The manager is the one who helps guide an artist in the development of their music career, overseeing the day to day business affairs as well as advise them on decisions which may affect their career.
Their responsibilities also involve acting as a representative, negotiating with record companies and tour promoters discussing publishing deals and record deals in return for a percentage of your income, usually about 20%.
A Management Agreement clearly sets out the terms and conditions of the business partnership and the expectations and obligations of both the artist and the manager. Many things can be included in a Management Agreement, however, it is important that any legally binding contract that you intend to enter into is drafted by a suitably experienced music solicitor. Your solicitor should not be the same solicitor as your manager. Here are just some of the issues that should be addressed in a management agreement.
Scope – This can be territorial i.e. your manager wants to represent you all over the world. If your manager doesn’t have sufficient knowledge or experience in America you might want to appoint a US manager. It can also be material i.e. your manager may want to represent you in all activities in the entertainment industry. You can limit your manager to representing you only in your musical activities.
Length of Term – The length of Term of a Management Agreement is normally 3 to 5 years. It is in the artist’s interest to have the option to terminate the agreement earlier if set targets are not met i.e. if they have not secured you an acceptable recording deal or publishing deal within 18 months.
Commission – The standard rate for a manager is 20% of your earnings. Although this may vary i.e. could be 25% if your manager is exclusively involved in your career. If you are a producer, you may negotiate a rate of 15%.
How your manager is paid is extremely important. In general artists and managers will accept to calculate the commission on gross earnings after the deduction of certain expenses. However, this is not always the case; therefore you should discuss this with a lawyer prior to signing any agreement.
The manager receives a post-term commission, which means they will still earn commission on the records and songs exploited whilst they managed you. This is normally a period of 10 years.
The sunset commission rate should be gradually reduced over a period of time, typically for the first 5 years it will be at the full rate of 20% dropping down to 10% for the next 5 years. This may be negotiable.
The manager and the artist both have obligations. The manager should agree to make a satisfactory effort to advance and promote the artist’s career and consult with the artist regarding all activities undertaken. The artist should agree to attend all meetings and should also agree not to employ another person to act as the artist’s manager or representative.