Key Terms in Artist Management Agreements

One of the most important business relationships in the music industry is that of the artist and his manager. The manager is in charge of developing, promoting and advising the artist’s career using its industry connections and advising the artist on every move, sometimes not only related to the music career. 

One of the first contracts the artist is presented at the beginning of its career is the management agreement. Although some of music’s biggest stars have “handshake deals” with their managers a written agreement between the artist and its manager will secure the parties’ rights with respect to each other. 

Term 

The duration of the agreement is usually set to a specific number of years. In some cases, the agreement is based on a number of albums. In addition, there can be options that will extend the terms exercised by one party or mutually. Lastly, there can be several thresholds that determine the term of the agreement. For example, if the Artist does not achieve specific goals (i.e. recording agreement with a major label) within a certain amount of time the agreement can end. 

Manager’s Commission

The manager’s commission is paid based on a percentage of the artist’s earnings throughout the entertainment industry. However, certain monies are excluded from the commissions as the artist does not retain the amount. 

Expenses and reimbursements 

Typically, the manager will incur in certain expenses on behalf of the artist up to a certain amount of money without authorization from the Artist subject to reimbursement. However, the artist needs to approve any amounts that exceed 

Manager’s Authority 

The manager will have the authority to commit certain acts on behalf of the artist so long as they pre-approved by the artist within the agreement. For example, the manager shall have the right to approve publicity materials that use the artist’s name image and likeness. Other acts may require the artist’s written approval before the manager can act on behalf of the artist. 

Accounting 

The management agreement needs to address who will be keeping the books and records of the Artist’s earnings and who will be receiving payments from the Artist’s endeavors in the industry. If the manager receives the payments then he will take his commission and reimbursements and then remit payment to the Artist. 

Exclusivity

It is common for a manager to have several artists to whom that he provides the services. However, the artist will have only one manager.