John A. Malm, Jr.

Trent Reznor and John Malm

John A. Malm, Jr. is best known as Trent Reznor's former manager through his wholly owned management company, J. Artist Management ("JAM") (later dba Conservative Management), and co-founder of Nothing Records. In spite of the eventual legal tangles between Malm and Reznor, Malm was among Reznor's thanks during his acceptance speech when Nine Inch Nails was inducted into the Rock And Roll Hall Of Fame.

History

Early History

Malm was born in Cleveland, Ohio, where he grew up and attended Denison University, achieving a degree in Mass Media Communications. He worked as a manager for his university radio station during his time at Denison.

Malm worked for two years as a promoter for shows at the Phantasy Theatre and Niteclub. [1] He then began his artist management career by managing several local acts, including Lucky Pierre and System 56, and incorporated JAM in 1985. He soon became the promoter and manager of the local band Exotic Birds, which Reznor was a member of at the time. Reznor left the Exotic Birds in 1987, and Malm informally became his manager, without a contract. JAM helped Reznor secure a recording contract for Nine Inch Nails with TVT Records in early 1989. Malm and Reznor signed a formal management agreement on April 20, 1989. [2]

With Nine Inch Nails

After the acquisition of Nine Inch Nails' recording contract from TVT by Interscope in 1992, Interscope offered to help setup a vanity record label, Nothing Records, jointly owned by Reznor and Malm. [3] This agreement continued as both Malm and Reznor saw great success throughout the 90's, signing several big acts and personal favorites to Nothing, such as Marilyn Manson, Pop Will Eat Itself, and Prick.

In addition to artist management, Reznor entrusted Malm with handling most other non-creative aspects of his musical career, including business management and legal affairs. Besides Nothing Records, Reznor and Malm jointly created and owned Object for band merchandise, Hot Snakes LLC for ownership of Nothing Studios, and Nothing Interactive.

Legal Clash

In September 2003, Reznor, suspecting that Malm had "run [his] finances into the ground," hired an outside business management firm for the first time. Upon confirming accounting and contractual irregularities, Reznor fired Malm in December 2003. On April 21, 2004, Malm sued Reznor for unpaid commissions throughout his career, totaling $2.2 million. The newly sober Reznor counter sued Malm for breach of fiduciary duty and fraud on May 19, 2004. Reznor alleged that Malm took advantage of his addictions and manipulated him into signing unfair agreements, including joint ownership of property and businesses that Reznor never intended, such as the NIN trademarks. Malm claimed that the 1989 Management Agreement entitled Malm to 20% of Reznor's gross earnings for an indefinite time, including continuing commissions on Reznor's future income derived from contracts signed while the agreement was in force (such as future albums for the Interscope record contract), even if Reznor chose to seek new management. [4]

On May 27, 2005, after a two-week trial, a jury found JAM and Malm liable for breach of fiduciary duty, fraud, conversion, and breach of contract, and awarded Reznor damages in the amount of $2.93 million, plus an additional $1.69 million in interest, as calculated by the court. The court also ordered that all jointly held trademarks related to Nine Inch Nails and Tapeworm be transferred to Reznor's sole ownership and rescinded the 1989 Management Agreement with respect to all unfulfilled obligations, including any potential future commissions owed. [5]

Trent Reznor's Comments

Reznor has made several subtle and direct comments about the situation with Malm.

The Associated Press reported that in court, Reznor said:

"John was the business guy, and I was the guy working for nothing in the studio."

External Links

• MTV Article On The Lawsuit
• Wikipedia Article on John Malm