Modeling agencies rip off models by giving out loans, taking commissions and charging for expenses.
A new CNNMoney investigation is breaking down the doors and revealing how modeling agencies and model management companies earn millions upon millions of dollars while their talents are left struggling. Apparently, it all comes down to 20% commission fees and “double-dipping” – where agencies charge not only 20% commission and the model’s client another 20% fee.
A pay stub from one model showed how a big $30,000 payday became only $6,475 after a 20% commission and a big tax hit (though she’s hopeful she’ll get some of that back at tax time). Yes, this may sound like a lot. But this is before any other expenses are taken out. And because the pay is wildly inconsistent, many models are forced to rely on a one-time payment like this for months or even longer. Another model, for example, saw a $10,000 job shrink to less than $4,000 after taxes, commissions and expenses.
According to the report, in order to charge these high commissions, some attorneys argue that companies in NYC, are acting as “management companies” instead of employment agencies. This allows for modeling agencies to avoid state laws and employment agency fees. Consequently, making a lot more money. In fact, 10 years ago, a class action lawsuit challenged these commissions and talent agencies paid out millions of dollars in a settlement. However, 20% commissions is still a standard across the modeling industry.
In addition, certain modeling agencies charge their talent for walking lessons, dermatology visits and photo shoots. Consequently, models are left in a “perpetual state of dependence,” as model management companies loan out money to their talent and charge 5% interest.
“Advances were the only way you could actually afford to get anything,” she said. “They are still making money off of you, but it’s like I need to eat and pay my bills.”
“[Cash advances] kept the models in a perpetual state of dependence,” attorneys at Quinn Emanuel wrote in court filings. “This practice is particularly insidious because the models only needed the advances in the first place because of defendants’ unlawful practice of not paying a model his or her wages until many months after the work had been performed (if ever).”
While not all modeling agencies engage in this type of scam, manipulation and abandonment, there are plenty that rip off the dreams of thousands of aspiring models.
Read the full report here.