The modeling industry is one that is heavily affected by tides of consumerism and consumption. It depends on the ebbs and flows of the luxury market. However, while it is a common scenario to see dozens of models go home defeated and broke or even worse - in debt, agencies, for the most part, are able to survive. The business structure of an agency has a direct and consistent road to profit, the models they represent however are working in a system where they must first make hefty investments in their messy journey to profitability. The overwhelming majority of models who come to the major markets (NYC, London, Milan, Paris, etc.) to work for the first time are under 21 and are not being directed to prioritize stability. Rather, mostly in part to capitalizing on their youth and “momentum”, they come financially dependent and with little knowledge of the agency business model. Expenses, fees, loans and professional costs rapidly mount. Some of the most common expenses a new model may see include;
Airfare to bring a model from her hometown to the city in which she will be working is often covered up front by the agency.
If the model is not American, often there is a lengthy Visa process. Visa fees can rise quickly when you factor in the government processing fees and the fees that could be associated with utilizing the services of an agency commissioned immigration, attorney.
Photo Tests to build the model’s portfolio, with wardrobe, hair and M/U and retouching can cost anywhere from $300 to $800 for a single session. Add to that costs for additional selections.
Agencies maintain model apartments as a convenient way to house models who are not from the big cities they are working in, which is the overwhelming majority of new faces. On average there can be 4 - 6 models in a dormitory-style apartment. Each model owes rent.
“Pocket money” is also distributed on a judgement basis once the girls have run out of the money they came with, which typically isn’t very much and is based on a daily living budget from their hometowns not New York, LA or Paris.
Production and distribution of model comp cards are also charged to the model account. These are typically listed as “Print” and “Messenger” fees.
All agencies have websites, where you can view the model portfolios. On the backend of these websites, it acts as a promotional tool. Agents use the website as the primary system to promote models to clients and submit them for jobs. Often this is charged as online marketing.
All of these charges are charged to the models ‘account’. As jobs come in, the model is most commonly working against a hefty negative balance. As the girl gets paid bookings, the sum of their rate (minus the 20% model fee to the agency) is subtracted from their debt. However, as the girl starts to work the other expenses still mount. Of course as with any freelance entertainer, as a model you don’t receive payment at the exact moment the job commences. The client must be invoiced and is given a certain amount of time to pay. Sometimes, these payments take longer than others depending on the reliability of the client or complexity of the paperwork. While a model is waiting for a payout she may ask for an advance. That advance is also charged a fee.
All these costs are a part of a large investment into a career. A career that by all mainstream job standards can be extremely flexible, rewarding and lucrative. However, the road to get there is more than many can withstand. Once a model has started to earn from her bookings, it takes a great amount of money management to get closer to profit and unfortunately agencies traditionally are not as proactive in this area. For a new model attempting to budget her proximity to making a profit, it is incredibly easy to overlook calculations. For example, f a model who currently owes $4500 to her agency gets booked on a $3000 job, she has every reason to believe she has made a healthy dent in her debt. However, there is a good chance she needed that payout before the client has paid the agency, therefore forcing the model to request an advance on that job. Depending on how dire the situation the model will typically ask for about 50% of that payout in advance. When the client finally does pay the agency that $3000 the agency must not only deduct the model commission fee (20%) but also the advance ($1500) plus the advance fee which is typically 15%. ($225). The remaining $675 is applied to her debt and she has only made a tiny hole in her balance still owing close to $4000. A model, in the most general of calculations, would have to be booking jobs that net at least half their monthly expenses on a regular basis.
Just as the IRS advises those in debt to use every resource possible to pay in full, rather than pay over time accruing more and more interest, a models’ road to profit is affected drastically by how much money of their own they have to begin with. However, many models come from modest backgrounds often using early profits to become the breadwinners of their families. In the early stages of a model’s career, particularly a model being groomed for a high fashion career, many high profile jobs are unpaid. Editorials for magazines and designer runway shows, for example, tend to be the lowest paid jobs in the spectrum. In the infancy stages of this type of career, the opportunity to work with elite photographers and designers is the compensation. Unfortunately, a great number of these models who make these great investments into their career don’t hit stardom. They are now stuck in an expensive city, in debt and still financially dependent. The only option at this point is to work in indentured servitude, taking low profile jobs that pay anything. The objective here not to get in the black but just break even, at best.
Agencies are firms that facilitate the careers of its represented entertainers, who act as “independent contractors”. While it is not the agency’s job to personally take on promotional or living expenses, the problem arises when we touch on the issue of disclosure and communication. Over the past 10 years, there have been several high-profile lawsuits between models and their agencies, typically on the issue of full disclosure. Among the most high profile has been a class action suit including Wilhelmina claiming failure to account for payments and a 2010 suit against Next Models for misappropriation of funds (full disclosure; I was an employee of Next Models for several years and have never been witness to anything other than upstanding accounting practices). This along with the testimonies of many models who have since transitioned into other careers has neutralized the issue of management transparency.
How much the average model would need to pass the point of ‘breaking even’ depends entirely on the category of work the model is receiving and then, of course, the frequency of bookings. Luck is an undeniable factor in how fast a model can get to this point of her/his career; however making honest communication and early financial stability a priority before putting a model on the fast and expensive track to success is most pivotal.