Thursday, March 10, 2011

Music Business/Law Tips - "Management Agreement" (Part 1)

Once an artist has decided to work with a manager in which there is mutual trust and belief, it is advisable to memorialize a management agreement ("Agreement") in writing. Such an Agreement has certain elements an artist should be familiar with. This article will discuss the most important components.

The Agreement will contain a description of what the manager will do for the artist. The standard terminology is that a manager will "advise and consent" the artist in all aspects of the artist's career. Although this is vague, the manager will be performing creative functions, such as formulating an image, selecting material, and finding ways to promote the artist. Further, the manager will act as the artist's liaison with record companies, publishing companies, attorneys, agents, the press, etc.

The Agreement will also set forth that the manager is "not a talent agent". This means that the manager is not agreeing to find live gigs for the artist. There is a law in California which requires a talent agency license in order to procure live engagements for an artist. A talent agent must abide by strict standards which most managers do not want to be shackled by (i.e., posting a bond, limited commission percentage, cannot work out of home). If a manager violates this law, the artist can terminate the Agreement and require the manager to pay back commissions collected from the act in the past.

Additionally, the manager is usually granted some form of "power of attorney" to act on behalf of the artist on business matters. This allows the manager to approve such things as ads and publicity. However, it also allows for abuses because this power lets the manager sign documents on behalf of the artist. Thus, it is best to limit the signing authority only to short term live appearance documents or publicity matters, and only then once the artist has consented to the terms.

[part 2 next time]

Ben McLane Esq

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