WHAT YOU SHOULD LOOK OUT FOR IN YOUR MANAGEMENT CONTRACT.
After a tedious (or not) search, an artiste finally gets a manager who is expected to be trustworthy, efficient and diligent about the entertainment business of the artiste. However, there are grey areas the artiste needs to “sort out” in the contract before its execution.
The artiste needs to decide on the kind of activities the management contract shall cover. Will it cover everything the artiste does in the entertainment business or it’ll be restricted to activities in only music business.
An artiste might start out as a songwriter/performer and later transition into acting/modelling. The manager might just be very capable of handling all entertainment related activities or he may just be an expert in music business, with the know-how of the film and modeling industry. It would be calamitous to hand over all entertainment related business to the manager who is only skilled in music business. The manager might have reservations about this arrangement as he may think that it will be his expertise and skill in the music business that will open doors in other entertainment industries, and thus, should get a share in whatever income is received in those industries.
The issue of “activities covered” in the management contract would depend on the bargaining power of the parties and a fair compromise should be reached by both parties to prevent future discrepancies and fallouts.
The artiste needs to decide what countries/region/continent the contract will cover i.e the territory of the deal. The manager (obviously) would want to manage the artiste for the world. This might not necessarily be to get as much commission as possible (this is a major factor though) but to control the plan and all activities, which would not be easily done if the territory is restricted to a region or continent.
In deciding this, the artiste needs to determine if the manager is well abreast of the ins and outs of the music business in all or major parts of the world before consenting to a worldwide management.
Once a decision has been reached on the kind of activities the management contract shall cover and the territory it shall be effective, the parties would need to decide on the nature of the del. In most cases, the manager would want to be the sole and exclusive manager for all activities covered to control and oversee all projects. This is quite and practical and reasonable, as other managers (in a non-exclusive deal) might have clashing ideas and plans, which would only derail the advancement of the artiste’s business.
Term and Termination
The length of the contract is a key provision in a management agreement, the parties would need to decide on the initial term and the possibility of subsequent renewal terms. In fairness, the contract should be open-ended and carry on until a party decides not to continue. The parties may decide for a fixed period after which there shall be a renegotiation of the terms of the agreement.
In most cases, there is usually a fixed period, which can be extended unless a party decides not to exercise that option. For an artiste, the right to exercise the extension option should be linked to the manager fulfilling certain obligations or achieving something for the artiste.
Termination of the contract, just like the term is a key provision in a management agreement. It should be expressly stated, what actions or inactions would constitute a breach of the agreement, how can the breach be remedied, and the procedure(s) for termination.
Management Fee, Revenue Sharing, and Commissions
The contract needs to expressly state the management fee of the manager and the revenue sharing ratio of both parties. It also must list the kinds of incomes that can or will be shared by the artiste and manager. The form of sharing, be it gross or net. There is no standard form of revenue sharing or payment for services, the parties shall have to reach a middle ground on the form of payment. The status of the artiste pays a big part in this also, will there be a monthly salary structure? Or, percentage commissions off all revenues?
The artiste needs to also pay extra scrutiny all forms of commissions to be deducted by the manager on monies received for the artiste.
The contract must state the minimum amount of time the manager must expend on the artiste. The absence of this could lead to disaster. It is a major cause of friction between manager and artiste worldwide.
What happens if the manager manages other acts or is part of a management company that manages a number of people? How can the artiste make sure the manager is there when the need arises.
The artiste needs to ensure that the agreement between both parties says the manager has to spend a reasonable amount of time on a regular basis managing the artiste. The artiste could go further and specify what “reasonable amount of time” shall mean in this agreement, be it 3, 4 weeks or 2 months.
The contract must state the agreed mode of settling disputes when it arises. The parties could decide to meet over and resolve any dispute, but what if it fails? The other options available include Arbitration, Mediation, Negotiation and Litigation.