Managers, Managers, Managers...So, you’ve played a few gigs, have some ever-loving fans, and may have your own web site! Cool. You can see a future in your music, and have started to think about getting a manager.
Who would be best suited, and how do you set up the management relationship? And what should it involve - exactly what does a manager do for you? Apart from tell you that you rock! Getting one of your friends involved is one option, or you might want to hire someone with suitable band or management skills. How do you get the right person, and how do you get the relationship right?
Check out the “Managing” page of the “
WAM Guff - The Notes” section for more info on some of these issues. Then read on...
Essentially, a manager acts on your behalf in promoting, booking and securing work or deals for you, in return for a commission and reimbursement of some expenses. Some managers will simply book gigs and others might do a lot more, like getting involved in your creative decisions, or try to get you a digital distribution deal throughout Europe!
Note: these pages are written from a band or artists’ perspective, not a manager’s. Sorry, guys. Try the IMMF for some help, eh?
Choosing a ManagerIf you’re serious about things in this increasingly competitive music industry, it is important to look at the skills of a potential manager in a number of areas, just like you might for any “professional” you are going to engage and pay for the time, services - and skills.
Your pals may have plenty of enthusiasm, but consider the aspects a manager should have, like:
- Qualifications - do they have qualifications in business, accounting or management?
- Experience - are they handling bands already or have experience in managerial roles?
- Time - can they commit sufficient time to the band in addition to other commitments?
- Contacts - do they have contacts in the industry, both across Australia and overseas?
- Results - if they are established, have their existing bands done well and been happy?
Depending on your plans (and the contract), you want to make sure you get the right person!
Management ContractOnce you’ve done your research, asked around and found someone you like and think will work well with you and your ambitions, and seems capable to get you results, how should you go about creating or formalising the "management" relationship?
It is best to have a
written management contract that clearly sets out the rights and obligations of both the band and the manager. You will be entering into a close working relationship, so to reduce the potential for misunderstandings, disputes or problems down the track, the various aspects of your relationship should be clearly defined. See the “
Contracts Generally” section for more info.
A management agreement is, in essence, your manager’s agreement to provide services to you in return for a commission and repayment of expenses. There are several key areas for you to consider, and there is no such thing as a “standard contract”, although of course some things are commonly agreed in the industry. But you don't need to follow that, it is always negotiable!
TermThe term of a management agreement is usually structured so there is an initial period of 1 to 2 years (but can be up to 3 or even 5 in some cases), followed by various options to extend, often at the discretion of the manager. Stick with a period of time you are happy with (including shorter periods until you get going and know its working well) and, ideally, retain approval to any extensions.
It's a balance though for the "term" - a short term might not give your manager enough incentive. Too long might just really suck.
In any case, there should be a termination clause. This should allow you to terminate if your manager is not performing his or her obligations under the contract, perhaps within a reasonable time to fix things first. You can also include other grounds or reasons to terminate such as if your manager goes bankrupt. If your manager is inexperienced, or you’d like to see how things work out, you may consider including a “trial period”, where either of you can terminate immediately (by written notice) in, say, the first 3 months.
TerritoryThe “territory” referred to in a management contract is the area your manager must cover, and if it's an exclusive deal (described below), it is the area he or she has
exclusivity as your manager. It can often be a good idea to start with local territory first (WA or Australia, or NZ too eh bro?), or only have the manager represent you where he or she has business contacts or experience.
It’s also a balance as well - a larger territory may provide an incentive, but may also stop you getting a separate manager who is experienced or connected in a different part of the world. Managers prefer "world", but perhaps they need to earn it or be worth it?
It’s common to allow a manager to appoint a “co-manager” to represent you overseas (or interstate). A co-manager’s appointment should really be subject to your prior approval. Any co-manager will usually split the total commission, according to the work done outside the main manager’s areas, which means you are not paying the commission twice (but do get access to the work of both).
ExclusivityMost management agreements will state the manager has been appointed as “exclusive” manager, meaning that you can’t appoint or use any other manager in the “territory” during the "term". If you want a new manager, you’ll need to either terminate the contract, get your manager to agree to step down, or pay your manager out of the contract! Hence, the term (and termination) is important.
Even with exclusivity over you, contracts often allow a manager to look after other performers as well as you. Whilst this is more or less common, consider including a clause that requires your manager not to devote too much time to other artists as to jeopardise your interests or career, and when you do your “manager research”, try to work out if they might already be overcommitted. You could also add into your agreement that your manager must consult with you before taking on any other bands, if it may conflict.
Your Manager’s Powers and AuthorityYou should think very carefully about the scope of “powers” and authority you wish to give your manager - i.e. what they can do on your behalf. In essence, this is what you engage the manager to do for you - in being "your manager", what exactly can he/she do?
It is important to limit what you authorise or empower your manager to do in the contract, so that, for example, you have to give your approval before your manager locks you into a legally binding contract or touring commitments. You should also consider whether the manager's power or authority apply throughout the music industry only, or right throughout the broader “entertainment” industry. There is a lot of detail to consider here, and that's where it can be worth getting advice, or looking at some of the "checklists" below.
If the manager wants to appoint a ‘personal manager’ to help look after you or a ‘business manager’ to deal with all financial matters, including where those additional areas are outside the powers your manager has, that appointment should require your consent.
Manager’s Obligations or DutiesThe way a manager’s obligations are expressed in a contract is important for two reasons. First, it makes it clear what is or isn’t expected of them. Second, depending on the termination clause, your ability to terminate may depend on your manager specifically breaching the stated obligations. If the obligations are vague or ambiguous, you may not be able to enforce any “non-performance”.
A manager should be required to use “best endeavours” to do the core things like promoting the band and developing the band or artist’s career, getting contracts with labels or publishers, booking gigs, overseeing sponsorship and merchandise and even co-coordinating videos and websites etc. At the least, the requirement can be “reasonable endeavours (or efforts)” but that is 'lesser'.
The specific obligations or duties should be clearly set out in the contract relating to all the things you are expecting your manager to do. Depending on your manager’s qualifications, if you would prefer to appoint a separate person to fulfil specific obligations, such as an accountant to deal with financial matters and keeping track of income / expenses, then this would also be worth setting-out. Again, there is a fair bit of 'detail' to consider in terms of these obligations, so consider getting some advice or reviewing a checklist.
Artist’s ObligationsYour obligations in a management contract are generally minimal: to co-operate and do things your manager arranges, including publicity, performances, tours etc, provided it is reasonable for you to do so, and where reasonable notice has been given to you.
Your main obligations will be those relating to paying the manager a commission (and reimbursing expenses) and the 'exclusivity'.
The management contract should also not prevent band members to pursue other employment outside the band - if they wish to!
Commissions and Payments
This is always a hot topic! Commission rates are generally 10-20% of the gross earnings of the band or artist. Certain sums such as advances from record companies for recording costs, or booking agent commissions, can be excluded from this "gross" when calculating the manager’s commission, so the % is really of a "net earnings". Its super-important to be clear on what is excluded, otherwise you may be paying your manager a % on sums that you don't actually ever receive or which get 'soaked up' via costs.
The percentage you agree with your manager is really up to you - remember, it's an incentive for the manager! Equally as important as the percentage is the amount from which it is calculated on ("gross" or "net", as set out above). Think about it... 10% of anything you earn (including before certain costs are deducted) could be MUCH higher than 20% of gross income from live or CD sales only.
Again, this can be a complex area and is worth paying due attention to - consider getting advice on how to work this part of the deal.
It is not uncommon for a manager to be paid decreasing rates of commission for several years after the contract ends (say 1 to 3), to acknowledge the work they put in during the contract but for which the income is either not yet earned, or is all based on the hard yards they put in early on. Your call... It doesn’t have to be included, and again, the time periods and the percentages are negotiable.
A manager may also be reimbursed for expenses incurred on behalf of the band (but not their own office or administrative expenses - that’s what their commission is supposed to cover!). These expenses should require the band’s prior approval, especially above a minimum level, and be clearly set out in the contract. The way they're reimbursed is also important - does the manager just deduct them when they take their commission? This relates to the other "money" issue - who will operate the bank accounts and pay and receive income? The person who does do this will of course have a great deal of control over the finances, so think this through too.
Dispute ResolutionFrom time to time, issues such as performance commitments or finances can come to a head between band and manager. It’s a good idea to have a mechanism in your contract that allows each of you to resolve the problem before it ends up in court! Mediation services, such as
those offered by the Arts Law Centre (see Arts Law's mediation info sheet) are a good mechanism to use, and much simpler than court cases.
Managers in NSWEven though these pages deal with Western Australia, if you are entering into a management agreement with a manager who is based in NSW, certain aspects such as commission rates and managing artist finances are regulated by the
Entertainment Industry Act 1989 (NSW). If this applies to you, speak to your lawyer to check whether your management agreement conforms to that Act.
Other, and in summary...A clause preventing a manager from assigning the contract (i.e. the manager’s role as exclusive manager of the band) to anyone else is definitely worth considering, so you don’t end up stuck with someone you don't know! Ditto with the manager being able to "sub-contract" management to someone else they employ - this should require your approval, or ensure the manager 'oversees'.
There is a lot to a management contract, and the information above is only an overview of some of the main areas - as the saying goes, “the devil is in the detail”. It is definitely best to get legal advice on a management contract, or have one drawn up properly.
Further InformationGood info on managers from a practical viewpoint is available on the “Managing” page of WAM GUFF’s “
The Notes”.
The
Arts Law Centre of Australia has several resources on band management, and on mediation (as above):
Managers, Managers, Managers...So, you’ve played a few gigs, have some ever-loving fans, and may have your own web site! Cool. You can see a future in your music, and have started to think about getting a manager.
Who would be best suited, and how do you set up the management relationship? And what should it involve - exactly what does a manager do for you? Apart from tell you that you rock! Getting one of your friends involved is one option, or you might want to hire someone with suitable band or management skills. How do you get the right person, and how do you get the relationship right?
Check out the “Managing” page of the “
WAM Guff - The Notes” section for more info on some of these issues. Then read on...
Essentially, a manager acts on your behalf in promoting, booking and securing work or deals for you, in return for a commission and reimbursement of some expenses. Some managers will simply book gigs and others might do a lot more, like getting involved in your creative decisions, or try to get you a digital distribution deal throughout Europe!
Note: these pages are written from a band or artists’ perspective, not a manager’s. Sorry, guys. Try the IMMF for some help, eh?
Choosing a ManagerIf you’re serious about things in this increasingly competitive music industry, it is important to look at the skills of a potential manager in a number of areas, just like you might for any “professional” you are going to engage and pay for the time, services - and skills.
Your pals may have plenty of enthusiasm, but consider the aspects a manager should have, like:
- Qualifications - do they have qualifications in business, accounting or management?
- Experience - are they handling bands already or have experience in managerial roles?
- Time - can they commit sufficient time to the band in addition to other commitments?
- Contacts - do they have contacts in the industry, both across Australia and overseas?
- Results - if they are established, have their existing bands done well and been happy?
Depending on your plans (and the contract), you want to make sure you get the right person!
Management ContractOnce you’ve done your research, asked around and found someone you like and think will work well with you and your ambitions, and seems capable to get you results, how should you go about creating or formalising the "management" relationship?
It is best to have a
written management contract that clearly sets out the rights and obligations of both the band and the manager. You will be entering into a close working relationship, so to reduce the potential for misunderstandings, disputes or problems down the track, the various aspects of your relationship should be clearly defined. See the “
Contracts Generally” section for more info.
A management agreement is, in essence, your manager’s agreement to provide services to you in return for a commission and repayment of expenses. There are several key areas for you to consider, and there is no such thing as a “standard contract”, although of course some things are commonly agreed in the industry. But you don't need to follow that, it is always negotiable!
TermThe term of a management agreement is usually structured so there is an initial period of 1 to 2 years (but can be up to 3 or even 5 in some cases), followed by various options to extend, often at the discretion of the manager. Stick with a period of time you are happy with (including shorter periods until you get going and know its working well) and, ideally, retain approval to any extensions.
It's a balance though for the "term" - a short term might not give your manager enough incentive. Too long might just really suck.
In any case, there should be a termination clause. This should allow you to terminate if your manager is not performing his or her obligations under the contract, perhaps within a reasonable time to fix things first. You can also include other grounds or reasons to terminate such as if your manager goes bankrupt. If your manager is inexperienced, or you’d like to see how things work out, you may consider including a “trial period”, where either of you can terminate immediately (by written notice) in, say, the first 3 months.
TerritoryThe “territory” referred to in a management contract is the area your manager must cover, and if it's an exclusive deal (described below), it is the area he or she has
exclusivity as your manager. It can often be a good idea to start with local territory first (WA or Australia, or NZ too eh bro?), or only have the manager represent you where he or she has business contacts or experience.
It’s also a balance as well - a larger territory may provide an incentive, but may also stop you getting a separate manager who is experienced or connected in a different part of the world. Managers prefer "world", but perhaps they need to earn it or be worth it?
It’s common to allow a manager to appoint a “co-manager” to represent you overseas (or interstate). A co-manager’s appointment should really be subject to your prior approval. Any co-manager will usually split the total commission, according to the work done outside the main manager’s areas, which means you are not paying the commission twice (but do get access to the work of both).
ExclusivityMost management agreements will state the manager has been appointed as “exclusive” manager, meaning that you can’t appoint or use any other manager in the “territory” during the "term". If you want a new manager, you’ll need to either terminate the contract, get your manager to agree to step down, or pay your manager out of the contract! Hence, the term (and termination) is important.
Even with exclusivity over you, contracts often allow a manager to look after other performers as well as you. Whilst this is more or less common, consider including a clause that requires your manager not to devote too much time to other artists as to jeopardise your interests or career, and when you do your “manager research”, try to work out if they might already be overcommitted. You could also add into your agreement that your manager must consult with you before taking on any other bands, if it may conflict.
Your Manager’s Powers and AuthorityYou should think very carefully about the scope of “powers” and authority you wish to give your manager - i.e. what they can do on your behalf. In essence, this is what you engage the manager to do for you - in being "your manager", what exactly can he/she do?
It is important to limit what you authorise or empower your manager to do in the contract, so that, for example, you have to give your approval before your manager locks you into a legally binding contract or touring commitments. You should also consider whether the manager's power or authority apply throughout the music industry only, or right throughout the broader “entertainment” industry. There is a lot of detail to consider here, and that's where it can be worth getting advice, or looking at some of the "checklists" below.
If the manager wants to appoint a ‘personal manager’ to help look after you or a ‘business manager’ to deal with all financial matters, including where those additional areas are outside the powers your manager has, that appointment should require your consent.
Manager’s Obligations or DutiesThe way a manager’s obligations are expressed in a contract is important for two reasons. First, it makes it clear what is or isn’t expected of them. Second, depending on the termination clause, your ability to terminate may depend on your manager specifically breaching the stated obligations. If the obligations are vague or ambiguous, you may not be able to enforce any “non-performance”.
A manager should be required to use “best endeavours” to do the core things like promoting the band and developing the band or artist’s career, getting contracts with labels or publishers, booking gigs, overseeing sponsorship and merchandise and even co-coordinating videos and websites etc. At the least, the requirement can be “reasonable endeavours (or efforts)” but that is 'lesser'.
The specific obligations or duties should be clearly set out in the contract relating to all the things you are expecting your manager to do. Depending on your manager’s qualifications, if you would prefer to appoint a separate person to fulfil specific obligations, such as an accountant to deal with financial matters and keeping track of income / expenses, then this would also be worth setting-out. Again, there is a fair bit of 'detail' to consider in terms of these obligations, so consider getting some advice or reviewing a checklist.
Artist’s ObligationsYour obligations in a management contract are generally minimal: to co-operate and do things your manager arranges, including publicity, performances, tours etc, provided it is reasonable for you to do so, and where reasonable notice has been given to you.
Your main obligations will be those relating to paying the manager a commission (and reimbursing expenses) and the 'exclusivity'.
The management contract should also not prevent band members to pursue other employment outside the band - if they wish to!
Commissions and Payments
This is always a hot topic! Commission rates are generally 10-20% of the gross earnings of the band or artist. Certain sums such as advances from record companies for recording costs, or booking agent commissions, can be excluded from this "gross" when calculating the manager’s commission, so the % is really of a "net earnings". Its super-important to be clear on what is excluded, otherwise you may be paying your manager a % on sums that you don't actually ever receive or which get 'soaked up' via costs.
The percentage you agree with your manager is really up to you - remember, it's an incentive for the manager! Equally as important as the percentage is the amount from which it is calculated on ("gross" or "net", as set out above). Think about it... 10% of anything you earn (including before certain costs are deducted) could be MUCH higher than 20% of gross income from live or CD sales only.
Again, this can be a complex area and is worth paying due attention to - consider getting advice on how to work this part of the deal.
It is not uncommon for a manager to be paid decreasing rates of commission for several years after the contract ends (say 1 to 3), to acknowledge the work they put in during the contract but for which the income is either not yet earned, or is all based on the hard yards they put in early on. Your call... It doesn’t have to be included, and again, the time periods and the percentages are negotiable.
A manager may also be reimbursed for expenses incurred on behalf of the band (but not their own office or administrative expenses - that’s what their commission is supposed to cover!). These expenses should require the band’s prior approval, especially above a minimum level, and be clearly set out in the contract. The way they're reimbursed is also important - does the manager just deduct them when they take their commission? This relates to the other "money" issue - who will operate the bank accounts and pay and receive income? The person who does do this will of course have a great deal of control over the finances, so think this through too.
Dispute ResolutionFrom time to time, issues such as performance commitments or finances can come to a head between band and manager. It’s a good idea to have a mechanism in your contract that allows each of you to resolve the problem before it ends up in court! Mediation services, such as
those offered by the Arts Law Centre (see Arts Law's mediation info sheet) are a good mechanism to use, and much simpler than court cases.
Managers in NSWEven though these pages deal with Western Australia, if you are entering into a management agreement with a manager who is based in NSW, certain aspects such as commission rates and managing artist finances are regulated by the
Entertainment Industry Act 1989 (NSW). If this applies to you, speak to your lawyer to check whether your management agreement conforms to that Act.
Other, and in summary...A clause preventing a manager from assigning the contract (i.e. the manager’s role as exclusive manager of the band) to anyone else is definitely worth considering, so you don’t end up stuck with someone you don't know! Ditto with the manager being able to "sub-contract" management to someone else they employ - this should require your approval, or ensure the manager 'oversees'.
There is a lot to a management contract, and the information above is only an overview of some of the main areas - as the saying goes, “the devil is in the detail”. It is definitely best to get legal advice on a management contract, or have one drawn up properly.
Further InformationGood info on managers from a practical viewpoint is available on the “Managing” page of WAM GUFF’s “
The Notes”.
The
Arts Law Centre of Australia has several resources on band management, and on mediation (as above):