Picking a manager for your music business

 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:

1. 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.

2. Helping you with the creative process, such as selecting which songs to record, selecting a producer, recruiting band members, selecting photographers, and so on.

3. Monitoring your social media, organising your marketing and advertising, and promoting your career to everyone the personal manager comes into contact with.

4. Assembling your professional team by connecting you to business managers, lawyers, and agents and overseeing their work.

5. 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.

6. 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.

7. 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:

1. A senior manager who is genuinely excited about you and has a junior assistant.

2. A midsize manager who is wildly enthusiastic about you.

3. a significant, strong manager who is hiring you as a favour (personal or professional) for someone who is very important to him or her.

4. 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.

What you don't know about the music business Pt 1

  Terms you need to know about the music business.

-        Did you know that most record deals don't even require the record label to produce a record, let alone distribute it?

-        You don't really have to register with the Trademark Office to get a copyright?

-        If we compose a song jointly and you just write the lyrics and I only write the music, we each own a portion of the music and a piece of the words? And that neither of us can use the music or the lyrics without compensating the other?

-        Some film music composers can’t even write music, much less create the sorry arrangements for each instrument of an orchestra?

Now you have obviously asked a lot of questions on what a royalty is, how to sell rights of your music to anyone, the right agreement to execute and all. But you barely get the needed details and answers you need just because some people love to hoard information. Well, worry no more.

The music industry is a thriving one. Piracy is still prevalent, CD sales are declining, and digital sales are failing to compensate for the loss from CDs. Record labels are losing money, laying off employees, and generally panicking. Furthermore, the global economy is sucking the big one.

Don't worry, there's some good news on the way. Digital music delivery is becoming a greater part of the industry. Demand for music is at an all-time high (despite the fact that pirates provide a lot of it), and we are seeing new ways to transmit music (such as the internet and mobile phones), which means music is now available to individuals who would not go into a record studio. It also means that artists may communicate with their audience in ways never previously conceivable. Consider the music sites SoundCloud and Audiomack.

As new ways to exploit music emerge, you may be wondering how musicians get compensated. You've come to the correct spot, my buddy. Almost all record labels demand on a cut of artists' earnings from non-recorded sources. In other words, record labels want a cut of what musicians make through song writing, touring, merchandise, fan clubs, and so on. Why would record labels do anything like this? Why would artists consent to this? Is it necessary for artists to work with a record label now that digital distribution is easier than ever?

Then you are at the right blog.

WHAT IS A RECORD?

Let’s turn to the basics. What is a record?

The contractual definition of a record in almost every record deal covers both audio-only and audio-visual media (meaning ones with both sound and visual pictures), such as videocassettes and DVDs. The definition of recordings also includes (and continues to include) any other technology known now or in the future that is capable of transmitting sound alone or sound combined with visual pictures. More significantly, the existing agreements define “records” as any type of music transmission for consumer use, whether sound alone or with images. This is intended to detect internet and other electrical signals. As you can see from these definitions, record deals can make life a bit tricky if you’re a recording artist and also an actor or actress in films.

MASTERS

The word master has two meanings:

1.      The original studio recording is referred to as a master since it is the master (controlling entity) from which all copies are created (the machines that make the duplicates are referred to as slaves—get it?). Think about the Tidal music streaming service. Tidal provides Master Quality Authenticated (MQA) to its subscribers and it is also unique for giving artistes and songwriters higher royalties gotten from the masters recordings.

Master recordings are now mainly done on computer hard drives, with cassettes becoming obsolete (although digital audiotapes occasionally pop up). These are multi-track recordings, which means that each instrument and vocal component is recorded on a different track or channel: drums on one track, guitar on another, voice on another, and so on. There are two masters – the original multitrack, and the finished two-track.

      The term "master" can also refer to a single song's recording. As a result, you might argue that an album contains "10 masterpieces" (ten picks). Because each segment was historically "carved" into vinyl, these separate recordings are also known as cuts.

ROYALTIES

Straight to the money talk. What are royalties in the entertainment industry?

Let me give you a basic concept.

My cousin, Nneka, is in the used phone business. She’s famous throughout the city of Abuja because she trades phones for anything. At one point, she traded a Samsung S20 phone for a set of a makeup kit, a set of cinematography tools, and an iPhone 12 pro (jokes aside, this actually happened). She then traded these items along with a portrait painting of Davido, for a four-year-old Lassa arp dog named Sparkle.

About that time, my girl and I were looking for a dog. We planned on having kids, and we wanted to test our parenting skills on something that wouldn’t use drugs if we failed. In trying to decide what kind of dog we wanted, we used to take Sparkle for outings on weekends. In a perverted way, we began to think of her gnarled face and drooling as cute. Anyway, Nneka decided she was going to breed her, and we wanted a puppy. So, I helped her and got a stud dog, through a sophisticated referral system. I called a place named K9 Bulldogs, which conjured up images of some suburban squire’s dogs lounging around on velvet pillows. Well, it turned out to be a dilapidated house in Lokogoma, the most impressive feature of which was its bulldog smells. But K9 had a brown and-white champion stud named Winston, so Nneka hired Dapo's dog(mufasa), and Sparkle got pregnant.

About this time, Nneka decided she wasn’t interested in the headaches and stress of small puppies. So, she enlisted the help of her friend, Emmanuel. Emmanuel’s deal was that she would take care of Sparkle and the puppies, and when each dog was sold, she would get half of the sales price. So, if a dog sold for sixty thousand naira, Nneka would get thirty thousand naira, and Emmanuel would get thirty thousand naira.

What does this have to do with records you ask? Well, your record royalty is very much like Nneka’s share of the Lassa arp sales proceeds. In the case of records, the artist (Nneka) turns the recordings (pregnant Sparkle) over to the record company (Emmanuel), who then sells the finished product (puppies). For each record (puppy) sold, the artist gets a piece of the price, and the company keeps the rest to cover its cost and make a profit.

Royalties are paid for each record sold. Why do I emphasize the word sold? Well, the companies give away free goods, also known as special campaign free goods. This started when the companies wanted to push out large numbers of a particular artist’s album. To get the stores to stock more of it, they gave away   10%   or more of all records shipped. Originally, these were short-term deals (a few months), but they’ve evolved into a near-permanent arrangement.

These free goods are essentially a discount on the price. The record company doesn’t get paid for them, so they don’t bear royalties.

No company is giving away free goods for digital sales. That’s because there’s no need to incentivize a digital retailer to stock more units.

You need the following Agreements handy if you need to be prepared for the music business venture.

• Artist Recording deal agreement
• Music License Agreement
• Trademark and Royalty Agreement
• Artist Agent Agreement
• Distribution Agreement (can be edited to contain music distribution)

We will talk about music publishing in subsequent articles concerning the music industry.

 

WHAT YOU NEED TO KNOW ABOUT THE MUSIC BUSINESS PT. 2: SELECTING THE RIGHT LAWYERS FOR YOUR MUSIC BUSINESS

 Everyone has an idea; everyone has talent; everyone thinks that they can write or play or sing a song better than much of what they hear on the radio. There are one hundred songs on the charts. Why can’t theirs be one of them? Perhaps it can. However, I am certain it will not.

In fact, although unique talent is rare, all of us have talent to one degree or another. But what we do with our talent is the ultimate issue—and the key to opportunity.

I say opportunity, not success, because all one can hope for in the music business is opportunity. Success depends on many factors: the ability and inclination to roll up one’s sleeves and work at the craft of creation so as to actually improve and fine-tune one’s skills; the ability to earn money and to provide oneself with food and shelter during the process, which can and will  take  many  years;  understanding  one’s  limitations;  and identifying an attainable goal and keeping it in mind over the years, amid innumerable distractions. It also depends on one factor over which even the most talented individual has no control: luck—ever-changing radio formats; the attention—or inattention—of an artist’s representatives  at  important  moments;  timing  (for  example,  the release of a key single on the same day the label is shut down and its artists moved to a sister label). I  have  long  been  sure  that  most  of  the  talented  people  who pursue their craft diligently and over a long period of time—those who “stay in the ring”—do realize their potential. The truth of this has been proved time after time. What I am less sure about is what advice to give to the young artists who have talent but who may not have the personal or financial resources to pursue a career in the arts. One thing is for sure: These artists will not lack for advice. There   is   no   limit   to   the   number   of   people,   including   top professionals in the  music business, who think they know it all. Sometimes  advice  givers  are  being practical; sometimes  they  are simply jaded; sometimes they are dead wrong—and some are greedy and will say anything to get up-front money. So, how can the artist seriously  pursuing  a  career  in  the  music  industry  maximize  the chances  of  getting  good  advice?  As  I  emphasize  throughout  the article,  the  best  approach  is  to  assemble  a  team  consisting  of  a lawyer, a personal manager, a booking agent and an accountant (you will need someone to keep tabs on your expenses or cash flow).

Let’s talk about the professionals you’ll need to maximize your career and net worth.

SELECTING THE RIGHT LAWYERS FOR YOUR MUSIC BUSINESS

There is plenty of justification for seeking out a good lawyer from the outset, not least because lawyers have become an important source of business to the record and music publishing companies. Record companies know that if they maintain a cordial relationship with us, they may eventually be at the top of our shopping lists when an artist of significance comes into the picture. Lawyers are also safe—in the sense that the presentation of an artist to a record or publishing company by an attorney diminishes the possibility that the artist will create problems for the company in the future.

In addition, lawyers are licensed by Federal authorities and have ethical code of conduct that guide and bind them. ( like the Nigerian Bar Association, Rules of Professional Conduct 2007 and the Legal Practitioners’ Act 1975).

People in the entertainment industry have learned something that many in other industries –and countries- have not: the selection of a lawyer should be made earlier, not later, so he or she can help you in structuring your deals and relationships in ways that can avoid problems. But,  although choosing the right legal representation is one of the most important decisions that creative people make, there is no simple formula for making the right selection. Lawyers come with offices, secretaries, and occasionally ties and jackets. They come in every possible stripe and from every possible background, and it is difficult to evaluate them objectively. Attorneys with all of the trimmings appear to be more     stable—more     dependable—than     those     without.     But appearances  can  be  deceptive,  and  there  is  no  substitute  for extensive experience in the music industry.

It is not difficult to begin your search. Numerous websites and bar association assistance lines, as well as books and magazines, identify lawyers whose practice areas include the music business. Most lawyers, or their assistants and secretaries, are helpful and clear with callers and are happy to guide potential clients to the appropriate  firm  or  institution  for  assistance.  In  addition,  most lawyers will  provide  brief  consultation  time,  at  no  charge,  to potential clients.

Once you are in the process of narrowing down your short list of potential lawyers, however, things become more complicated. You will need to personally interview each lawyer, and at some point all of the following questions must be answered to your satisfaction:

●       Has the lawyer had experience with your kind of music?

●       Which record companies does the firm have the best relationships with?

●       Which record companies have most recently signed the firm’s other clients?

●       What is the firm’s policy with respect to introducing new clients to other clients –like producers, managers, songwriters, production companies, etc.?

●       How does the firm resolve the issue of conflict of interest in the event that it sets up relationships with other clients in your area?

●       How does the firm charge for services, and what are the rates of the partners?

●       When rates are about to change, does the firm advise the client?

●       Does the firm request a retainer (an advance against fees), and how is it calculated (for example, does it reflect hourly, monthly, bi-annual, yearly rates that will have to be “refilled”)?

●       What are the firm’s, and the artist’s, short term and long-term goals?

●       If the agreed-upon goals are not fulfilled, or are not fulfilled in a timely fashion, is the unused balance of the retainer returned?

●   How are the nitty-gritty details handled? (for example, when the firm “shops” a demo, does it copy the artist on the correspondence? If contracts are made via email or telephone, is it the firm’s policy to provide updates on each contact, or periodically on a quantity of contacts?)

Although it may appear so, I am actually not suggesting that as a potential client you interrogate potential legal representation with a machine-gun barrage of questions. Needless to say, no one wants to be  subjected  to  this  kind  of questioning.  And  you  are  still  the “seller,” not the  “buyer,” so you  will  have  to be  somewhat more circumspect in your approach. Nevertheless, these are all questions that need to be explored and eventually answered.

 

So in subsequent articles, we are going to emphasize on the importance of the following team members you will need. The main players once again are your: 1. Personal manager 2. Lawyer 3. Business manager 4. Agency 5. Groupies.

 With respect to number 5, you’re pretty much on your own. As to the others, let’s take a look at it in subsequent articles.