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Music Business: Artist Management Contracts


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Music Business: Artist Management Contracts

  2. 2. Band Management Contracts  There are a few basics to keep in mind about music manager contracts.  It Doesn't Have to be Complicated! - Especially if you're an indie band. Skip the fancy talk, and write a simple document that covers money, division of labor, and the length of the agreement.  It Should be Mutually Beneficial - Even if your manager has been at this longer than you, don't sign your life away for a crack at their expertise. A manager who really believes in you won't expect you to do so.  It Should be Signed in Good Faith - If you're looking for loopholes before you sign, or your manager is, there is a problem.  The Contract Term  The length of your agreement with the music manager is a good place to start. You will need to agree upon a term and a contract cancellation policy. A fair contract term is a one year agreement, with an option to extend the agreement at the end of the year if both parties agree. At that point, you can look at negotiating longer agreements, but a one year term is a good trial term for both parties. Be wary of giving the music manager options to extend without your agreement; if you do, you can be forced to stick with a manager you don't want.  Be sure your contact specifies how both parties can leave the deal.  The Job Expectations  What you expect your music manager to do really depends on where you are in your career. If you're a new band, your manager should be promoting your to labels, trying to get you gig, and generally trying to get things off the ground for you. If you're further along, your manager should be making sure other people are doing their jobs to promote your music. Simply be as clear as possible about what you need from a manager, and what they are willing to do. For instance, for an indie band, do you expect your manager to get merchandise made, or will the band take that on? Now is the time to get it all on the table.  The Management Fee  A standard management fee is usually around 15% - 20% of your earnings. Your manager takes a cut of proceeds from album sales, any label advance, and from the earnings from deals they have negotiated. Some do not get your money from your merchandise sales, your songwriting royalties, or from deals they have not negotiated (unless you have a prior agreement saying otherwise). Keep in mind that if you are a small band who hasn't started making an income yet, 15% -20% of nothing is still nothing. You may want to keep this earning potential in mind when you are nailing down the details of the job expectations.  The Manager's Expenses  Your manager should not be out of pocket for business expenses for promoting your band, but you need to reach an agreement on how expenses will work. You don't have to pay for your manager's phone costs or office costs, in most instances. You do have to pay for business trips your manager makes on your behalf and reasonable costs like taking a label rep out for drinks. The best way to handle expenses is to pay them at set times, i.e. once a month. The music manager should provide you with receipts for expenses. Include a caveat in the contract saying expenses above a certain amount must be cleared with you first.  Words of Caution  Music manager contracts can be very specific to your circumstances, and so the advice above is a guide and does not represent not hard and fast rules. The best thing you can do is be as clear and specific as possible, anticipating every bump in the road. If you're a small band, and your manager is going to grow with you, be sure to re-examine your agreement often to make sure it is still fair to everyone. If you already have a record deal in place and have a new manager coming on board, you should seek legal advice to make sure your interests are protected.  the term, or time frame, of the agreement,  the services to, and/or responsibilities of, each of the parties,  compensation to each party, and payment of expenses, and  the authority of the manager.
  3. 3. Management Contract Checklist  Management Agreement Checklist  This is a checklist of key deal points and issues in an artist management agreement. It is not exhaustive. It is not a substitute for legal advice. Every deal is different in some way. Almost all deals can be improved by professional analysis and negotiation. Management agreements are onerous and far–reaching agreements. You should get competent and specialised legal advice on the subject matter and terms of the agreement before you sign anything. However, this checklist sets out the issues you should be on the look–out for.  1 Manager Details Company or individual? (If company, can artist terminate if key individual moves on?)  2 Artist(s) Details Contracted as group or as individuals (or both)  3 Territory Australia, Australasia, World?  4 Term a. Initial period (*up to 3–4 years. Probation period?) b. Options to extend (and if so, at manager’s option or by agreement?):  i. Number ii. Length iii. Performance triggers (*Record deal? Publishing deal? Income turnover figure?)  5 Management Outside “Home” Territory? a. Who selects (requires artist consultation or approval?) b. Who pays (manager normally pays, out of commission)  6 Remuneration a. Commission percentage (*10–20%) b. On what? Are the following excluded?  i. Recording & Video costs ii. Live performance costs (agents, supports, sound and lights? Accommodation, trucking etc?) iii. Merchandising costs iv. Other  7 Services Of Manager a. Exclusive manager?  b. Role c. Powers d. Restrictions  i. What types of deal require artist’s personal signature?  ii. How much of the artist’s money can manager spend at any one time? e. Reporting of actions/activities  8 Arrangements For Banking And Accounting a. Bank account  b. Signatories/Authorised Operators c. Accountant d. Who keeps books & where? Business management (manager or outside book–keeper)? e. Right to Audit  9 Remuneration Upon Termination Sources of income:  i. Recordings (released during Term or within period following) ii. Publishing (songs released during Term or within period following) iii. Live work (gigs booked during Terms, occurring after term) v. Other  10 Post–Termination Commission a. Period (2–5 years) (other than where terminated for manager’s breach) b. Percentages (decreasing each year)  11 If Working In NSW, Is The Manager Licensed Under Nsw’s Entertainment Industry Act 1989?
  4. 4. Payment  Managers are generally paid a percentage of the band's income: pften 15% to 20%. In addition to their percentage, managers should not have to cover any expenses out of their own pocket.  There are some things a manager should NOT get a cut of. These including songwriting royalties - in my opinion. You should be aware that there are many different kinds of management deals out there, and the changing face of the music industry has meant a change in management deals. Essentially, the way musicians make their money is in flux, and since the income of the musicians is directly tied to the income of the managers, managers need to make sure they are able to tap into the new sources of money.  Any deal between musicians and managers should be negotiated up front and revisited when significant events occur that could drastically increase or decrease the band's income.
  5. 5. Band Management Contract Template