Thursday, July 22

Make or Break Management

The Contract That Will Change Your Career

The Contract That Will Change Your Career
By: Adam Barnosky
July 2010

"EVERYTIME YOU TALK TO ME, you're ten percent smarter than you were before, so I just add that ten percent on to what all the dummies charge for nothing." -Albert Grossman, the legendary 1960s rock manager, explaining why his commission rate was ten percentage points above the industry standard of fifteen percent. In 1961, Bob Dylan was unknown, living in a tiny apartment in New York City, scraping his way into the packed open mics of Greenwich Village. Just two years later, Dylan was touring internationally in support of his third album. The business success behind his career was in the hands of one man: Albert Grossman. Grossman was, by all accounts, a quintessential talent manager: brash, sharp tongued and impeccably dressed, in fervent pursuit of his two most prized passions - money and the success of his clients. In other words, Grossman was everything you'd want in a manager. He may have been expensive, but he was worth every penny.

A manager can make or break your career. There are both practical and legal considerations to keep in mind when determining whether the time is right for management. Two of the practical considerations are (1) finding a manager and (2) finding the right manager. Regarding the former, large management companies actively pursue artists for their roster and rarely accept unsolicited material. However, artists can find management from a variety of other sources. While many managers have tested track records, some transition into the field from other avenues. The White Stripes (Ian Montone, former music attorney) and The Strokes (Ryan Gentles, former venue booking agent) found management from alternative sources. Search the connections you already have and keep a keen eye on those who might provide proper guidance.

The manager that could change your career trajectory could be right under your nose. Regarding the latter, the right manager has to be someone you can trust. While this seems to be common sense, the music world is filled with stories of swindlers and thieves who prey on the faith of their talent (see Lou Pearlman and Allen Klein, prominent rock managers fired by their artists for unsavory - and costly - business practices). After you've decided on a manager (or have been pursued by one), here are a few legal stipulations to keep in mind. While there are dozens of provisions within a properly drafted management agreement, below are some of the more significant terms to consider.

1. Term: Your agreement needs to be long enough for management to achieve its initial goals (a year or more for new artists). However, be wary of terms that are indefinite or bound you to a manager for several years without an exit strategy. The agreement should be mutually beneficial: if management is advancing your career, it should be rewarded and the relationship should continue. However, if management is not performing what is required, there should be a framework set for terminating services within a reasonable timetable.

2. Commission: The industry standard for music managers is usually fifteen percent. This number reflects the gross (not net) of proceeds, which means your manager can take home a hefty paycheck, especially in comparison to any individual band member. A manager's reputation and past successes can reflect his or her take. In essence, a great manager is worth a higher percentage, at least initially, based upon the power of his or her phonebook and clout within the market (see Albert Grossman, above).

3. Sunset Clause: This clause is one of the most important in your management contract and deals with what percentage your former manager will be paid subsequent to his or her representation. Essentially, a manager will be paid for a certain amount of years for the deals entered into under their management contract. Generally, the manager's commission lowers every year following the end of the contract. If your sunset clause is too generous, your gross income could be docked between thirty to forty percent before you see a dime (imagine paying alimony to several ex-spouses).

4. Number of Clients: Attorneys are bound by the Model Rules of Professional Conduct, which prohibit a lawyer from taking on more clients than he or she can handle. For better or worse, managers are not bound by ethical standards. To avoid being the neglected child, it may be wise to include a stipulation in your contract regarding the number of other clients the manager may sign while under your agreement (and to include a term stating that your manager will use "best efforts" in his or her representation).

DISCLAIMER: The information contained in this column is general legal information for educational purposes only. Any use or reliance on this column does not create or constitute an attorney-client relationship.

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1 comment:

  1. I know you didn't write this and found it on Performer Mag, but 15% is not the standard commission in the industry. For an up and coming local band, they should not give more than TEN percent and there should be NO SUNSET CLAUSES.

    At the local level, a manager has to want to invest as much time, sweat, blood and tears into the band as the members themselves. They won't be paid well and it's an arduous task. A manager's main job in the beginning is to find a label or place that can distribute the bands record and to find the band a good booking agency. Once they've done these things, they deserve 15-20%, otherwise they gotta work for it


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