Management Agreements and Related Issues (Part 2) - Page 3© Kent Newsome
Page 3
Jan 1, 1999
(c) Artist agrees that Artist shall pay all Artist's expenses which may arise in connection with Artist's activities in the Entertainment Industry including, without limitation, the cost of material, equipment, facilities, transportation, lodging and living expenses, costumes, make-up, promotion, publicity, accounting and legal fees, and Manager shall not have any liability whatsoever in such connection. Manager shall not be required to travel to meet with Artist at any particular place; provided, however, that when Manager travels on Artist=s behalf it shall be at Artist=s sole expense. Artist agrees to reimburse Manager for all reasonable expenses (collectively, "Expenses") which Manager advances or incurs on Artist's behalf hereunder including, without limitation, the cost of all long distance telephone calls, transportation undertaken by Manager at Artist's request or with Artist's consent and all reasonable lodging and living expenses connected therewith. Manager shall have the right to deduct all Expenses incurred by Manager on Artist's behalf whenever Manager receives any Gross Compensation. Notwithstanding the foregoing, Artist shall have the right to approve any single item of Expense over One Thousand Five Hundred and No/100 Dollars ($1,500.00). (d) The interest and compensation set forth above which shall be paid to Manager shall be a continuing interest, and shall not be revocable at Artist's pleasure. It is intended by Artist to create an agency coupled with an interest and the appointment and engagement of Manager and Manager's right to receive the Manager's Fee as provided for herein are the inducements for Manager to enter into this Agreement. 2. Discussion. These provisions set forth the compensation the manager will receive. In almost all cases, the compensation takes the form of a percentage of the gross revenues received by the artist. Typically, the manager=s commission is 15-20%, often lower for major, established artist and occasionally higher for new artists. In most circumstances, the commission should not be higher than 25%. The musician should also keep in mind that the manager=s commission is determined based on gross compensation. This means that the manager's fee comes off the top, with the musician required to pay most of the musician's expenses out of the musician's remaining share. Accordingly, it is not unusual for a new artist to take home less than his or her manager after the payment of expenses. Limitations on the manager's power to bind the musician to agreements and to spend the musician=s money should also be included. A threshold amount should be set forth and any expenditure by the manager in excess of such amount should be subject to the artist's prior approval.
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