Just a piece of a contract I received today. Is it sound? 20 percent?
"(Manager) and (I) confirm this Management and Production Agreement to appoint (Manager) to represent (My name) as sole and exclusive management and Production Company under the provisions of this agreement as follows:
(Name of Manager) shall be entitled to charge for services, a commission of 20% of the gross income received by (ME) in respect and as result of efforts which fall within the scope of this agreement. (Management) shall over-see all matters concerning the budgets, musical direction, paper work and procedure specific to recording material for and by, in-whole or in-part."
20% isn't an unusual percentage for a commission in a manager's contract, but how long does the agreement last? There's often a minimum amount of work or results that the manager has to get the artist in the 1st 6 months or year or else the artist can terminate the agreement without obligation, and there is also often a "sunset clause" to limit how long and how much the manager can charge, so the artist can hire a new manager and have some % left to pay them if they want to fire the old one.
Also, do you understand that you're being asked to sign to a production agreement as well? That changes everything, including the ability of the manager/producer to find you work without violating the Talent Agency Act.
This a VERY important relationship to enter into, so you shouldn't sign ANYTHING you don't fully understand and agree with. It's worth your investment to pay a lawyer to review this agreement.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
Wow. typical management deals have a 15%-20% commission structure.
BUT, here, it sounds like the manager is also your "production company", which changes things considerably. At the very least, the manager should promise NOT to commission any earnings that are paid to you for projects where the production company is your employer or a partner/co-venturer with the employer.
You REALLY NEED TO HAVE A LAWYER HELP YOU WITH THIS. You're about to be taken advantage of.
Intellectual Property Law Attorney
Good answers so far. Conflict, conflict, conflict.
Management agreements are standardized in many respects, but there are lots of creative ways to make it more favorable to the artist in the long run, including the sunset provisions mentioned.
The dual hats/talent agent problem is a REALLY big one and you absolutely need to consult an attorney.
Disclaimer: This answer is given for discussion and informational purposes only - it does not constitute legal advice and no attorney-client relationship is formed. If you are in need of legal advice or assistance you should contact a professional in your area.
I am not particularly offended or concerned about the 20% commission in a Management Contract which appears to be on a Music Industry related Project. In itself, that does not raise a Red Flag. However, my experience has taught me that if you are feeling concerned about the contract terms, it may be that one of the other provisions is problematic and will cause you problems down the road. I therefore strongly concur with the other attorneys who have responded to your question that you will be making a very necessary and good investment of a little time and a little money if you have an attorney review and advise you about the entire contract - all of it's terms and provisions. I have handled many contract dispute cases, including at the appellate level, all because my client did not have the contract reviewed on the front end. Any entertainment litigator can tell you that the dollar and time cost of litigation, far far exceeds the time and dollar cost of a little preventive counseling up front. Good luck to you on this Project.