Q & A
Each month, MusicBizAdvice.com answers your questions about the music industry.
Management
Contract contents (a few basics)
Q. What should be in a management contract?
Thanks,
Lauren
A.
Artist
management contracts--also known as management agreements, personal
management contacts, or personal management agreements--vary tremendously
due to the many different types of management deals that exist in today’s
music industry, so specific deal points would be too extensive to get into
here. Regardless of the type of deal, there are some basic elements that
should be in any management agreement. Keeping in mind that I’m not an
entertainment attorney and that you should definitely consult with one, some
of the basic elements every management agreement should contain are:
1. Length of term,
including options, the date the contract goes into effect, how much notice
is required to pick up the option or terminate the contract, and the
procedure for doing so (“in writing”).
2. Who the artist's manager is (as opposed to just the name of the
management company) and what happens if that person leaves the management
company, as well as what happens in the event of incapacitation or death of
the manager during the term of the contract.
3. How much the manager is to be paid (the commission rate or if the
manager is on retainer, the dollar amount), how often, from what sources of
the artist’s income, and for how long after the manager ceases to work with
the artist. If the manager is waiving fees until the artist gets a deal, the
repayment schedule and dollar amount should be included, as well as what
expenses are recoupable.
4. What expenses the artist is responsible for, a dollar limit at
which the manager must get approval from artist (if the artist tours, to get
things done it’s impractical for the manager not to have approval up to a
certain dollar amount), the manner in which the expenses are to be paid the
manager, the frequency and manner expense statements are to be submitted to
the artist ("submitted to Artist in writing on the 1st of each month"), and
what expenses the manager is responsible for.
5. A mutual indemnification clause. This is essentially a statement
that neither of you will do anything to cause harm to the reputation of the
other, cause that person to be sued, etc. An example of the wording would be
something like:
"Indemnification: XYZ Artist Management, Mr. XYZ, their affiliated companies
and/or organizations shall not be held liable for any actions or statements
by Artist in the course of the fulfillment of this agreement. Artist further
agrees not to take actions that could bring potential legal action or harm
to the image or reputation of XYZ Management, Mr. XYZ, and their affiliated
companies and organizations.”
6. Limited Power of Attorney for the manager. This is a statement
that allows the manager to sign contracts and agreements on the artist’s
behalf when the artist is not available and is often a necessity to get
things done when the artist is on tour or in the studio. The clause should
give limited power of attorney only; you don’t want a power of attorney
clause that gives your manager control of all your personal finances.
7. A travel accommodations clause which states that the manager not
have better accommodations than the artist and names a dollar limit for the
manager's daily travel accommodations for local, domestic, and foreign
travel. The local travel clause should state something to the effect
of "no overnight accommodations within a ____mile radius of ____(the city
where your manager is located)." Don't forget to state who pays the
manager's travel expenses.
There will be much, much more. Even a simple management agreement can run
more than 10 pages. A few things to look out for:
“in perpetuity” You usually don’t want to see this. It means forever and
ever.
Anything more than a limited power of attorney.
No key-man clause (see #2 above).
Anything you don’t understand. Have your attorney explain it to you
thoroughly in laymen’s terms until you get it.
Consult an entertainment attorney (your own, not the manager’s; you each
need an entertainment attorney) for specifics. Have your attorney explain
the confusing parts to you in laymen’s terms, and make sure you understand
what you’re signing.
One final note: because it’s sometimes so easy due to the colorful
personalities involved, the media have made caricatures out of managers, and
they’re usually portrayed in a very bad light. Don’t fall for that cliché.
The good ones are boring, so you never hear about them, and contrary to
popular belief, there are even some great ones who are loved by their
clients (although the industry climate of the past fifteen years has bred
fewer of them). Artists who take time to learn about the business, as you
are, attract a lot more of the good ones.
Good luck!
Randi Reed
Editor-in-Chief / Founder
MusicBizAdvice.com
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