A quick look at the management contract…

Here are just a few important terms in the management contract…

  1. TERRITORY The countries the management contract covers is important to consider. The manager will probably want to represent you for ‘the world’ for the simple reason they get more commission and complete control over their ‘master plan’. Of course, this is fine as long they can represent effectively throughout the world. For this they must have knowledge of foreign markets, especially the US. Do they have an office in the US? Or, will they be travelling there. And, If so, who’s paying for the flights? If their knowledge of the US market is not up to scratch then consider a territory such as ‘the world outside of the US’.
  2. ACTIVITIES COVERED Will the manager cover all aspects of your career or just music? There are several examples of musicians crossing into the world of acting. Does the manager have experience in this field? Would you be better off finding an agent or manager who works specifically in that area? This is important to make clear when discussing the contract.
  3. KEY-MAN PROVISIONS Make sure the contract says the manager must spend a reasonable amount of time working for you. It may be useful to consider whether they manage any other acts and how many when negotiating the contract. Another thing you can do is include a ‘key-man’ clause which can come into effect if the manager isn’t representing you sufficiently. This gives you the opportunity to end the contract if the manager’s not pulling their weight.
  4. LENGTH OF CONTRACT The amount of time the contract runs for varies. It could be open ended i.e. it comes to an end when one party’s had enough. However, most commonly, it runs for a 3-5 year term. IMPORTANT: as an artist NEVER sign a contract that has no end date.
  5. ALBUM CYCLES Sometimes the length of a contract is determined by album cycles. A contract can last for one or more album cycles. An album cycle starts from the writing of the first songs and ends when the last piece of promotion work is done. Sometimes a contract may say, for example, it lasts for two album cycles or three years, whichever comes first.
  6. ENDING THE TERM EARLY If both parties want to end the contract early an agreement can be reached on the manager’s share of future income earned by the artist. This is called post-term commission. In this case a ‘sunset clause’ can come into effect which allows the manager to earn some commission after the contract has ended (because of all the hard work they put into you getting this far). How long should they continue to earn this commission? Normally 20% for the first 5 years then 10% for the next 5 years.

Of course there is much more to a management contract than these 6 points but they are important to consider when negotiating a contract.

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3 comments

  1. Sam · May 16, 2015

    Hi there. Great article but want to know more.
    How would you negotiate the contract? As in how much leeway would parties be willing generally to change?

    Like

    • bdmellis93 · May 17, 2015

      Hey man, thanks for commenting.

      The best thing to do would be to get a lawyer. Also, it’s obviously best to get an independent lawyer from your manager because there may be conflicting opinions. There is usually a clause included in management contracts saying the artist has been advised to take independent legal advice. A lot of your bargaining power as an artist is down to your track record, especially to do with the manager’s commission which I haven’t talked about in this article. Commission is generally around 20% but this can be negotiated down to 10-15% if you’re a very successful artist. Similarly, if the manager has invested his own money into you or he is particularly respected in the industry and can open lots of opportunities for you, he may want a 25% commission. As I say it’s all negotiable but getting a lawyer is the most important thing to do because they will be able to tell you how fair the deal is.

      Hope that helped. By the way, how did you find this article? Just interested in knowing how you came across it, would appreciate it.

      Cheers

      Ben

      Like

  2. Sam · May 18, 2015

    Hey again.
    Thanks for the info.
    I asked a mate of Facebook about the music business and he sent me this link.
    Keep updating!

    Liked by 1 person

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