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management forum

The Undercurrents Series of Music Business Educational Forums is designed to assist musicians, songwriters, bands and music industry professionals with continued growth and knowledge of the music / entertainment industry.  These forums and the information provided is practical rather than legalistic in its approach and should not be used as a substitute for legal advice in relation to any particular matter.   Undercurrents, Inc. accepts no liability for any errors or omissions.

Sample Management Agreement

Tips

Management

The Undercurrents music management forum gives an overview of the roles of management.  The forum also discusses the aspects of musicians dealing with management such as choosing the right manager.


To start the new year out right, I want you to think about money. Where does it come from, and what will you do with it, if you get any. In case you ever forget that it takes money to make money with your music, here is a summary of some general income and expense categories that may factor into your business/budgeting forecasts. As you can see there are very few sources of income from music, and inevitably the expenses you incur must come from those income sources. So, wake-up call to financial planning.

(Note: please don’t ask me what the ‘average’ income will be for the ‘average’ musician or band, or what to budget in each expense category. Whatever you can raise is what you have to work with, and there is never enough money to promote and market music. There are too many variables in those questions to give you accurate answers. In general, to establish yourself as a professional artist…expenses for all the categories listed below will be 5 time higher than whatever you are thinking they may be.)

As you look over the income sources remember that outside of some live performance fees, and sales of your music and merchandise (like T-shirts, etc) most of the income sources take years to develop. I get questions all the time about where will the money come from to start up a label, or your own business? The answer is this. From wherever you can get it… loans, sugar daddies, lottery winnings…whatever. Raising the funds to start your own business is your own business. Perhaps now you understand why so many musicians and bands want those record deals. Record labels front the money to develop, market, and promote their artists. Record labels are businesses that understand it costs a lot of money to sell an artist’s recordings, and the successful labels are well funded so that they can go out there and fight the good fight…marketing the records they have released.

Read this and weep, or better yet…read this and PLAN!

A Musician or Band’s Source of Income:
a. Live Performance Fees
b. Sales of your own recording OR
c. Record Label Recording Contract Royalties
d. Songwriter/Publishing Income Sources
     * Mechanical Royalties
     * Performance Royalties
     * Synchronization Fees
     * Sheet Music Sales
     * Commercials/Jingles Income
     * Internet Streaming Fees (pending)
e. Merchandising Royalties ( T-Shirts etc.)
f. Misc. Income Sources
     * Investment Income
     * Endorsements
     * Songbook and Video Sales
     * Multimedia Product Sales

2. Expenses for a Musician or Band (Putting out their own record) :
a. Recording fees: CD/Tape
     * Producer/Engineer
     * Studio Costs ( From Pro Tools to 24 Track)
     * Tape and other studio supplies
     * Equipment Rental charges
     * Guest Musician fees
     * Mixing and Mastering fees
b. Graphic Artist/Cover Art Design costs
c. CD/Tape/Vinyl Manufacturing/Duplication charges
d. Promotional Expenses (Independent Radio Promo Reps/Independent Sales Reps,)
e. Marketing and Sales Plan costs (One sheets, Co-op advertising dollars, Ad money)
f. Publicity/Promotional Material Costs
     * Publicists Fees
     * Promo/Publicity Kit Design costs
     * Flyers, Posters, Envelope Design costs
     * Printing/Copying charges
     * Photographer fees and duplication charges
g. Office Expenses
     * Rent
     * Stationary and office supplies/furniture
     * Postage
     * Phone and utilities bill
     * Office equipment ( computers, fax machines, phones et al.)
h. Taxes
     * Local, State, and Federal taxes
     * Tax preparation costs/Bookkeeper fees
i. Band Equipment Costs
     * Instrument purchases/rentals
     * Tour Luggage
     * Misc. equipment repair/maintenance costs (strings, drumsticks etc.)
     * CDs and Tapes ( for listening and study purposes)
     * Misc. recording/playback equipment (4 track recorder/mixer etc.)
     * Sound system
     * Rehearsal space costs
j. Songwriting
     * Copyright registration filing costs
     * Performance Rights Organization Fees ( ASCAP-BMI-SESAC)
     * Talent Lessons ( vocals, instrument instructions, etc)
     * Conferences/ Seminars budget
k. Artist Business Team Costs
     * Personal Manager/Consultant fees
     * Business Manager/Accountant fees
     * Booking Agent fees
     * Publicist fees
     * Music Attorney fees
l. Transportation costs
     * Auto/ Van purchase/rental/Insurance costs
     * Maintenance costs (gas, service, repair)
     * Airline, bus, and/or train tickets
     * Highway/Ferry tolls
m. Touring expenses
     * Per Diem ( for food, lodging etc.)
     * Road Manager/Roadies salaries
     * Lighting/Sound equipment purchase/rental costs
n. Merchandise (T-Shirts etc.)
     * Design costs
     * Manufacturing and shipping costs
o. Website and Internet Fees
     * Website design, maintenance, connection fees etc.)
     * E-commerce setup and processing fees
     * Email setup and processing fees
p. Miscellaneous Expenses
     * Costumes/Stage clothing
     * Insurance (health, equipment, life etc.)
     * Union dues
     * Video production and manufacturing costs
     * Whatever else comes along that you forgot about


How to be an organized working musician

Five types of jobs

Equipment - organized, detail-oriented person responsible for making a list of all the equipment (by case) and putting that list somewhere in each case to communicate the contents to all band members. TIPS: Always check disposables (e.g. batteries, strings, and cables). Use luggage tags for marking cases & a tackle box for miscellaneous small supplies and tools.

Promotion/Marketing - person to let patrons know that your band is playing somewhere. Administers the mailing list (updates database, puts together mailings), contacts area radio stations and retail outlets, distributes posters and press kits. TIPS: Get help from within band (stamp-lickers, poster-hangers, etc.). For out-of-town shows, contact radio 2 weeks before show, retail 3 weeks before show (get your merchandise in there). Use calendars to help keep gigs organized (use different color markers for ease). Dump college mail lists every June (students move yearly).

Travel - person responsible for advancing the show. Find out all the details about the venue (e.g. equipment on hand, directions to show, load in time, sound check, when & how do we get paid, parking). Schedule, cost out & map the trip (use Internet map sites for directional help if needed). TIPS: Make out a standard list of questions for every gig; be as technical as possible (e.g. boom stands vs. straight). Make a stage plot for the band listing number of inputs for the soundboard. Check the weather. Buy food to eat in car (saves $ and time).

Merchandise - person responsible for keeping tabs on CDs, shirts, hats, other selling items. Keep this money separate from performance pay. Reorders items when needed. TIPS: Use inventory sheets to keep track of all sales; record immediately after every show. NO RUSH SHIPMENTS (saves $).

Accounting - person who handles the cash! Pays bills, trip expenses, and merchandise. Sets up sheets for expense sheets and merchandise sales/inventory. Only responsible for keeping track of money, not making it.
TIPS: Get a business credit card to aid in keeping track of expenses. Buy in bulk if possible. Don't owe money. Open business bank account to keep all members liable, not one. Invoice each gig and pay band members using bank checks; don't just split funds at end of gig. DON'T BUY UNLESS YOU CAN AFFORD IT!


SAMPLE MANAGEMENT AGREEMENT

The following management agreement is a simplified letter from you the artist to the person who wants to manage you, to enable you to compare with contracts you may be offered.  It is not a substitute for a formal agreement drafted and negotiated by a professional music business solicitor which is likely to be far more complex!

Before signing any form of management contract seek advice from a solicitor and establish who owns the company you are expected to sign to and whether the manager will actually be responsible for your day to day affairs.

DISCLAIMER
This article is offered as an educational and informational tool only, and should not be relied on as legal advice. Applicability of the legal principles discussed may differ substantially in individual situations. The sample contract is for illustrative purposes only, and has not been verified for compliance with the law of any particular state. If you have a specific legal problem or concern, you should consult an attorney.

 

Agreement
for Personal Management

The signatories hereof warrant to each other that each has taken the professional advice of a solicitor specializing in such agreements before their signature hereof.

Artist Name:-
Stage Name:-
Address:-

Managers Name:-
Address:-

Agreement Date:-

Dear Sir/Madam

We confirm our Management Agreement whereby we appoint you to represent us as our sole and exclusive manager under the provisions of this agreement as follows:-

1.  This agreement relates only to my professional activities and confers the right to represent me as a solo artist. (Bands/groups/duo's etc need to specify that only the band as a whole is represented and any solo activity requires separate consent).

2.  Both you and I warrant by our respective signatures that there are no existing restrictions that prevent either party from entering into this agreement or performing any of our obligations.

3.  This agreement relates solely to activities as a musical artist and in no way confers the right to represent or hold yourself as representing me in any other field of entertainment or area of work not connected with the music industry without prior written consent.

4.  During the Term of this agreement defined below you shall have the following obligations:
 (a)  To use your best endeavors to promote and develop my career as a music artist and provide me with regular reports on your work.

 (b)  To ensure all monies due to me are promptly collected and remitted directly to me by the parties from which they are due.

 (c)  To refer all enquiries connected with our work in areas which you are not permitted to act directly to me.

 (d)  You shall not have the right to assign or transfer obligations to any other person or company without prior written consent, any such act shall immediately and retrospectively terminate your appointment and this agreement.

5.  The following are the obligations I agree to:-
 (a)  To be available and comply with your reasonable requests to undertake activities pertaining to my career at my sole discretion.

 (b)  Not to attempt to negotiate agreements with 3rd parties directly which relate to activities which you are responsible for and to refer all such third parties to you.

 (c)  To refer all Press enquiries to you.

 (d)  To notify you of any changes in address or contact numbers.

6.  During the term of this agreement I shall reimburse any expenses directly relating to your activities as my manager upon request by you, with the exception of office expenses i.e., telephone, staff etc., which will be your sole responsibility.  Expenses in excess of $?? for any single item must have been approved in writing prior to being incurred or will not be reimbursed.

7.  If you are permitted to manage other artists then I require you to submit written details in respect of expenses that are related solely to your activities as my manager and not as manager of other artists.

8.  During the Term of this agreement you shall not be entitled to manage other artists without my prior knowledge and/or consent and you shall ensure that management of said artists does not adversely affect your obligations set out within this agreement.

9.  You shall be entitled to charge for your services a commission of 15% (maximum 20%) of the (gross or preferably net) income received by myself in respect of the activities the subject hereof during the Term and Commission Period (excepting that following termination of the Term the commission payable shall reduce to 10% of the (gross/net) income and will be subject to the limitations on the source of such income set out below). Commission shall be payable based on net income received by myself for live work during the Term and for the avoidance of doubt during the Commission Period you shall only be entitled to you commission in respect of income derived from recordings and compositions made in whole during the Term.  You shall be solely responsible for meeting your own Income Tax, Social Security, and/or Corporation Tax.

10. The Term of this agreement shall be 2 years from the Agreement Date with the provision that I shall be entitled at my sole discretion following the expiry of 6 months from the Agreement Date to terminate the Term in the event that you have not procured the signature of a publishing or recording agreement by such date.  The Commission Period following the expiry or termination of the Term whereby you are still entitled to receive commission as set out in Clause 10 shall be 2 years from the date of termination, however in the event that I have exercised the right to terminate the term after 6 months you shall not be entitled to receive commission on future income derived from recordings or compositions made during the Term.

11. The Territory governed by this agreement shall mean the United Kingdom. (World, whichever country you reside and/or any countries you designate)

12. You shall be entitled to appoint another person as my manager in certain countries or territories of the Territory provided I grant consent to such appointment and the identity of such person and provided that such appointment shall not discharge you from any of your managerial obligations as set out in this agreement.

13. Nothing within this agreement shall be deemed to create a partnership or joint venture between the signing parties.

14. This agreement shall be governed by the laws of England.

Please indicate your acceptance of the terms hereof by signing and returning the attached copy to me.

Yours faithfully



Names and dated signatures of artist/s

Read and Agreed

Name and dated signature of the manager

 

 

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