What you need to know about the music business pt 3: Picking a manager for your music business
THE PERSONAL MANAGER
Your personal manager is the most important person in your working life. A good personal manager can help you improve your career, whilst a bad one can send you into oblivion. When the work is done well, a personal manager serves as your company's general manager and chief operating officer (of course, there are some artists who do not have managers, but they are a very small minority, and they usually have one or more other team members serving this job) Paul Rosenberg, for example, is Eminem's manager).
The most important aspects of the personal manager’s job are:
Assisting you with critical business decisions such as deciding which record label to sign with if you decide to do a record contract, whether to do a publishing agreement, how much to demand, and so on.
Helping you with the creative process, such as selecting which songs to record, selecting a producer, recruiting band members, selecting photographers, and so on.
Monitoring your social media, organising your marketing and advertising, and promoting your career to everyone the personal manager comes into contact with.
Assembling your professional team by connecting you to business managers, lawyers, and agents and overseeing their work.
Putting together your road crew, negotiating the best deals with promoters with the aid of your agency, arranging the itinerary of the tour, developing a budget with the aid of your business manager, overseeing the tour personnel to make sure everything runs well, etc.
Screaming at your record business when they make a mistake, congratulating them when they perform well, etc., as well as pushing your record label to maximise the advertising and marketing campaigns for your records.
Generally acting as a bridge between you and the outside world, taking the fall for difficult decisions you make but don't want anybody to think you made, receiving demands for personal appearances, charitable requests (both for money and for your pleasant face), etc..
Let us first take a look at the structure of your deal with the personal manager, and then we’ll talk about picking the right one.
Here is how you can negotiate your manager’s deal:
Negotiating the personal manager’s deal
Despite the powerful personality of many managers (carefully designed to keep you in your place), it is possible to negotiate with your manager. However, just like any other negotiation, the result depends on bargaining power. If you’re a major artist, bringing in 30 million plus per year, the personal managers will follow you like floppy-eared puppies, delighted to take whatever treats you care to drop in front of them. On the other hand, if you’re a brand-new band negotiating with a powerful manager, you’re the doggy.
Here are the options to discuss:
Compensation: The proportion paid to the personal manager is the first and most obvious problem. Even though some managers claim that a new band's risk is worth 20%, you should endeavour to keep the number to 15%. They claim it will be years, if ever, before they are rewarded for their considerable effort (which is true). A compromise might be to set the personal manager's share at 15% initially, rising to 20% if you reach a certain income level (for example, 15% of the first $50 million earned, with 20% of the remainder going to the personal manager). The contrary has also happened in my experience; the personal manager receives 20% up to a certain level and then 15% after that. According to the hypothesis, the personal manager receives a larger cut when you're young and the personal manager can't earn as much, but when you're successful, the personal manager's cut lowers to the 15% average. At first, this seems a little strange because it appears that the personal manager has no motivation to help you succeed because the more successful you are, the smaller the personal manager's pay is. That isn't exactly the case, though, as all managers would prefer 15% of a large number over 20% of a small one. Even while it would obviously be worse if you came out, this kind of bargain is far better for you if you succeed.
Sometimes, rather than splitting the artist's gross revenue, management will split the artist's net revenue. This is far better for the artist because, unlike in gross deals, the personal manager won't be compensated if the artist loses money. In one arrangement that I am aware of, the personal manager received 20% of the band's net earnings. Another agreement compensated the personal manager on the net for touring but on the gross for albums and publishing.
Additionally, you could try to lower the manager's commission on revenues from endorsements (paying you to promote a product) and appearances in movies and on television. The claim is that hiring an agent to introduce you to these prospects costs money. More on this will be covered in later articles. If the manager won't lower their commission, you may be able to convince them to agree to only charge you for such deals after paying your agent's commission.
Exclusions: It is occasionally feasible to lower (or even remove) particular sources of income. As an illustration, if you're a well-known songwriter seeking management to help you launch your career as a recording artist, the manager may receive 15% of your artist profits but just 10% (or even 7.5%, 5%, or 0%) of your songwriting earnings. Alternatively, it's possible that the manager receives 15% of the royalties from songs on which you perform as an artist and a lesser (or no) percentage from other songwriting income. An accomplished actor in a movie who hires a manager to help with their music career is another illustration. In these circumstances, the region where you're already established is typically excluded (or the percentage for it is decreased).
If you exclude any of your earnings from commission, the manager won’t be obligated to do any work in the excluded area (though they often do as a practical matter).
Money-Losing tours: Sometimes you can get management to agree that they won't receive a commission if a tour is a financial failure. The idea that your manager's commissions should not exceed 50% of your touring earnings was covered in the discussion above. If you are unable to reduce your manager's fee on losing tours to zero, then try to negotiate a reduced commission (for example, instead of 15%, they would only get 7.5% on a losing tour), or at the very least, convince them to postpone payment of their commission until you are more successful (i.e., you agree they are entitled to a commission, but they must wait and be paid later, when you are bringing in money). Another variation is that the manager doesn’t get paid for dates where you make a small amount, such as 50,000 per night (or a similar negotiated figure).
Repayable Monies: You may have to return money you received as part of a contract. Ask the manager to return their commission on any money you have to pay in this situation. Even though a manager is paid on a gross basis, a certain amount of money is typically subtracted before calculating the management's percentage. Even though their contracts permit it, most managers don't receive commissions on these, but some do. Therefore, it's usually a good idea to be clear and prevent any misconceptions..
Term of the management
A management agreement often has a duration of three to five years, which refers to how long the manager will work for you. If you're a management, you want it to be as long as you can; if you're an artist, you want it to be as brief as you can.
When discussing the duration of a management arrangement, exercise extreme caution. Many performers have come to regret entering into lengthy agreements with bad management. However, there must be a delicate balance that benefits all parties. You don't want to be married to a fool who is holding you back, and managers don't want to work hard to start your career only to watch you leave at the first indication of success. The most typical solution is to specify that the artist may end the contract early if they don't make a certain minimum income.
The manager, if he or she has any sophistication, will also say that the “earnings” have to include offersyou turn down. The theory is that you can’t refuse to work and then get out of the deal because you didn’t earn enough. I usually agree to this, but require that the offers must be similar to those you have previously accepted.
Another approach is to say you must have a record deal (or a publishing deal if you’re a songwriter) within a year or eighteen months after the start of the term, and if not, you can terminate the deal. If you get this kind of provision, you should also provide that, if the record or publishing deal ends, the manager has to get another one within that same time period (twelve to eighteen months).
PICKING THE RIGHT MANAGER
So how do you pick a manager? Let's begin with the very best. Use the following metric to gauge your candidates: The greatest manager for your career is a strong, well-connected individual who has at least one significant customer and is genuinely excited about you. You can simply and someone like that if you're a superstar. If you're not, it doesn't happen very often. The reason for this is that a powerful and successful manager is typically only interested in a huge money-making customer. The logic is straightforward: servicing an established artist requires just as much work as establishing a new artist, and guess which one pays better (and faster)? (Yes,every once in a while, a powerful manager gets genuinely revved up over a new artist. But this is rare, and you have to be extraordinarily lucky even to get such a person’s attention.)
So let’s look at more down-to-earth alternatives, not in any particular order:
A senior manager who is genuinely excited about you and has a junior assistant.
A midsize manager who is wildly enthusiastic about you.
a significant, strong manager who is hiring you as a favour (personal or professional) for someone who is very important to him or her.
A young, inexperienced manager who is willing to kill for you.
There are of course endless combinations of the above, but those are the major categories.
If you can't obtain the ideal scenario outlined above, you'll need to make a compromise of some sort. The trade-off is between time and attention on the one hand, and power and influence on the other. A manager has at least one significant client who consumes the majority of the manager's time, which gives the manager influence. This implies that you'll receive less of it and hence less individual attention (although these people can often do more in a five-minute call than a newcomer can do in a week). The other extreme is a youthful, intelligent manager who has no other customers and who spends all of his or her waking hours pushing your career despite lacking influence and expertise.
Of course, a few managers have been able to pull off large, successful management companies, but they are the exception. Also, most of these big companies are really just a collection of managers who essentially share expenses and some central services (such as marketing, digital, etc.), meaning the managers are operating on their own for the most part.
Anyhow, every important manager has previously been an unknown. I wouldn't encourage a celebrity to seek a management that lacks expertise, but I do believe that many emerging musicians would be wise to do so. It goes without saying that you shouldn't do this if you have the chance to work with an experienced boss who is truly enthusiastic about you (or who has someone in their organisation who is). The appropriate youthful manager, though, can be a genuine benefit if this is not a possibility.
