108: MUSC All You Need To Know Chapter 3: Personal Managers Role Most important person in your professional life. A personal manager is the general manager and chief operating officer of your enterprise. The most important aspects of the manager's job are: 1. Helping you with major business decisions. a. Deciding which record company to sign with b. Whether to make a publishing deal. c. How much money to ask for. 2. Helping you with the creative process. a. Selecting a producer b. Deciding which songs to record c. Hiring band members d. Selecting photographers 3. Promoting your career by hyping you to everyone the manager meets, helping you coordinate a publicity campaign. 4. Assembling and heading your professional team by introducing you to lawyers, business mangers, and agents, and overseeing these people's work. 5. Coordinating your concert tours by working with your agent to make the best deals with promoters, routing the tour, working with your business manager to develop a budget, assembling your road crew, supervising the road and tour managers to make sure everything runs smoothly. 6. Pounding your record company to maximize the advertising and marketing campaigns for your records, making sure your records are treated as priorities, screaming at them when they do wrong, praising them when they do right. 7. Generally being a buffer between you and the outside world, such as fielding inquiries for commercial endorsements, personal appearances, charitable requests, taking the rap for tough decisions that you make but don't want anyone to think you did. Commission Overview Generally get between 15% and 20% of artist's gross earnings, with the majority getting 15%. If you're an individual artist, the fee is pretty much what it sounds like for songwriting, publishing, records, etc. With regards to touring, the artist is lucky to take home 40% to 50% of the gross income. If you're a group and you have more than five members, 15% of gross equals almost the same, or more than, any one of you earns (assuming you're dividing equally).
Negotiating the Manager's Deal Compensation Should try to limit the percentage to 15%, but some managers argue that the risk of taking on a new band is worth 20%. A compromise is a step-up or a step-down agreement. Sometimes managers share in the net of an artist's earnings rather than the gross. When a manager has a deal on the net, they will sometimes ask for limits on expenses. The agreement might be that the manager is paid on net touring proceeds, but that the expenses of the tour cannot exceed a negotiated percentage of the gross. A variation on this idea is that the manager gets a percentage of gross, but is capped at 50% of the net. The manager will never make more than the artist actually puts in his or her pocket. In a few situations, where the artist is a superstar, the manager sometimes gets 10% or less, and occasionally just a salary. The salaries will be in the 6 or 7 figure range. Exclusions It is sometimes possible to reduce or exclude certain types of earnings. For example, if the artist is already established in a particular field, their manager may get a reduced or no royalty for earnings from that field. In areas of excluded earnings, the manager would do no work. Money-Losing Tours Can sometimes get managers to agree that if a tour loses money, they will take no commission. If a manager will not agree to no commission, the artist should try to talk the manager down to at least a reduced commission. It might also be possible to defer their commission until the artist is more successful. Deductions Certain monies are customarily deducted before deducting the manager's percentage, even when a manager is paid on gross. No commission should be taken on: Recording costs
Monies paid to a producer Co-writers Tour support Costs of collection Sound and lights Opening acts Term Used to be three to five years, but now is in terms of album cycles. Album cycle: a period of time from the commencement of recording an album until the end of the promotional activities surrounding it. Many agreements have the stipulation that if the artist does not make a minimum amount of money, they can terminate the agreement early. Managers should also state that the earnings figure must include offers that the artist turns down. Offers should be similar to those the artist has previously accepted. Could also use album sales figures. Two ways of terminating the manager for failing to produce certain earnings: 1. a letter form the artist to the manager with legal words that mean "you're fired". A 2. shorter deal that continues if the artist achieves certain earnings. Earnings After the Term: "The Gift That Keeps on Taking" One of the most important points to negotiate is how much the manager gets paid after the end of the deal. Most management contracts state that the manager gets paid on earnings after the term that are generated under "contracts entered into or substantially negotiated during the term." 1. As to records made during the term of the management deal, the manager gets a commission from sales of these records occurring after the end of the management deal. 2. The manager is paid on records made after the term of your management deal, if the records are recorded under a contract signed during the term. Manager could be getting paid 7, 10, or more years after he is done rendering services. Major things to worry about are records and publishing. Sunset Clauses End the day for commissions. 1. Records
a. The manager gets paid only on records recorded and released during the term. b. The manager could get a half commission on records recorded during the term but released afterward. The theory is that the manager only does half the work--overseeing the recording, but not overseeing the release and promotion. 2. Publishing a. The manager is paid only on songs recorded and released during the term. b. The manager gets a half commission on songs recorded during the term and released after. c. The manager gets a half commission on songs written during the term but recorded afterward. 3. Final cutoff a. Some date after which all commission end. Three to five years after the term; no more than seven. b. Can sometimes reduce the commissions while waiting for the final cutoff. A problem is that the artist needs to hire a new manager, and none are really willing to work for free. However, many will be willing to not take commission on things brought about by the previous manager. Key Man A clause that says the person with whom the artist has a relationship (the key man) must personally act his manager, and if not, the artist can terminate the deal. Double Commissions Management contracts say that the manager's commission is based on the artist's earning at the corporate level when the artist has a corporation. This is good for the manager in that you cannot pay yourself a small salary out of the gross earnings and give him commissions based on that. The artist must be sure that the manager does not take commissions out of both the corporation AND the artist's personal salary. Most management contracts technically allow this, but the reputable managers will not. The artist should say the manager cannot do it just to be safe. Power of Attorney Do not give the manager the power of attorney. The power to act for you Sign your name to contracts Hire and fire your other representatives Cash your checks The Best Deals Many of the top managers have no written contracts with their artists.
Picking the Right Manager The best manager is a powerful, well-connected person, with one or more major clients, who is wildly enthusiastic about you and willing to commit the time required for your career. It takes as much or more work to establish a new artist as it does to service an established artist. Some good alternatives: 1. A major manager with a young associate who is genuinely enthusiastic about you. 2. A midsize manager who is wildly enthusiastic about you. 3. A major, powerful manager who is taking you on as a favor to somebody who is very important to him or her. 4. A young, inexperienced manager who is willing to kill for you. Have to make some kind of compromise. The reason a manager is powerful is because he or she has at least one powerful client who takes up most of the manager's time. How managers' careers go: 1. Young and enthusiastic, attaching himself to a promising young act. 2. Promotes the artist into major stardom, at which point every other manager comes to try to steal the act, and the manager is offered many other acts to manage. 3. Manager wants to cash in on the fame and fortune while it lasts, and, accordingly, starts hiring associates and begins taking on more and more superstars. 4. Many have huge egos, so they hire people less capable then them. Or they hire good people but pay them so poorly that their employees get frustrated and go out on their own. 5. After all the bad stuff, the manager feels it was a mistake to have tried to get so big, breaks up with his partners, keeps one or two key artists, and starts a record label or goes into the movie business.