Expert Advice When You Need It Most
Considerations When Negotiating a Personal Management Agreement for Entertainment ClientsWritten by: Barry Neil Shrum Reputation Level 11
Posted about 3 years ago. 17 helpful votes, 0 comments
1
Make sure the compensation is fairPersonal managers in the music industry will most often charge a percentage of 15-25% of an artist's overall income, with some potential exceptions which are noted in the next point. Depending on the artist's negotiating strength, it may be possible - and it is certainly desirable - to establish a schedule of escalations within that range based upon the amount of income generated as a result of the personal manager's performance. In addition, It is not uncommon for a personal manager to request what is commonly referred to as a "sunset" provision, i.e. a clause that provides details as to a personal manager's post-term compensation, in other words, the money he is paid after the contract term expires. The post-term compensation is also frequently scaled and should be limited to compensation derived from contracts entered into during the term, not those negotiated and entered into afterward. 2
Exclusions from gross compensationWhile a personal manager's attorney will want the definition of "gross compensation" in the agreement to be as broad as possible, it is important that the artist's attorney limit application of the compensation to which the manager's percentage is applied. The general rule of thumb is that if an artist is compensated in some fashion that requires that compensation to be paid to a third party, it should be excluded from commission. For example, payments made to the artist for sound & light, tour support, production of videos, opening acts, etc. are generally excluded. Other potential areas of exclusion might be publishing income, or at the very least the publisher's share of performance royalties, and "package deals" involving other acts managed by the artist's personal manager. 3
Key Man ProvisionA personal manager's position in relation to the artist is somewhat akin to a parent. In other words, it is a position that is often times difficult to replace. For this reason, the artist will desire to have a "key man provision" in a personal management contract that will allow him to terminate the contract if the personal manager is no longer active in his day-to-day career. 4
Power of AttorneyA careful review of the power of attorney provision in a personal management contract is extremely important. This clause often gives the personal manager the right to make decisions and perform certain actions in the stead of the artists, such as hiring accountants, lawyers and other third parties, booking engagements, approving the use of the artists' images, and even signing and cashing the compensation checks. These clauses can often be limited in various ways, and even provide that a third party accountant handle income and disbursements. 5
TermMost management contracts start with a five year term, however, it is in the benefit of the artist to carve away at this time frame in any way possible, for example, having a 2 year initial + 3 one year options, basing the renewal of the subsequent periods on performance levels. This keeps the artist from being tied down to a personal manager who is not performing his job well. 6
Hire an entertainment attorney to review and revise the agreementThese are just a few of the many considerations that go into the review and analysis of an artist's personal management contract. If you are presented with such an arrangement, make sure to obtain the services of a qualified and reputable entertainment attorney to assist you. The role of a personal manager is extremely important to the development of an artist's career, and one that will have long term consequences. It is important to have the advice of competent counsel to guide you. Additional ResourcesRelated Questions3 Attorney answers: 
Asked by a user in Corona, CA - about 2 years ago. 2 Attorney answers: 
Asked by a user in Las Vegas, NV - 6 months ago. 2 Attorney answers:
Asked by a user in Nashville, TN - 6 months ago. Find Franchising LawyersRelated Searches |