Music Managers & Management Contracts: Things to watch out for!
Blog by McEntegart Legal under Artist Managers, Finance, Law & Music Business
For many artists and bands the first contract that they have to face is the management contract. The manager will have a lot of responsibility and possible control so it is vital to get the right person and the right agreement.
The manager may come from various backgrounds – he’s a friend of the band, works already in the music industry, is an entrepreneur from a different industry or just has heard about the band’s potential and swoops in.
A manager should have one of the following but ideally all:
a. Money – it can be expensive process getting the band known;
b. Experience – knowledge of how the industry works and how it is changing;
c. Contacts – he has to know the right people and be liked and/or respected;
d. Enthusiasm – if he doesn’t believe in you then how is he going to persuade others?
Things you should be checking out for in the Management Contract:
1. Make sure the management is not asking for upfront payments from you. That is a big, big no-no! These would be similar to vanity publishing deals but without the benefit of having a product. Stay well clear as they are simply trying to take money from you instead of making money for you.
2. Don’t take advice from the manager’s own lawyer – it will not be impartial and will ultimately benefit the manager. If the manager does not want you to see a lawyer then alarm bells should be going, not only because he sounds like he is trying to hide something but it also shows his business naivety. The reason George Michael was stuck in his “bad” deal with Sony was because he had not had independent legal representation from a lawyer experienced in music law before he signed that contract. If he had not had that advice he may have been able to walk away and get a better deal.
3. Check your manager’s commission. Standard is 20%. It should not be more than this without good reason. Brian Epstein charged the Beatles 25% but reasoned this was because he had been paying the band a wage for some time before signing the contract.
Make sure you know what the 20% is going to be of. Usually it says artist gross receipts. Things that the manager should never take a percentage of are:
a. Money to be used for recordings
b. Money for videos
c. Money to pay producers
d. Money for tour support
e. PR & marketing budgets.
4. Don’t be tied into a deal with a bad manager. Make sure that you have an initial period clause (maybe 12 months) in which the manager must reach certain goals to enable the contract to continue for a longer period. These goals may be:
a. Get the artist signed to an acceptable recording agreement
b. Get the artist an acceptable publishing deal
c. Get the band a significant tour support
d. An income of ₤… by the end of the 12 month period.
If any of these or maybe all of them are achieved the manager can then exercise his option to extend the contract by a longer period (often 3 years).
5. Check what commission is due to the manager after the contract has ended. These are known as sunset clauses. Make sure that they are only for a short period (maybe 3 -5 years) and that the percentages of commission reduce down each year AND that they only relate to work that the manager has contributed to. You don’t want the ex-manager getting paid for recording or songs created after he has split with you.
6. Don’t let the manager sign deals on your behalf. It may seem obvious but it has happened and the artist is left in a contract that he didn’t want and had no say in!
Times are changing! Today the music manager should not be out there just trying to secure a major deal but should be:
- Running the band’s record label
- Organising the Twitter, SoundCloud & Facebook
- Booking gigs & tours
- Creating & selling merchandise
- Organising marketing campaigns.
Francis McEntegart is a Barrister and experienced music industry lawyer at McEntegart Legal Ltd.
Tags
mcentegart legal, music law, music lawyer, music industry, music business, artist manager, band manager, management contract, band management agreement
