Artist Management Contract Template

Being an artist you will have to look for these key points to be included in your contract or agreement before signing it. It goes as following:

• Term: It is standard for a management relationship to last between 3 and 4 years.  You won’t see anything shorter than this, but you may see longer.  The rationale is this: the management company will want to have the artist for as long as possible, because they need to brand and build that artist, which takes time, and because music may not start selling right away in year 1 or 2.

There may sometimes be an option on the front or back-end to extend the term if the manager achieves certain thresholds for the artist. For example, an initial 4 year term with an option for an additional 2 years, exercisable if the manager secures for the artist a major recording deal worth at least $50k and the artist generates gross receipts of at least $400k during the initial 4 year term.

If the artist wants to “test-drive” the manager, then it’s common to have a short initial term, e.g. 1 year, with an option for 3-4 years based on certain thresholds.

Pay very close attention to both the initial term, and the option term(s), you may be bound to this manager/company for a long, long time.

• Gross vs Net receipts: Gross Receipts’ typically means all revenues earned by or credited to the artist through any activity related to entertainment – movies, film, TV, songs, shows, appearances, and even commercials.  ‘Net Receipts’ refers to the “profits” earned by the artist, basically, ‘Gross Receipts’ minus applicable expenses.  Understand what is included in each category and how specifically they differ.

These terms need to be defined in a well-drafted agreement.  A manager is going to want their commission based on ‘Gross Receipts’ (because they want their percentage to come from a bigger pie).  The artist will want the manager’s commission to be based on Net Receipts.  Who gets what is largely a question of bargaining power; and, because it is difficult to negotiate for a manager’s commission to be based on Net Receipts, it’s more common to negotiate what is specifically included under Gross Receipts.

• Commission: Managers will look for a commission of between 15% and 20% during the term.  Again, this is largely a function of bargaining power.  As an artist, if you can make the case that you have heavy expenses, or that you’re already paying a booking agent and/or a past manager, try to knock this down to 15%.

• Sunset clause: What is the Sunset clause?

A sunset clause states that there is a finite amount of time after a contract end date, where the manager can be paid a commission. A sunset clause gives the manager the right to collect commission from any other contracts they secured for the artist during the initial contract term.

A sunset period can last around five years in general, and commission decreases with each year. Year one of a sunset clause may give 10% commission, year two gives 5%, and so on until the manager is no longer entitled to payments.

As an artist, pay very, very close attention to the sunset clause as there are many agreements where a sunset clause goes on “forever” at 5% commission.  Forever is a long time.  You should be able to knock this down to a certain number of years after the end of the Term. 

• Managers might not get you paid work: A well-drafted agreement will define the scope of the manager’s responsibilities.  It will probably say something like “The Manager shall advise and counsel Artist in all matters relating to Entertainment Activities, including, without limitation, in connection with phonographic records, songwriting and music publishing, personal appearances…”.

But, there will also be another clause which talks about how the manager is not an employment agent (or even a licensed artist’s manager), and that manager has no obligation to secure employment or engagements for the artist.  The contract will also include language such that the artist is responsible for paying any commissions to booking agents or other agencies. 

The point here is to be explicit in defining the manager’s role, including what specific activities they are responsible for, and those for which they are not responsible.

Another thing to take note of: when the management deal is drafted by a lawyer or an experienced management company, the devil will be in the details of the contract. It will never be in your favor prior to negotiation.

You don’t want to be legally and financially tied to a person or company that isn’t doing anything for you, or worse, is leading your career in the wrong direction.

What is the average commission for talent management? What percentage does an artist manager get?

Manager commissions generally vary based on the industry as well as the status of the artist and the reputation and experience of the manager.  They typically range between 10-20%.

Management contracts should clearly set forth when and how commissions are payable.

Commission entitlement should end at either:

• The end of the contract
• At the end of a sunset period