Management Companies: an Introduction
The issue of management is one that artists should not take lightly. Getting your choice of manager wrong could be devastating to you career. With this in mind, it’s important that you’re looking for management for the right reasons. Many managers we’ve spoken to say that artists approach them much too early out of sheer laziness. Why would anyone want to manage a lazy act? Its worth remembering that if you’ve put in the ground work - gigging, building a fan base and attracting local press - it's likely that management will come looking for you rather than the other way round.
Contracts
Standard management agreements simply don’t exist and, as with all contractual agreements, we recommend you take legal advice from a specialist entertainment lawyer before signing. The Musicians Union offers a legal/contract advice scheme and is well worth a look. Membership starts from as little as £54 per year (see industry organisations).
How your manager gets paid
Managers work on a commission basis. This is usually 20% of the artist’s net earnings but don’t be afraid to try and negotiate. Commission should not be taken on recording costs or tour and video support. You should make sure also your contract contains a right to audit clause. This is a vital part of any music industry contract that allows you to look at your manager's and/or record/publishing company’s accounts on a regular basis.
The Term
The length of contract varies. Many managers are willing to offer a short term to begin with, with options to extend the contract at the end of this initial period. This allows the manager time to assess whether the relationship is working. Some managers we spoke to are willing to make this bedding in term as short as six months, although a year seems to be more the norm. Where a manager seeks a longer term of agreement, we advise you request a Performance Clause be included in the contract. For example, should the manager not secure you an acceptable record/publishing within an agreed time limit you have the right to end the contract.
Where will you be managed?
The music industry refers to the market place as territories. For example, the UK and Europe are considered a territory, North America is a territory. In the case of management, most new artists will be offered a contract for worldwide representation; this is generally considered the norm. However, If your act is so hot that everyone wants a slice of the cake, you could be able to negotiate. You may feel that you want a manager dedicated to working North America, traditionally considered the most lucrative market. This said, it’s worth remembering that most managers are not keen on splitting their commission.
Monies
We recommend that wherever possible, all monies are paid to the artist’s accountant, who would then distribute any commission/expenses due to the manager. As with all industry contracts you must retain the Right to Audit. This allows parties the right to inspect each others accounts on a regular basis. Should you part company with your manager for any reason, he is still entitled to receive his commission from monies related to any recordings or copyrights published that took place during his term as your manager. Under no circumstances is he entitled to any commission on future works.
