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Bankers are key players in artists’ backstage crew

By Ron Cox

First published as a guest column in the Nashville Business Journal January 28, 2011 edition.

With Music & Entertainment being one of the key industries in Nashville, it is no surprise that banks offer specialized services for this industry – but what does that really mean? 

Do bankers in Nashville trade their pinstripes for sequined suits? Do they wear cowboy boots and join in jam sessions?

Well, not necessarily, but relationships are vitally important to success in our business, and bankers are at their best when they are part of an artist’s or songwriter’s support team that often includes an agent, manager, accountant, and an attorney, among others. Understanding the various roles of the players on these teams, and developing trusting relationships with the client’s best interests at heart, is an absolute requirement to a banker working in this particular industry.

The products and services offered to music clients are generally the same as other consumer or business clients –home mortgages, working capital lines of credit, checking accounts and business loans. But, there are some significant differences.

One of the biggest is having an understanding and appreciation for the value of the collateral that secures any credit. In the entertainment industry, collateral is often based on ‘intellectual property’ rather than more tangible assets that banks typically prefer. A bank’s credit underwriting team must be able to assess these intangible values in order to evaluate the risk and reward proposition of what the customer is requesting.

Also, the cash flow for performing artists and musicians can vary wildly and don’t fit a traditional ‘monthly income’ model. For example, the year an artist spends working on an album may actually yield little or no income, but time on the road performing – selling tickets and merchandise - can be very lucrative. For songwriters, there is a lag between writing a song, having it recorded and actually receiving royalties. This waiting time can easily be a year or more. Bankers must understand the revenue cycles of this industry and be able to help manage those income streams.

Finally, throw those traditional ‘banker’s hours’ out the window. A music industry banker is expected to be available 24/7 because artists don’t keep standard office hours and often work out of town. And if corporate business gets done on the golf course, music industry business gets done in clubs and performance venues. Plus, there are after hours industry functions, awards shows, and fundraisers to attend.

And, yes, sometimes I put on my boots, grab my banjo and join in a jam session. There’s no better way to end my day . . . even if it is after office hours.


Ron Cox is a Senior Vice President and Private Client Banker with Avenue Bank’s Music & Entertainment Group. He also plays banjo and is a member of The Hummingbirds, Avenue Bank’s corporate band.

Posted by Lisa Meiers on 02/02 at 05:46 AM


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