MANAGEMENT AGREEMENTS:
A Look Beyond the Fine Print

By Ed Pierson

Sooner or later most musicians are faced with the possibility of signing a management agreement. Who the potential manager is and the terms of the proposed contract will dictate whether or not you should consider signing the deal. The following are some of the aspects I review with clients who are considering a management offer:

1. The experience and reputation of the manager. Anyone can call themselves a manager and there is no state commission that governs their behavior. Remember that managers as a class of business people run the gamut from the best of the best to the worst of the sleaze. A bad manager who has a terrible reputation in the business will not be doing you any favors shopping your demo to labels. In fact most A&R people will admit that sometime in their careers they have "passed" on a band they otherwise would have signed because they couldn't stand to deal with the manager. You have to ask yourself and the local and national music community: What has this manager done in the music business? Are they respected and reputable? Can I rely on them as my spokesperson to the label and the press?

Signing with that manager is like getting married, although hopefully you won't be sleeping with your manager, and you as an artist should get to know the person who is going to make you a star and oversee your career before you sign the deal.

2. How Long and How Much? The essential deal points of the management contract are (a) term and (b) amount of commission. The shorter the term the better for the artist. Most management deals run somewhere between a two and a seven year term. If I represent the artist, I want to see an "out" clause that will allow the contract to terminate after a short period of time if there has not been demonstrated performance such as the signing of a record deal or receipt of a certain amount of gross income by the artist.

Managers are usually paid on a percentage of gross income basis, known as a commission. The commission amount will vary depending upon how developed the band is and how experienced the manager, however most deals are based upon a commission of 15%, 20% or 25%. Sometimes the deal will exclude certain types of income (local gigs etc.) or provide for lower rates of commission for different types of income. Beware that some contracts will provide that the commission will be paid for the life of any deal entered into during the term. This would mean that if a five year record deal were entered into during a six month management contract, the band would have to pay the manager's commission on record advances and royalties for four and a half years after the end of the deal with the manager.

3. Power of Attorney. Most all management agreements provide that the manager may sign certain contracts and negotiable instruments (checks) on the band or artist's behalf. This should be limited so that the manager doesn't sign you to an endorsement, publishing or record deal that you don't want to enter into.

4. Other Agreements. Make sure that the manager doesn't also have a related publishing company and record label that he intends to sign you to. There is a potential conflict of interest in such a situation where the manager convinces you to give up the copyrights to your own songs for his company when this "advice" is not in your best interest.

In summary, be careful and go slowly when considering a manager. It may be very time consuming and expensive to try to get out of the management agreement that proves to be a mistake, and signing with the wrong manager could have detrimental effects on your career. Even when you are convinced you have found the right manager, realize that virtually all management agreements negotiated are revised. Thorough consideration of the above points before you sign will increase the likelihood of a successful relationship and music career.

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