The Manager/Artist relationship can be one of the closest and most important in the career of a musician. Managers are the ones who do the legwork, handling the day-to-day business side of an artist’s enterprise with A&R representatives, producers and agents amongst others, in order for the artist to focus on being creative.

It is a business relationship, so all parties need to be sure that this arrangement is the best thing for everyone. You need to be sure of who you are choosing to enter this relationship with. They are going to be giving you advice, they will be your face and voice to much of the industry. You need to be able to trust them implicitly. Once you have decided on this course, here are some tips as to what to look out for in the management contract.

1.Jointly and severally: As a solo artist, the contract you sign will obviously only apply to you. As a member of a band though you will sign the agreement ‘jointly and severally’. A musician will have signed as an individual but also as a member of the band. This becomes important in two main respects. Firstly, they are bound to the manager as an individual artist as well as a part of the band. Therefore, if a member decides to leave the group, they are still bound by the contract for the remainder of the term. The second element of this requirement is about group culpability and responsibility. Any liability incurred to the manager will be the responsibility of the whole not a single individual from the band.  If one member cannot pay, the other members will have to cover it.

2. Management Services: Some of you talented musical folks may also have creative inclinations in other areas, such as sculpture or as an actor (I am thinking of Jared Leto here). Note which areas of your career the manager is to provide service for. In some instances, it may state the manager will deal with all aspects pertaining to the ‘entertainment industry’. You may wish to change this to ‘the music industry’ to allow for the possibility of obtaining management services for other endeavours in the entertainment industry without fear of breach of contract. Additionally, the artist will be bound exclusively to that manager for a specifiedterritory, generally the entire world. You may wish to limit the exclusivity to a smaller territory in order to engage managers for specific regions of the world such as the USA or UK.   

3. The Term: The term of the contract is traditionally between 3-5 years in duration, at which time the agreement can be terminated with sufficient notice. There are many variations to this set up and each artist will need to decide what they prefer. BE VERY CONSCIOUS OF THE TERM, 5 years is a long time to be with a bad manager or an unenthusiastic band. It has become a trend to draft the term as an Album Cycles condition, the period from commencing recording to the end of touring and promotional activities associated with that record. This avoids the potentially difficult problem of an agreement ending mid-cycle at which time parties may terminate, momentum stall and management failing to recoup from their efforts.

4. Manager’s Duties: Providing advice, working alongside a booking agent to secure employment, obtaining that amazing record deal; these are just some of the things which fall under this heading. It is important to note the use of the phrases ‘best endeavours’ and ‘all reasonable endeavours’ regarding the provision of these duties. Their interpretation is an objective test, determined by what the wider world would consider reasonable and done with their best efforts by a manager performing their duties for an artist.  Despite all efforts on the part of the manager, they cannot guarantee to get everything a musician wants, they are managers not magicians. What is important for the artist is if they feel that the manager is losing interest and is not doing the best they can for them, they need to take special note of everything the manager has initiated or proposed. If an artist is unhappy, they need to approach the manager about their lack of diligence with this evidence. Going to court to prove breach of contract should be considered a last resort as it can be a long and arduous ordeal.  

5. Act on your behalf: The contract will empower the manager to act on your behalf in situations such as advertising and executing agreements. The manager will often consult the musicians about these agreements.

6. Artist’s duties: The artist too must perform their role reasonably and to their best potential. It is the manager’s reputation on the line here too, so if you cancel a gig suddenly for no good reason, perform badly because the group is drunk and continue to act without regard to the agreement, the manager could drop you. Managers will generally work very hard for an artist if they feel the artist is as committed to success as they are. A band cannot claim they are not receiving enough money if they turn down a lot of the ventures the manager brings to them. Sometimes, a contract will specify that the judgement of the performance of the manager must include the potential income from ventures and offers turned down by the band.

7. The Money: A manager is paid on a commission rate of usually around 15-20 % of your gross income. This percentage rate can vary, the manager will argue the risk of taking on a new band which may have a limited following and the extra investment required for launching the act to increase the percentage stake. These are valid considerations but artists should be very cautious of anything over 25%.

It is important to note that this compensation rate for live booking and merchandise is often taken from the Net Income. This means after all the additional expenses are taken from the fee, the manager will receive their amount. An example is a fee of for an appearance and the band may have expenses for food and hotels of. Managers commission of 20% will be charged after the expenses (£200) are taken from gross income (£1000) giving the manager £160 and the band £640 to be divided between the members.

If an artist signs a separate deal with a company the management owns, such as a publishing or record contract, management will not be entitled to the commission on such deals as this would constitute ‘double-dipping’. For example, they cannot get the percentage of royaltiesfrom the recordings made with the management’s record company then get a commission from your share of the royalties from that record deal.

8. Reductions, expenses and exclusions: The arrangement can be modified for net income commission on certain things, such as touring, in order to get the manager to keep costs down. Additionally, an agreement could be modified to include capping, agreements as to no commission on failed tours etc.

The commissionable income is usually subject to a number of exclusions and deductions in order to make the arrangement fair and successful. Investment income and tour supportfunding are examples of money to be excluded from the commission. Paying record producers, legal fees, merchandise production are examples of money to be deducted from the commission.  All these costs will require proof as will any expenses management will seek to obtain back from the bands income.

9. Sunset Clause: This clause put a final closing date on the arrangement between the Artist and Management if the contract is terminated through the usual requirements. It usually specifies a gradual phasing out of commissions and revenues. For example, 15% until the 3rdanniversary of the termination, 5% from the 3rd anniversary until the 5th anniversary of termination. These amounts will only be paid from contracts and arrangements substantially organised by the manager or entered into by the artist during the term of representation. Management are entitled to get this money due to the effort they put in to help the artist.

Artist need to be fully aware as to these dates to determine when they will have full access to their income streams, perhaps for new management. The main thing to be wary of is records and publishing deals. Be sure there is a final cut-off date, when the commission period ends completely.

10. Termination: In most instances, the contract will continue until notice in writing is given following the term as to terminate the relationship. If the manager is not properly fulfilling their duties, you should be able to terminate through failure to carry out required duties but this can be hard to prove. If a member of the band decides to leave, often the management team has the option to terminate the contract, with the sunset clause and other rights to be unaffected.

This is an important agreement not to be taken lightly, many careers have been made and lost under poor management and many court battles waged over such contracts. Remember, once you sign the agreement all parties need to abide by the terms and conditions. Good luck!

Okay, so the recording contract. The thing most musicians dream and strive for. So well done, you are now presented with one. It is important not to get carried away. First off, THE RECORD COMPANY IS NOT THE ENEMY, so approach with caution not angry scepticism. You need to take a deep breath and consider what all that legal jargon is trying to say. I mean, your music is your baby; you want it taken care of.

So what is a recording contract?

In simple terms, it is a legal agreement between the recording artist and recording label whereby the label is given the right to promote and sell the contracted record or records. What an artist needs to be aware of is the number of different, additional conditions attached to this arrangement. 

Rights & Exclusivity:

This is the important one people. The term ‘sole and exclusive’ will pop up throughout the contract regarding the many rights to do with you and your music. The areas covered will include:

(a)  During the process of recording, the artist will be bound to that label for the specified period to produce the album or EP and for a time following the recording for promotional purposes.

(b)  The label will exclusively own the copyright in perpetuity to those Masters. They will also prevent you from rerecording those songs for a certain time.

(c)  The record company will also have the ‘sole and exclusive’ right to exploit that product in any media, to grant licenses for compilations, synchronization and other profit making ventures.

So, what to look out for regarding all this stuff:

Firstly, some clauses may state they do not require your Prior Approval for certain ventures, such as the choice of promotional photos, or in issuing of licences for your recording. This can raise problems, as you may not want your song to feature on an ad for nuclear power due to moral/ethical reasons or that photo may make you look ‘fat’.  

You can ask to change certain clauses to require your permission for use. This approval could be determined as a unanimous decision by the band or by majority, a consideration I recommend should be outlined in the contract clearly to prevent headaches in the future.

Secondly, the music exploitation section of the contract will often make reference to Moral Rights. These moral rights protect the musician(s) reputation by guaranteeing them:

(a) identification as the author of that music and

(b) the right to object to the derogatory treatment of that work, to preserves it’s integrity against alteration and distortion. (you know, when musicians cry “that’s not my song, what did you do to it!”). See Copyright, Designs and Patents Act 1988, Ch.VI, s.77.

There are parts of recording contracts which will say that you waive these rights. You can ask them to change this in the contract, so you can object to anything they may do to the Masters in the future, thereby maintaining some control.

 

The Time Thing:

Time periods and deadlines are crucial when addressing the commitments from both the artist and label regarding the music. It is a two-way street and some key examples are as follows:

(a)  The Promotional Commitment: This outlines that the label needs to exploit and make public the recording commitment produced by the musician(s) within a certain time frame. This is to prevent the label from simply shelving the recordings. The territory specifications are important here, the label may only be required to promote in the UK.

(b)  The Recording commitment: This will specify how and when the master needs to be presented to the label ie. 6 months from the date of the agreement. It will usually also state how many songs, the quality of the recording and the total playing time required to fulfil the commitment. An example being an EP of 3 to 8 songs equating to 23- 25 minutes playing time.

The artist needs to be VERY aware of the possible full length of time they will be bound to a label, especially at the prospect of it all not working out. The contract will usually specify an initial period of say around 12 months that you are committed to the label including the recording commitment plus a certain period of time from the release for promotion what-have-you. It all seems straight forward, but what of this ‘Option to Extend’ thing?

An Option is a contractual legal term, in this scenario it gives the label the irrevocable right but not the obligation to extend the recording contract for successive periods usually with a new recording commitment. For example, the Initial Period may have required an EP to be produced of a certain length with a certain amount of songs. If the option to extend the contract, often called a ‘First option Period’, is exercised then a new additional requirement of say an album of 14 songs with a playing time of a minimum of 45 minutes need to be made within this new 6 month period.

It is important to note then that:

-          These options are usually consecutive and irrevocable. If the record company decides to exercise them under the contract, you are bound to abide by the new terms. It may seem harsh, but the label needs to be able to better guarantee their return from their commitment to you, the artist.

-          There is usually more than one option period outlined in the contract, such as ‘First Option Period’ then ‘Second Option Period’, each with an additional recording commitment.

The Money Thing:

Yes, this is the thing that makes the world go around and you will be brimming with excitement at the prospect of all those royalty payments.

The Royalties will come from the Net Receipts from the exploitation of the recording commitment. Now the amounts the label and the artist will receive will vary according to the way in which the recordings have been used to make a profit. The label and artist will usually get a fairly even split regarding the actual sale of the albums or EP, usually a 50/50 split of Net Receipts. For other ventures the proportion of profits will usually be higher for bands, such as 75% of the Net Receipts. This includes licensing opportunities for use in adverts, movies etc.

The basis of this split, is that the label has invested their time and effort into making the recording itself, its production, distribution etc. The synchronization deals rely more heavily on the talent of the artist themselves, which impressed the third party licensee.

There are some catches as to when an artist will receive these royalties. If a band receives an Advance before the recording is made, you may be able to afford Tesco finest sausages but it ain’t free money. It’s an advance on future earnings! Additionally, and this is when reading the document is very important, Budgetary Expenses provided by the record company for promotion and other things may be due back to the label. In both instances, this money is effectively owed to the label and will need to be earned back through net receipts until paid in full at which time the artist will start to receive the royalties.

Sorry, killed your money buzz.

Power to the Artist:

            Sometimes it may feel like ALL the power rests with the label in recording contracts. The artist is bound to the label for what seems like an indeterminate time and restricted in exercising their creative muscles. You have rights in the entertainment industry to practice your trade and there is a help in law, it is called the Restriction of Trade doctrine.

The recording contract can not specify requirements which are imposing overly harsh or unreasonably restrictive conditions on an artist and their musical aspirations. There are limitations on how long and with what commitment a record company can tie an artist(s) to the label. Courts in some instances have found it to be an unreasonable restraint to bind a band to a company for say 6 albums or 10 years.

‘But I am in an exclusive recording contract and I just got a call from Kanye West and he was to duet with me!’  Never fear dear artist, the law will usually look unfavourably on a label denying you this opportunity. Generally there is a clause in your contract which will allow you to do certain things with the label’s permission and acknowledgment.

Now, don’t rely on the fact that the contract looks unreasonable, you will sign it then go to court to get out of it. BAD MOVE (yes, I am talking about you former Stone Roses Manager Gareth Evans). You will need to go through the courts, be prevented from recording with anyone else until the matter is resolved. Before you know it, 3 years have passed, you are working at ASDA and you may not have won!

This is a tricky area of law and not straightforward. Just ask George Michael. Truthfully these issues are unlikely to arise, but it is important to know your rights!

So the checklist:

1.    When you get it, do not, I repeat DO NOT sign it right then and there. It may seem basic, but you will surprised how many people would treat such an important contract  like their basic mobile phone terms and conditions form. You need to read it from beginning to end. If you don’t understand something, ask. If you are not happy with the answer, ask someone else. Remember, this is important. You do not want a Stone Roses moment.

2.    Be aware of the requirement for “Prior Written Notice”. You cannot just tell people at the label in these instances. You have to write to them to say ‘you have not released out album within the release commitment period’ or ‘we do not approve of the use of this recording in this advert’. The door swings both ways, they also have to write to you. Legal cases can fall apart simply due to a lack of a letter.

3.    Be conscious of the time requirements. Specific dates are important, the last day to complete the recording etc. I recommend getting a wall year planner, outline all the dates clearly for all your’s and the label’s responsibilities.

4.    Be aware of your rights, when the label must get approval, when your royalties are due etc.

Oh, and why the Stone Roses? Because they rock people and what happened to them SUCKED!