishing demos. Really knowledgeable about this. But how does your publishing work? How does your catalog work?

23:16 - 23:40

Different ways to participate in that just across the whole business. Merch, I mean, we've done a lot in the merch business and learned over the years. We basically are just fully independent operation with merch at this point. But to get to that point, I mean, we did really a lot of business with a big company that wasn't providing a service.

23:40 - 23:53

It was sort of just taking advantage of the clients. So teaching artists going in, if merch is a priority, how to structure that in a way that you see all the upside and you're not just paying back in advance.

23:53 - 24:24

I think all those things, they're all kind of similar and they relate to a dance at about finance world as well. But there's just so many areas that could be real profit centers for artists. But whether it's through managers, lawyers or the artists themselves, ignorance or just wanting to jump into deals quickly, just being excited or whatever the reason, they don't end up with the right situations, and it takes years or legal work or whatever to get to crawl out of the hole or they never do.

24:24 - 24:33

It's, it's unfortunate. But these things are all set up to really help. They can be huge profit centers for artists and unfortunately, they don't take advantage of them.

24:34 - 24:47

That's great. So I'm going to let you both go here in a minute. But before I do, I said I was going to come back to TikTok. And I just love to hear, you know, quick 30 seconds maybe from each of you on your opinion of it.

24:47 - 25:18

The whole Microsoft potential purchase, the President's involvement. You both are so involved in culture. So what are your thoughts on TikTok? Who wants to go first? Take it, Dan. You got it. I think TikTok is one of the worst things to happen on the Internet. And there's been a lot of bad things that have happened on the Internet. I think that if you bent over and looked up the you-know-what of YouTube in the mirror, that's what TikTok is.

25:18 - 25:28

I think that it is the lowest level and lowest bar of creativity that basically we probably deserve as a society right now.

25:29 - 25:58

And if you look at the stuff that came off of YouTube, somebody like Justin Bieber, who's obviously immensely talented, and you look at the stuff that's coming off TikTok. I mean, the gap there is so wide. I really hope Microsoft buys it and then shuts it down, because I think the greatest thing that could possibly happen is to not have a generation of kids that are basically trained in micro expressions that they learn via a million other people on TikTok.

25:58 - 26:27

I also think that they're gatekeepers and moderators. Screening out poor and ugly people is one of the most disgusting things that I've ever heard in my entire life. And I think that that does an immense amount of damage to young people. And I think it creates a tremendous amount of anxiety in young people, far more anxiety than not having a phone or not being on TikTok could ever possibly create in young people.

26:27 - 26:47

And I the things I worried about when I was 15 was acne, tennis and girls, and the fact that I wasn't allowed to see rated R movies. And now kids have to worry that they're not good looking enough and that they're not rich enough because they can see only rich and good-looking people on TikTok. And I just think it's awful. And I know that was longer than 30 seconds, but I feel so very strongly about this.

26:48 - 27:06

All great points, David. Anything you would add? I don't know what else I can add. It pretty much sums it up. I love it. So. Hey, David, Dan, thanks so much for stepping into the spotlight today and sharing your experiences on The Big Stage. It's really great to talk to you both. So until next time. Thanks so much. Thank you. Thank you, guys.

27:07 - 27:37

Thank you for listening. This has been The Big Stage. If you enjoyed this episode and you haven't subscribe to our podcast yet, please go to Apple podcast, Spotify, wherever you listen to your podcast. Also, please e-mail us with your thoughts, questions, and feedback to insights@Bernstein.com, and be sure to find us on Twitter and Instagram at BernsteinPWM. Bernstein—making money meaningful for individuals, families and foundations for over 50 years. Visit us at Bernstein.com.