Management Agreement

Management Agreements for Artists

When considering a management agreement, there are several key factors to think about if someone shows interest in managing you:

Relationship Overview

• Interest from a Manager: If someone is interested in you as a manager, it's good news.
• Understanding the Relationship: Break down the relationship into basic aspects.

Activities Managed

• Scope of Management:
  • What activities will the manager handle?
  • Nowadays, managers often cover a range of responsibilities, including:
    • Live performances
    • Recording artists
    • Songwriting
    • Personal appearances
    • DJing
    • Acting
    • Modeling

Agreement Length and Territory

• Duration: How long will the agreement last?
• Territory: Is it limited to the UK, Europe, or the whole world?
• Manager's Resources: Consider what resources the manager has to manage an artist:
  • If a manager offers a deal for all activities for five years globally, ensure to ask relevant questions.

Financial Aspects

• Commission Clause: This is a key point for most managers and artists since it concerns money.
  • Percentage Breakdown: Artists might hear "managers get 20%," but it often lacks detail about what that percentage refers to.
  • Calculating the Cut: Understand what income the commission applies to. Potential sources include:
    • Recordings
    • Songs
    • Gigs
    • Merchandising

Understanding "Net" vs. "Gross"

• Net Income Calculation: Usually, in the UK, managers receive 20% net on live performances:
  • Calculate all income and deduct reasonable costs (e.g., travel, accommodation, PA hire, agents' fees).
  • For other income, it's typically gross but may have exclusions.

Exclusions from Commission

• Recording Advances: If an artist receives an advance that includes recording costs and spends it on recording, managers should not earn a commission on that.

Post-Term / Sunset Provisions

• Transition After Termination:
  • What happens when the manager stops managing the artist?
  • It's generally considered unfair if the manager suddenly gets no entitlement.
  • A fair system allows for some continued income from previous sales but not at the full commission rate indefinitely.

Logistical Considerations

• Money Handling: Determine who receives the money:
  • Options may include an accountant, the manager, or the band.
  • For bands, it's often best to have their accountant manage funds.

In summary, management agreements involve various elements that require careful consideration to ensure fairness and clarity for both the artist and the manager.