Cunning Producer Tricks

Beware of the producer who agrees to do something for free. Sometimes this is legit, but often it’s the producer trying to impose a virtual fee for his work.
Below are two sets of numbers for the same project. On the left is the budget the producer submitted to the production company. On the right is the real budget that the producer kept to himself. This budget was for a 24-track traditional recording for $25,000.
Submitted Budget Producer's Actual Budget
Basic Tracks Basic Tracks
Rehearsals
– one week in rehearsal room:		 $600
 Rehearsal In studio: $560
Lockout for studio,7 days: $4,000
 One week lockout in large studio $4,000
(10 reels of 2″@$150 per reel):
$1,500		 Tape $1,720
Tips $50
1 day in smaller studio: $700 Assistant: $140
Overdubs Overdubs
One week in smaller owner/operator studio: $2,500 2 weeks at smaller studio: $2,600
Assistant: $1,400
Maintenance fee: $40
Mix Mix
11 days at mix studio: $10,000 11 days at ___ Studio: $5,000
Tape (5 reels 996,$50 per reel): $250 1/2 tape@ $50 + shipping: $400
Rentals: $1,000 Rentals: $450
DATs: $60
 DATs: $88
Travel: $200
Miscellaneous: $200
Mix Engineer: $1,000
Phone: $100
Post-production mastering Post-production mastering
Digital editing, 32 hours $1,200
 Digital editing 32 hrs.@ $40 per hr: $1,280
Sequence premastering, 4 hrs.@ $40 per hr. $200 Sequencing/premastering@ $40 per hr: $200
Mastering, 4 hrs.@ $175 per hr. $700 Mastering, 4 hrs.@ $175 per hr: $700
Engineer/producer fee: $3,000 Eng/producing fee: $4,000
Total
 $25,710
 Total
 $24,128
Rebate from tape return: $1,112
Adjusted total: $23,016
EXPLANATION:
Here the producer managed to skim an additional $2,694 by doing two things. The first is a typical kickback arrangement with the studio. For every dollar billed, the studio kicks back a “commission” to the producer. This is legal, believe it or not. But the second technique is quite clever and questionably legal: The tape rebate. This is the producer’s way of hiding additional profit. Here’s how it works:
 

Artists and small production companies rarely keep track of how much recording tape is used on a project. Even major labels suffer from this “fall through the cracks” syndrome. The tape that is unused gets returned to the supplier for a credit to the producer. This credit will be never reported or passed back to the label as it should. In the next project, to the next client, the producer will overcharge him tape costs as well, and again he will return the unused reels. Over time, the producer can build up quite a hefty cash reserve.
 

For details and other examples of ways producers “skim” cash form recording budgets see pages 124-138 in Confessions.
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