| "EVERYTIME YOU TALK TO ME, you're ten percent smarter than you were before,
so I just add that ten percent on to what all the dummies charge for nothing."
-Albert Grossman, the legendary 1960s rock manager, explaining why his
commission rate was ten percentage points above the industry standard of fifteen
percent.
In 1961, Bob Dylan was unknown, living in a tiny apartment in New York City,
scraping his way into the packed open mics of Greenwich Village. Just two years
later, Dylan was touring internationally in support of his third album. The
business success behind his career was in the hands of one man: Albert Grossman.
Grossman was, by all accounts, a quintessential talent manager: brash, sharp
tongued and impeccably dressed, in fervent pursuit of his two most prized
passions - money and the success of his clients. In other words, Grossman was
everything you'd want in a manager. He may have been expensive, but he was worth
every penny.
A manager can make or break your career. There are both practical and legal
considerations to keep in mind when determining whether the time is right for
management.
Two of the practical considerations are (1) finding a manager and (2) finding
the right manager. Regarding the former, large management companies actively
pursue artists for their roster and rarely accept unsolicited material. However,
artists can find management from a variety of other sources. While many managers
have tested track records, some transition into the field from other avenues.
The White Stripes (Ian Montone, former music attorney) and The Strokes (Ryan
Gentles, former venue booking agent) found management from alternative sources.
Search the connections you already have and keep a keen eye on those who might
provide proper guidance. The manager that could change your career trajectory
could be right under your nose.
Regarding the latter, the right manager has to be someone you can trust. While
this seems to be common sense, the music world is filled with stories of
swindlers and thieves who prey on the faith of their talent (see Lou Pearlman
and Allen Klein, prominent rock managers fired by their artists for unsavory -
and costly - business practices).
After you've decided on a manager (or have been pursued by one), here are a few
legal stipulations to keep in mind. While there are dozens of provisions within
a properly drafted management agreement, below are some of the more significant
terms to consider.
1. Term: Your agreement needs to be long enough for management to achieve
its initial goals (a year or more for new artists). However, be wary of terms
that are indefinite or bound you to a manager for several years without an exit
strategy. The agreement should be mutually beneficial: if management is
advancing your career, it should be rewarded and the relationship should
continue. However, if management is not performing what is required, there
should be a framework set for terminating services within a reasonable
timetable.
2. Commission: The industry standard for music managers is usually fifteen
percent. This number reflects the gross (not net) of proceeds, which means your
manager can take home a hefty paycheck, especially in comparison to any
individual band member. A manager's reputation and past successes can reflect
his or her take. In essence, a great manager is worth a higher percentage, at
least initially, based upon the power of his or her phonebook and clout within
the market (see Albert Grossman, above).
3. Sunset Clause: This clause is one of the most important in your
management contract and deals with what percentage your former manager will be
paid subsequent to his or her representation. Essentially, a manager will be
paid for a certain amount of years for the deals entered into under their
management contract. Generally, the manager's commission lowers every year
following the end of the contract. If your sunset clause is too generous, your
gross income could be docked between thirty to forty percent before you see a
dime (imagine paying alimony to several ex-spouses).
4. Number of Clients: Attorneys are bound by the Model Rules of Professional
Conduct, which prohibit a lawyer from taking on more clients than he or she can
handle. For better or worse, managers are not bound by ethical standards. To
avoid being the neglected child, it may be wise to include a stipulation in your
contract regarding the number of other clients the manager may sign while under
your agreement (and to include a term stating that your manager will use "best
efforts" in his or her representation).
Adam Barnosky is an attorney specializing in business development,
intellectual property, licensing and civil litigation. He has worked with
musicians, actors, and playwrights in Boston and New York City. He can be
reached at abarnosky@boballenlaw.com.
DISCLAIMER: The information contained in this column is general legal
information for educational purposes only. Any use or reliance on this column
does not create or constitute an attorney-client relationship.
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