Key Contract Terms For Musicians And Managers – Music and the Arts

Most musicians want nothing more than to spend time creating and
performing. But being a professional artist also involves running a
business – a responsibility that not all musicians can undertake.
Hiring an effective manager is one way that artists can ensure they
have plenty of time to hone their craft. In addition to handling
the technical and logistic aspects of a budding artist’s
career, good managers will free up an artist’s schedule so they
can keep the creative juices flowing. So, what are some key terms
to include in an artist management contract?

What are a Manager’s Responsibilities?

There is no industry standard or definition for a manager’s
role. Therefore, the manager’s responsibilities should be
spelled out in the contract. Managers typically take care of
business decisions, social media, promotion, touring agreements and sponsorships. They are
also often involved in hiring and being the principal contact for
the rest of the artist’s professional team (including booking
agents, producers, attorneys, accountants and more). Managers can
also assist with the creative processes, such as arranging for collaborations with other artists, hiring backing musicians as well as a variety
of other small tasks that could take time away from the
artist’s creative endeavors.

How Much Do Managers Get Paid?

Managers typically receive 15% to 20% of the artist’s gross
earnings (before any expenses are deducted), but this figure can
vary from contract to contract. For example, a manager might start
at 20% and decrease his or her cut to 15% after a period of time or
once the artist achieves a certain level in their career.
Alternatively, the artist and manager might negotiate a fixed
percentage with some deductions (i.e., reducing or cancelling a
manager’s take for a tour that loses money). Other common
deductions from gross earnings can include:

• recording costs and payments to producers;
• payments to co-writers for their share of song earnings;
• money paid by a record company to offset losses from
  touring;
• costs for sound and lights during a performance;
• payments to opening acts; or
• income from non-entertainment-related sources.

The definition of an artist’s gross income, and any
deductions to it, will vary from contract to contract. These
deductions are often one of the critical points to be negotiated in
the agreement. Most manager agreements will specify that all of an
artist’s income is paid to the manager first, who will deduct
his or her commission and then pay the balance to the artist. As a
result, the manager will keep close tabs on an artist’s music royalties.

How Long Should My Management Contract Last?

In terms of management contract duration, artists will generally
want the shortest term possible, both for maximum flexibility and
to minimize any risk of becoming stuck with a sub-par manager. In
contrast, managers prefer a longer term because they recognize that
it takes a lot of time and effort to build a successful
artist’s career and don’t want their artists leaving at the
first glimpse of success.

Historically, many manager agreements tied the term to album
cycles. An album cycle typically includes the length of time
between writing, recording and releasing an album, along with the
subsequent promotion and tour. With the advent of streaming, this
practice has become much less popular. More recently, the duration
of the agreement term is based upon minimum earnings: if an artist
does not make a specific dollar amount or is not touring by a
certain date (often between eighteen months to two years from
signing), the artist can end the agreement.

Another approach is to tie the contract term to a milestone in
the artist’s career. For example, if the artist is not signed
to a record label or touring by a certain date, the artist could
end the agreement. If the agreement term is tied to this sort of
provision, another clause should require that the manager secure a
second tour or deal if or when the current one ends.

What Happens When the Agreement Ends?

When the agreement ends, both the artist and manager will have
to consider music publishing contracts, long term
endorsement deals or other commitments that may run for several
years after the agreement terminates. Most agreements will include
a “sunset clause.” A sunset clause reduces the percentage
commission the manager is entitled to down to zero, typically over
a three-to-five-year period after the contract term ends.

What Other Provisions Should Be Included?

Additional provisions that should be considered include a key
man provision and power of attorney. A key man clause should be
included if the manager works for a larger company or talent
agency. Such a provision will ensure that the artist will be able
to continue working with the same person. A power of attorney
clause will allow a manager to make binding decisions on the
artist’s behalf. Though convenient, artists may want to
approach power of attorney with caution and limit the scope of the
kinds of documents the manager may sign on the artist’s behalf
if they want more control over their business dealings.

What Should I Do if I Want a Written Agreement With My Manager
or Artist?

Music management agreements can be as complicated or as basic as
the artist and manager wants them to be, but they should be in
writing to avoid misunderstandings and surprises.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.