Chapter 04

Earlier we discussed how to know when a manager is right for you and that one of the things you need to look it is how a potential manager handles contracts and financial agreements. The time will come to get down to the legal nitty gritty, so it’s best to make sure you have hired a lawyer so that you have someone in-the-know who can help you understand and address questions or concerns about the deal.

Let’s say you’ve made it to the point of finding a manager you know is a great fit for you, and you’re equipped with a lawyer to protect your rights; next it is time to be sure you know exactly what needs to be covered in your contract and what aspects are open for negotiations within your deal.

Here is a “must-know” checklist to understand before you sign on the dotted line:

– What is the purpose of a contract? Before a contract is drawn up, you need to understand why you need one in the first place. By putting an agreement into legal terms, it allows both the manager and the artist know they are protected; therefore, it establishes a mutual trust and confidence in one another that each party is working to their potential. The contract clearly states the responsibility level and duties that will be carried out by your manager. You must both know and agree upon what you are willing to have them do and what duties the manager is willing to do for the good of your career. The same goes for you as the artist; the contract allows it to be clearly stated what your responsibilities are that must be carried out, such as a particular length of time you are committed to this manager or management team, to the assurance you will continue to make music and show up for necessary appearances.

– Flat Fee vs. Percentage: How have you agreed to compensate your manager? Are they making a percentage of your total earnings, or are they accepting a flat rate based on their responsibilities. Be aware that standard practice is to opt for the percentage of earnings; it will keep your manager motivated to help you achieve success because for every dollar you make, they are making money as well. Most managers can make anywhere from 5%-30%, though the high and low ends of the spectrum are unreasonable and unfair toward both you and your potential music manager. Anyone willing to receive 5% might be desperate for clients and anyone looking to take in an astronomical 30% is screwing you. If your manager is comfortable with 15-20% you are both being fair and making a good deal.

– What “Power of Attorney” means: if you sign Power of Attorney over to your manager, it means he or she has complete and total control over every decision covered in your agreement and career over the life of the contract. However, it is common for managers to want to be able to sign agreements on your behalf; while you do not want to allow someone to have complete control over your life, it’s important you discuss and understand any discrepancies or concerns you’re experiencing with a lawyer.

– What constitutes a “Breach of Contract”: When there is a breach of contract it means that one party has failed to perform the obligations stated in the contract. When there is a fundamental breach, it means that something was astronomical enough to cause damage in some way; therefore, the other party can terminate the contract and sue for damages. For artists, both financial damages and personal damages can occur based on managers’ contractual breaches. If you suspect this is occurring, it is best to seek the guidance of your lawyer.

– The term of the agreement: How long is the life of the contract you are signing? Like we’ve mentioned previously, sometimes relationships between managers and artists don’t go smoothly; you need to have an end point where you can re-evaluate the direction of your career and the team of people who are behind you. Managers often push to have long standing contracts because it gives them more time to help you become successful and because it gives them a longer potential earning period. Music managers often push for a “pro-management” type of agreement; what this means is that you have a contract for a particular length of time, for example, three years. When the three years are up, it would be at the discretion of the manager only whether he would want to extend the contract. This is not an ideal situation for an artist because your hands are tied from moving in another direction if you think it would be best for your career prospects. This is an area where you will need to negotiate with your manager.

A more ideal agreement in length of term of the contract and partnership would be to have the extension of the agreement be based off of performance. Basically, if the manager meets certain well-established performance goals, then they can have control over extending the contract or not. In contrast, if the manager fails to meet the goals agreed upon, then you may move on and end your agreement. The types of things you can have be based upon performance goals are the amount of money you make each year, whether you’ve gotten recording or tour deals, whether you’re making a certain amount of appearances a week, etc. Discuss realistic terms during the negotiation period.

When it comes to a contract being discussed and drawn up it is essential that you read everything you put your signature on not only once but several times, though it is best to seek the seal of approval from a lawyer who can explain the legal jargon to you. The papers that your music manager slides across his desk as he’s talking to you about your future ARE your future. In business and law, words mean nothing unless they are written down, and once they are written down there is little to no room for interpretation. Don’t rush through a contract just for the instant gratification of signing with a manger or to please or impress them. Don’t trust him when the manager says everything is in the contract just as you discussed; you will be the judge of that. Take the time to go over everything in detail and address anything that makes you uncomfortable, you don’t understand, or needs to be revised. If the manager you plan to hire is annoyed or becomes agitated by you wanting to closely read the contract, it might be a good idea to hold off on the signing until you get some time with your lawyer to review the details.

In the case that you’ve found a manager who is understanding of your personal needs as an artist and also who understands and values this legally binding agreement between you, you’ll both have mutual trust in one another that you will carry out your obligations within your deal to the best of your abilities. Successful music manager and musician relationships are established by having a confidence in the other party that he or she will perform their duties that will lead toward mutual success. Once you’ve protected yourself within the structuring of your deal, it’s time to get to work; write, perform, and record music. Seek the guidance of your manager and work toward achieving new heights in the music industry and enjoy all that the music world has to offer.