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Management Contracts

A management contract is likely to be one of the first that you will sign in your career in the music industry. More often than not you will be approached by a manager at a gig it is very tempting to just sign up with them there and then. However over the years there have been scores of high-profile cases between artists and their managers Gilbert O’sullivan, Joan Armatrading and Elton John are just three artists who have found themselves in disputes. It is therefore important that the manager you are working with is right for you, this is very much a personal decision based upon how you get along however you also need to consider the manager’s credentials. It is prudent to talk to other artists they have managed and any other contacts you may have in order to ascertain the manager’s experience and skill.

As for the contract itself the following are some of the main terms that you need to consider:

Territory

What countries will the manager represent you in; the manager may have experience in the UK but what about the US or other countries. You can either restrict the manager to certain countries or allow him to appoint a co-manager for other countries, although if this does happen it is important to ensure that the co-manager’s commission is taken from the manager otherwise you risk effectively paying twice. Of course from the manager’s point of view he will want to manage you across the world.

Activities

Basically does the contract cover just the music business or the entertainment industry as a whole. This is very much down to individual situations, if for example you are already acting on television or in films then why should the manager take any commission for this? However if you are just starting out in the entertainment industry as a whole then the manager will probably want to represent you for everything after all if he does a good job and your music is popular and this leads to an acting opportunity then it is fair that the manager gets commission on this. After all it is arguably his work that got you there..

Exclusivity

The manager will expect to be your exclusive manager (in the territory and for the activities you have agreed at least), practically there is no other alternative to this.

Term

This could be a fixed period, it could be open ended, however more often than not the deal will be between 3-5 years with options. These options will depend upon certain milestones being reached: getting a record deal, publishing deal etc. You may also come across a contract linked to an album cycle i.e. instead of having a term fixed by years it will be fixed by a number of albums.

Commission

The manager will be paid a commission you can expect this to be 20% (although anywhere between 10-25% may be justified depending on the circumstances). This 20% will be taken from your gross income i.e. literally what you take in but minus certain specified expenses. For example if you receive an advance of £100,000 to record an album and £20,000 of this is budgeted for the album costs then the manager would not (subject to the contract) take commission on this, the manager would only take commission on the remaining £80,000. In most contracts there will be a separate calculation for commission taken from live work.

Sunrise Commission

If the manager secures you a deal with a major label in say 2010 (album released in June 2010) but you part company in September 2010 it is only fair that the manager continues to take their commission on the royalties from the sales of this album. After all it was their hard work that got you the deal. However skip forward five years and you have a new manager, should the old manager still be taking commission on the old deals? Or should the new manager be taking commission (bearing in mind he did no work for the deals). In order to combat this problem the management contract should include ‘sunrise’ provisions for example: for the first 5 years after termination the manager will receive 20% commission on all deals signed during the term, for the next five years 15%, for the next five years 10% and for the next five years 5% after which he will receive nothing. Of course this is just an example and the actual amounts can be varied depending on the situation.

Expenses

What should the manager be allowed to claim back and what should he have to cover himself. All office expenses would be payable by the manager however certain items for example flights etc would be recoverable. You would however want to put in restrictions as to the amount the manager could expend without your prior approval.

Authority

Whilst the manager should be negotiating agreements on your behalf he should not be signing them, the only exception to this is for one-off agreements for example performing on Top of the Pops etc but even then you should have given your permission at least in outline.

At Lawdit we have a great deal of experience with management agreements. We can draft your contract for a fixed fee of £500.00 + VAT or if you have been given a contract by a manager (or by a band) and just need it looked over and amended then we can do this for a fixed fee of £250.00 +VAT.

You can contact us by phone on 02380 235979 or email: legal@lawditmusic.co.uk

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