Coco Rocha, a model who has a management and ownership stake in Nomad Mgmt Modeling Agency and has served as brand director, works with models to help them develop strategies for their careers. She spoke to WWD about the lack of financial transparency in the modeling industry.
The bottom line? Models needs to read their contracts carefully and take the time to understand what they are signing.
Here’s what she had to say.
WWD: Why do you think there’s such a lack of transparency when it comes to model payments and service fees?
Coco Rocha: At this point in my career I’ve worked with most of the major modeling agencies and I currently own and run my own agency, Nomad. What I’ve seen over the last 15 years is that some agencies are much better than others in terms of their prioritizing timely payments and transparent accounting. I would attribute this sliding-scale of transparency in payment to a few factors:
• The first being agency priority and systems put in place (or NOT put in place).
• The next being a systemic issue in the modeling and fashion business: most often modeling agencies are the middle men regarding payment between a client (brand) and the model. Sometimes, surprisingly, even big and prestigious brands can be slow and negligent on making payment. I still have a top-tier American fashion magazine, known and respected around the world, that has owed me a decent amount of money for over a decade. My agency and I have asked for our payment many times, and the images taken are a matter of historical record, but requests have been ignored for years and the check is clearly not in the mail.
• Lastly, there are also technology issues — statement information can be significantly limited by the booking software and/or accounting systems that an agency uses, and how those many various systems sync.
Service fees are a well-known part of the business of modeling and, in my opinion, should absolutely be outlined in the agreement the model signs with an agency. Service fees are not abnormal or problematic in and of themselves. An issue arises when, without a model’s express permission, rather than adding the standard additional 20 percent on top, the agency takes an additional 20 percent from the model’s gross in addition to their standard commission. This is not common and under most standard agency agreements would not be allowed.
Something I stress repeatedly at my model camp, where I train and mentor models from many different agencies, is that they must read their contracts carefully and take the time to understand what they are signing. Far too many models are enamored with the idea of being signed and, as a result, jump into agreeing to a document they have not taken the time to fully understand. When you sign with an agency you are basically getting into a marriage with them and the contract is both the pre-nup and the marriage license that will dictate the next few years of your life.
WWD: What recourse do models have if they’re not paid in a timely manner?
C.R.: In most of the world, models have the same recourse that any self-employed person has when faced with untimely payments — the ultimate option being to take it to court. Before that, though, models should know and stay in touch with their agency accounting departments to get updates on payments. Agencies by nature want models to get paid, because when the model gets her money, the agency does, too. On occasion legal action might be warranted to collect and, if so, models should not be afraid to have a lawyer assist them in collecting their money if it’s financially feasible. When payments are slow, everyone has to do a little pushing and nagging. The model nags the agency, the agency nags the client and when all else fails a lawyer steps in to nag a little more aggressively.
WWD: Why aren’t modeling agencies upfront about the service fees they charge and what it entails? From your experience, what does the service fee entail, i.e., presence on the web site?
C.R.: A service fee does not include the web site, that is charged separately. The service fee should be outlined in the signed model agreement and also stated blatantly and upfront when agents quote job rates to models, i.e., “$1,000 + 20 percent.” To be frank, on the agency side, the modeling business is not one with high profit margins. Without the service fee, agencies would simply not be able to stay open and without agencies models are left to fend entirely for themselves. Most reputable agencies are upfront with the model about the service fees they charge the customers. Both the model commission and the agency service fee are used to pay for agency operating expenses and employee salaries, etc. The costs of running brick-and-mortar agencies are similar costs to running any office in a major city.
WWD: Do you hear about modeling agencies overcharging for company apartments, and making money on the apartments?
C.R.: I’ve heard stories of unethical agencies and managers that charge exorbitant amounts for all sort of items. Personally, I was once charged $1,200 a month for paper clips and envelopes by individuals I will never work with again. It was not illegal but it certainly was not ethical. Most reputable agencies are transparent on apartment fees, just as you would need to be in any rental situation. The life of a model is nomadic (no pun intended) and models often need short-term housing as they come and go from certain global markets, four days here, three weeks there. Many agencies have yearlong leases they must pay every month, regardless of whether models are staying on the property or not. Certain months are not busy in fashion capitals and the apartments will sit empty. The goal of the model apartment, at least for Nomad, is not to make money. It’s there to provide easy and reasonable housing for transient models at a break-even status. I usually suggest that models also look into Airbnb if they can afford it. In years gone by, before Airbnb, agency apartments were essential. How else would a model come to New York for a few weeks or months, without an insane hotel bill or a 12-month lease on an apartment that needed furniture and demanded her paying in her first and last month’s rent and a security deposit? That was not a financially viable option for a model who was going to New York to work for a short period of time. In 2019, regardless of whether a model is staying in a hotel, an Airbnb, or a model apartment I think it’s extremely important that the model understands realistically what he or she can afford. The bottom line is, while there are unethical agencies out there that overcharge — there are also some models who are too lazy to read and understand their agreement or count the costs when it comes to what they can afford.
WWD: Do agencies withhold payments if a model switches to another agency? Does that happen often?
C.R.: Legally an agency is not entitled to keep money that a model has earned and this is never something Nomad does. That having been said, shady people exist in every industry and just because something is illegal, doesn’t mean some dishonest business won’t do it. Often models leave agencies and expect all outstanding income to be paid overnight, when in reality the client hasn’t paid and the agency is still chasing the money. Some agencies do put liquidated damage provisions into the management agreement, which might allow them to hold onto some or all money if a model terminates her contract early or is otherwise in breach. I tell models at my model camp that this sort of provision should always be deleted and removed, but again, that means the model must read and negotiate his or her contract.
WWD: Do you know any models who would talk to me about problems they’ve had trying to get paid?
C.R.: Yes, me! Just this week I got an update on a client that is two-and-a-half years late on payment. My team at Nomad have been chasing them via e-mail and phone calls for that entire time. As we understand it, the client’s business partner took the money and closed the old accounts and so the remaining owner is working hard to keep the company alive and paying off the debt to us slowly but surely. This is not a typical story, but all kinds of things happen at companies that cause them to default on payments. Models often don’t grasp that because they themselves have never had to handle collections.
WWD: Are models afraid to speak up because the agencies are sponsoring their work visas?
C.R.: I believe it would be quite difficult to “cancel” a work visa in the legal sense, but it could well be that some agencies threaten this, regardless of whether they could really follow up on it. At Nomad I stress to our models that they should feel free to bring any concerns to me, to their agents and their managers. Open and honest communication is key to any healthy relationship. In general, if models at other agencies are afraid to speak up, most often it’s because this is an extremely small industry and models fear being blacklisted if they are viewed as complainers or problematic. As a model who has often spoken out on all sorts of injustices within the industry, I can tell you that to an extent those fears are well-founded.
WWD: Do modeling agencies sometimes charge interest on loans they lend to models?
C.R.: Most agencies have a finance or interest charge listed in their model agreement. Generally it is far lower than the rate a bank or credit card would charge, but no model should ever be required to take an advance or loan from the agency. If they need an advance and have good credit, they could go to a bank or get a credit card, or get a loan from someone else. They should have options outside of the agency. At the end of the day, the model is the business and she is hiring the agency to assist her in her business. Any business has expenses — if you want to be a chef you’re going to need to invest in good pots and pans, knives, spices, maybe a kitchen or restaurant space. The business of modeling comes with expenses like test shoots, housing, travel, clothing, training and beyond. Those expenses are always the models’ expenses to pay. If she can’t pay herself at that moment, she might need to borrow money. Sometimes an agency will offer to do that, sometimes they will not. Regardless, when the day comes that the model wants to leave the agency, the business leaves with her. So many models incorrectly feel that they are an employee of the agency when in fact it is the other way around.