Length of Management Contract (Don't believe everything you read)

Read and learn but.....You can’t always believe what you read.

A year or so back I got turned on to a very talented young female singer/songwriter. I saw a lot of great talent. Enough that she stood above anyone I had seen in a long time, so I got excited about working with her. We had met a few times and started the process of negotiating an agreement. One of the first things I told her was to get a lawyer knowledgeable about entertainment.(my lawyer hates it when I do that)

The lawyer she selected told her she shouldn’t have more than one year agreement, and that if I wanted more than a year this was proof I was trying to take advantage of her. I’ve seen this same advice given many places on the net (on indie music sights,) that says the same thing. Some of these are even written by lawyers. In fact I saw this advice today on a posting about Artist Management Contracts on about.com. Not picking on them, you can find it on other sites as well.

I’ll share something with you. Anyone who gives out such advice doesn’t know what they are talking about. At least in my humble (yeah right!) opinion.

I would never sign a one year agreement and I don’t know of any legitimate (and/or knowledgeable) manager that would.

It takes time to do everything associated with putting your career on track. I’ve not seen an unsigned artist (nor many signed ones) that didn’t need Talent/Artist Development. I can't give you a one day program on being a better performer and taking better care of your fans. And it takes time to put together a Strategic Plan and the Marketing /Promotion plan too! It takes time to get the artist into the studio, record, mix, master. Put together demo packages geared toward your intended targets etc. And a whole lot more that is necessary to get an artist positioned to be successful.

All of that takes time, depending on the artist it can take a lot of time. Why would a manager take all that time and work to put all that together and then have no time left on a contract?

If you are trying to negotiate a “deal” with a label, those negotiations alone can take many months. If a label finds out your manager has only a one year deal, l they can wait it out with superfluous negotiations until the managers contract is done. Then they can come back to the artist and offer you a deal, perhaps at less favorable terms...and tied to “you must sign a management contract with ....(someone who looks out for the label interest more than yours.) No they would never do that! The labels...like the government....is your friend, and is only here to help you.

Managers know the odds at any individual artist being successful. The odds are very poor, even if you are an immense talent. I won’t go into that in this post. Look for my other posts and check out The Business of Music, Bettering your Odds, for more information about the odds of being successful in the music business.

Managers also know that with an unsigned artist the Manager invests three years of his time and money before he can expect any return....if he ever gets a return at all (remember the odds.)

So you’re wasting your breath....and my time to ask me for a one year contract. I didn’t just fall off the turnip truck.

My negotiations with the singer/songwriter drug on for six months (I’ll never do that again.) Term wasn’t the only issue but it was a big one. Finally I told her I’d rather be a fan than her manager and/or label. I hated telling her that because she was so talented. I go see her perform now and then, as I still admire her talent. She’s not much farther along in her career now than she was a couple of years ago..... and she should be. That makes me sad.

Now I realize that if you pick the wrong manager and you have a long term contract, you can lose a lot too! So, you have to pick carefully, and be sure you've got the right person. That's hard to do. But that's what you have to do.

You can’t believe everything you read on the net or in books.

Having said that...here is something you can read....hah! It is written by an entertainment lawyer and touches on the points I made.

The following article can be found at http:indiebible.com/icb/feb2001.shtml#10. I have included the entire article but I encourage you to go to the source, so that you do not have to trust me, that I have somehow modified it to favor my point of view.

10. ARTIST MANAGEMENT CONTRACTS II by Joyce Sydnee Dollinger
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"Music is a business and you must well versed in the business to make a career as a musician." -- Music Industry Executive
The legal relationship between a personal manager is usually based on leverage in the music business. Those artists who are new to the music scene, have less bargaining power when contracting. However, this does not mean they will not enter into a fair deal with personal manager they want to work with. Fair is not the same thing as leverage.
Management contracts can be long and hard to decipher, but don’t let them scare you. Just remember what is important to you and what your common goal is since this will lead to the path of a fair, intelligible contract. Exclusivity and the term of a personal management contract are necessary topics that should be discussed first.
In a personal management contract, exclusivity is one-sided. An artist must accept the personal manager as the exclusive personal representative for the artist. However, a personal manager’s services are not exclusive to that artist. A personal manager must be at all times free to perform the same services for others and be able to engage in other business ventures.
If the artist is signing with a corporation or partnership, but has a personal relationship with a particular manager in the corporation or partnership, the artist may be able to request a key-person clause to be added to this term in her personal management agreement. Again, it depends on the leverage of the artist and the company the artist is signing with. This clause guarantees that the personal manager, not some other person in the management corporation or one of the manager’s friends, will be primarily responsible in rendering services to and on behalf of the artist. The artist may also request that a clause be added stating something to the effect that if the personal manager works with another client or in another business venture, the manager will have sufficient time to dedicate to the artist.
The term in a personal management contract can be based upon a fixed period with options, measured by third party agreements, or performance criteria. Most fixed period contracts are for a minimum of three (3) years and go to six (6) years. These fixed periods exclude the option periods and are at the manager’s discretion because the manager is the person required to perform certain services for the artist. Options are usually exercised yearly.
If the term is to be measured by long-term third-party agreements such as a record release or publishing agreement, the personal management contract is usually defined co-terminously with the third-party agreement. These agreements are usually for signed, established artists. This is fair to both parties since the artist will need someone to help her during that time with promotions, press and making sure the third-party is doing its job for the artist. The term in a third-party contract may also be based on a number of albums deal, such as a three album cycle.
The term can also be based upon performance criteria, such as procurement of a record deal, a bona-fide business offer, or income levels. Contracts with newer artists usually have a "shopping period" and state that if a recording agreement or other third-party entertainment contract is not procured within a period of up to twenty-four (24) months, but usually eighteen (18) months, after the commencement of the term, then the management agreement may be terminated by either party.
Other personal management contracts state that if a bona fide business offer is not accepted by the artist, such as a booking agent, publishing, or literary contract, the personal manager should be allowed to extend the term of the contract. A personal manager may also be allowed to extend the term if the artist is not meeting her end of the bargain or in a group situation, one of the members leaves and holds up the process of the band.
Artists can also insert provisions that provide for a minimum of earnings which the artist must obtain during the period before any option period may be exercised. This extension of a personal management contract is based upon gross earnings during the years preceding the relevant option periods.
Realistically, it is hard for both parties to terminate their contract just because they don’t like each other anymore because there is a personal investment which needs to be returned. There has to be a breach of the contract.
The artist, along with the personal manager, must understand that their relationship grows with time and that a personal manager needs a fair length of time to help an artist gain success in the music business. It can take a really long time before an artist starts obtaining notoriety or financial gain. Artists must be realistic with obtaining their goals.
Please note that this article only touches on the key points of a management contract. I do suggest that if you are negotiating a deal with a personal manager, you consult an attorney first.
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Joyce Sydnee Dollinger is an attorney admitted in New York and Florida and currently works at a major label in the Corporate Legal & Business Affairs department. She is also the Vice President of 2 Generations SPA Music Management, Inc. and SPA Records, Inc.. 2 Generations (www.2generations.com) is a music management company representing signed and unsigned bands/artists, producers and songwriters in all genres of music. 2 Generations also represents entertainment organizations/ businesses and provides consulting and entertainment services.
SPA Records, Inc. (www.sparecords.com) is a record label dedicated to developing, promoting and distributing breaking acts to the US and the World using traditional and innovative distribution channels. You can reach Joyce by email at joyce@2generations.com or by voice at 212-879-6997.