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Negotiation Guide for the
Personal Management Agreement

by Joy R. Butler, Esq.

[Audiobook Cover] This article is an excerpt from the audiobook,
The Musician's Guide Through the Legal Jungle:
Answers to Frequently Asked Questions About Music Law



Musicians may seek advice from several music managers during the course of their careers. The personal manager is the music manager who assists the performing artist in the development and overall direction of his music career. This negotiation guide highlights some of the issues that should be addressed in an agreement between a musician and a personal manager. For a more detailed description of the role the personal manager and other music managers and agents play in the musician's life, you may want to read the article, Music Agents.

TERM
Personal management agreements normally run for 1 to 5 years. Most managers will want a term of at least 3 years. It is in the artist's interest to have the option to terminate the agreement if certain goals are not met. For example, the artist may have the option to terminate the contract if the artist has not secured a recording contract within 18 months of entering into the personal management agreement.
EXCLUSIVITY
Personal management agreements are exclusive. This means that the artist can not have another party perform the duties of a personal manager. However, the personal manager may represent other artists.
DUTIES OF PERSONAL MANAGER
In advising, counseling and assisting the artist with career development, the personal manager's duties are varied and often undefined, and may include many of the following activities:

  • Assisting in the selection of songs, background vocalists, and producers for demonstration tapes and record albums
  • Helping the artist secure a recording contract, songwriter agreement and other music contracts
  • Coordinating relations between the artist and the record company and music publishing company
  • Overseeing the planning of publicity and marketing campaigns
  • Coordinating tour schedules
  • Aiding in the selection of and coordinating the efforts of the artist's other business advisers (attorney, booking agent, business manager, etc.)
  • Handling the day-to-day tasks of managing the artist's career
  • Acting as the liaison for communications between the artist and the rest of the world

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SCOPE OF REPRESENTATION
The personal manager's representation of the artist may be limited to music or encompass other entertainment services.
AUTHORITY OF PERSONAL MANAGER
Personal managers often ask for a power of attorney to sign contracts on behalf of the artist. The artist may wish to limit the manager's authority to sign contracts on his behalf to those contracts of a short duration, standard union agreements, and contracts for which the manager has received the artist's verbal consent.
COMMISSION
The typical commission is 15 to 20% of the artist's entertainment-related income but may be as high as 25%. The artist may seek to exclude some categories of income from the manager's commission, or make income in certain categories commissionable only after all related costs have been paid. For example, most personal management agreements should provide that the manager does not collect a commission on money that is not actually income to the musician such as money a record company gives the artist for recording costs and tour support.

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COMMISSION PAYMENTS AFTER TERMINATION OF THE MANAGEMENT AGREEMENT
Terminating a personal management agreement may not immediately terminate the music manager's right to collect a commission on the artist's income. While it's fair for the personal manager to continue to earn commissions on income generated by contracts she helped the artist secure even if that income is earned after the termination of the management relationship, there should be some limit placed on such post-management agreement commissions. Otherwise, the artist could potentially be obligated to pay commissions to a manager for five or ten or more years after termination of the agreement.

Contractual provisions to phase out a personal manager's commissions can take many forms. The manager and artist might negotiate a cut-off date for commissions, a commission that is gradually reduced over a period of time, a negotiated final payment to the manager at the end of the management relationship, or any combination of these methods. For example, the manager might receive a 10% commission for the first six-month period after termination of the agreement, 5% for the second six-month period, and no commission thereafter.

The importance of negotiating the phasing out of commissions can't be overemphasized. After terminating a relationship with one personal manager, the artist will most likely retain another personal manager. No artist wants to be in a position where he is paying a commission of 15% or more to two separate personal managers on the same income.


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LOANS AND ADVANCES
The personal manager may spend her own money on expenses associated with promoting the artist, and she will want to be reimbursed for those expenses. The contract should limit the amount the manager can spend without the artist's authorization.
KEY PERSON PROVISION
For the artist signing a management agreement with a management company instead of with an individual manager, the contract should specify which individuals will always play an active role in the artist's account.
ASSIGNMENT
The personal manager should not be allowed to assign the contract to another party without the artist's consent. In essence, assignment means that the manager can hand over her responsibilities under the agreement to another company or person.

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Joy R. Butler is an entertainment, intellectual property and business attorney. (View Joy Butler's full bio.).


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