Typical commission for managers
Lesson time: (2min 56sec)
Accountant Chris Panyai sets out how a manager's commission is typically calculated, including avoiding the dangers of double dipping
Course preview
This lesson is part of the course Music Business 101 for Artists
Watch a preview of the full course below.
Lesson transcript:
Understanding Managerial Charges in the Music Industry
First of all, it depends on what you agree on regarding the asset.
Managerial Fees
But normally, British managers charge 20% of the net.
- What "net" means is that if an artist gets, for example, that mythical £50,000, they will have certain direct costs.
- Legal costs will come off the £50,000.
- If there are any other direct costs (for example, if we were involved in any of the financial negotiations), our costs would also be deducted.
Example:
- Let's say after all deductions there's £40,000 left.
- The manager is entitled to 20% of that £40,000.
- So, that would be £8,000, plus VAT.
Advances and Touring
So that's where we are on any advances, whether it's publishing or recording royalty advances, or touring.
- Again, initially, an artist very rarely makes money touring.
- A manager is working for the artist, knowing very well that they are building up someone's career so that they can benefit from it later down the line.
Commission on Touring
Primarily on touring, commission is chargeable on the net, referring to net profit.
- This is after all ticket sales and costs in relation to the production are deducted.
- If there's a profit, we prepare the tour accounts and report to the artist and manager.
Example:
- We might say, "Right, you made £10,000 profit on this particular leg of the tour; please let us have your invoice for £2,000."
Additional Income Sources
There are other subsidiary income sources like PRS, PPL, and Levy rights.
- When those statements come in every three or four months, we look at them and send copies to management if they haven't already been sent.
- We request the manager to send us their invoice based on the actual income coming in.
Important Notes
- You can't charge a fee for doing something and then charge a commission on the same income.
- It can't happen contractually as well; it won't be in the agreement.
Advice: If an artist has that arrangement, then my suggestion is they're with the wrong type of manager. That manager isn't going to progress their career, so they need to get out.
About the instructor
Imogen Heap is a Grammy-winning English singer, songwriter, producer and technologist whose influence runs through two decades of pop, electronic and film music — and through much of the technology modern artists now take for granted. Born in London in 1977 and classically trained on piano, cello and clarinet, she released her debut album 'iMegaphone' in 1998 before forming the duo Frou Frou with producer Guy Sigsworth, whose song 'Let Go' reached a global audience through the film Garden State. Her self-written, self-produced album 'Speak for Yourself' (2005) delivered 'Hide and Seek', the a cappella landmark that later powered Jason Derulo's chart-topping 'Whatcha Say' and Ariana Grande's 'Goodnight n Go', and continues to find new generations of listeners. 'Ellipse' (2009) won the Grammy Award for Best Engineered Album, Non-Classical — recorded and engineered in her own home studio — and she went on to co-write and produce 'Clean' on Taylor Swift's Album of the Year-winning '1989'. She also composed the score for the stage play 'Harry Potter and the Cursed Child'. A relentless innovator, Heap developed the MI.MU gestural gloves — recognised with three honorary doctorates — and founded Mycelia and The Creative Passport, initiatives building a fairer data ecosystem for artists. In 2024 she returned with 'What Have You Done to Me?', created with her AI vocal alter ego Mogen, while a viral resurgence of 'Headlock' brought her music to millions of new fans. read more