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‘Oh well, Christmas is ruined’: Manchester rap collective manager on financial ruin caused by agency collapse

Employees and unpaid clients of Elastic Artists face financial uncertainty as the dance music and urban acts booking agency teeters on the brink of administration.

And for Manchester-based DJ and MC collective LEVELZ, non-payment of owed monies by Elastic is putting serious stresses on both group and personal finances.

Two of LEVELZ’s recent live shows – booked through Elastic – in Room One at London’s Fabric nightclub and at In:Motion in Bristol went unpaid.

Richard Reason, manager of the collective, has been told of famous artists being owed circa £70,000 by the agency, however it’s the little reported upon paycheck-to-paycheck artists who experience a tighter financial squeeze.

“It has literally taken food and rent out of everyone’s mouths,” he explained to MM.

“Some of LEVELZ do have successful individual careers but for the others it’s a big thing as they don’t have safety nets.

“It’s all well and good going to the guys that we didn’t lose £70,000 but when you’re losing £300-400 each that means no rent and no Christmas presents for anyone.

“As a collective we are owed about five grand.

“Together we were owed over a five figure sum as lot of the LEVELZ collective were also signed as individual artists.”

After Elastic failed to pay owed money, Reason and other agents were called into a meeting by the directors, in which administrators were also present.

It was at this meeting that the manager was informed that any money left in the Elastic coffers would be used to pay back creditors – and not the artists.

“Elastic said they owed loads of money to the taxman and money was missing from the client account used for paying artists,” Reason explained.

“In that case, the hierarchy of getting paid is: the taxman, the expensive administrators, then everyone on salaries and at the very bottom are the musicians and artists.

“LEVELZ will get a pence in the pound of what they’re owed.”

Reason empathised with the anger LEVELZ expressed by hijacking Elastic’s social media accounts two weeks ago – using his login details.

They retweeted complaints against the company, gave out Union information and uploaded homemade parody videos pretending to take Reason hostage.

Reason explained that, ironically, he felt a ‘hostage to the situation’, whilst highlighting the difficulty with a situation where he ultimately is responsible for the artists.

Moss Side MC Skittles – real name Liam Kelly – said: “Rich is a good mate and not just an agent.

“Elastic have robbed me and my family and put my mates in an awkward position whereby the only people I can go to be mad at are my mates.

“If the money’s not there the situation is this – where is the guy and who has got the money owed?”

YouTube have since deleted the videos, but their actions drew attention to a previously unreported situation.

The social media hijack gained widespread support from other artists, fans and a musician’s union and sped up the insolvency process – allowing employees to get redundancy pay sooner.

Whilst in control of Elastic’s twitter feed, LEVELZ tweeted: “Sorry that @LEVELZMCR are having to apologise for all the missing fees and images rather than Elastic themselves. Spineless.”

Though there has been questions from within the music industry as to whether LEVELZ social media hijack was right, the terms of the contract LEVELZ had signed were broken.

Elastic promised that performance money owed would be ring-fenced in an Escrow account, which is used to hold artists money safely and allowing the agency to take a 15% fee.

However when that money went missing, as Elastic is a Limited company, no-one could be held to account.

Reason said: “Law is a rich man games so legally we can’t do much and they are a Limited company so we would have just been put in a queue.

“Although, there is a real point of contention that contractually our money was meant to be ring-fenced.

“With Legal Aid not existing anymore, we’re better off making the best out of a bad situation and trying to be funny and creative.”

Though the LEVELZ response videos have been well received by fellow artists, it is not just the artists who felt the strain.

A member of Elastic’s salaried staff has also spoken to Reason about having not been paid, having to take their children out of nurseries and not being able to pay the rent.

And the non-payments by Elastic have also delayed any creative plans for LEVELZ, who use cinema-quality music videos to promote their music.

“LEVELZ had a mix-tape and two videos planned and now we cant afford to hire any of the equipment that we needed to do that,” Reason explained.

“We can’t even pay this month’s studio rent.

“We make very little off our music sales. Our bread and butter is getting paid for live shows.”

For months Elastic had kept late rent payments, debts of £147,000 and a 2014 tax-year loss of £7,000 hidden from its clients.

Reason believes that Elastic’s poor finances were deliberately obscured through lack of communication and the reticence of other unpaid artists to go public.

In the meeting into which Reason was called, he was asked to cover-up the extent of the financial issues and to ‘keep the artists in the dark’, until the problems had been resolved.

It took a tweet from DJ and Eglo Records founder Alexander Nutt on November 24 to bring the issue to wider attention, with the artist later returning to Twitter to say: “Oh well, Xmas is ruined and I don’t know how I’m gonna pay the rent.”

After Nutt’s tweets and with no positive resolution forthcoming, Reason faced pressure from LEVELZ to raise awareness about the money owed to them and other artists, who saw it as a ‘massive injustice’.

“They [Elastic] didn’t want to speak to anyone – or anyone to speak – in an attempt to obfuscate the situation,” he said.

“Communication was horrendous.”

However a memo from Elastic to its clients was sent, published in part by Resident Advisor on November 25.

It explained that the company was ‘experiencing financial difficulties’ and was ‘exploring options to restore the company’s liquidity and transfer the ownership to a new team’.

Reason feels like this was too late, wholly insensitive and couched in deliberately misleading corporate jargon.

“When we are talking about young kids from Moss Side and Wythenshawe, they don’t understand liquidators and administrators,” he said.

“In the old school Manchester way of things if over 10,000 grand went walkabout… thank God Manchester has calmed down since I’ve been here.

“Serious shit can go down for that sort of money – they’re all my family and they’re good creative kids but they’re still from the street.”

He explains that Elastic – miles away in their London offices – are too disconnected from the realities of living on Manchester’s estates.

“The lads understand right and wrong,” he said.

“They understand getting paid or not getting paid and that’s why it’s been outrageous how Elastic have acted – they’re living in a different world.

“This isn’t a situation where people can go live with their mum and dad or have savings if things go up in the air.

“It’s a bit rougher and realer round here.”

LEVELZ have since transferred the responsibility for their bookings via a well-known associate to Earth Agency.

The group next plays live at FAC251 on December 22 in a fundraiser for Manchester’s homeless in association with Manchester Central Foodbank, for which entrance can be paid in donations or through tinned and dried food.

Image courtesy of Rinse FM, via YouTube, with thanks

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