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Hugh
Hugh, Composer, Producer and Performer
Category: Entertainment
Satisfied Customers: 59
Experience:  20 years experience in performing, studio sessions, producing, composing, entertainment management.
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Please review this contract and let me know if it seems fair

Customer Question

I am starting a music career. An entertainment company heard my music online and is interested in managing me. They have sent me a contract for my review and I wanted to know if it seems fair. Is there anything in particular here I should be concerned about? Is there anything I should request that they revise?

Below are the contract terms:


Dear Sir/Madam

I (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 music 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 inquiries connected with my (our) work in areas which 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 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 reasonable requests to undertake activities pertaining to my music 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 inquiries to you.

(d)To notify you of any changes in address or contact numbers and email and webpage addresses.

(e)All discussions-internal meetings and anything confidential should not be disclosed outside of the initial artist team. Without your approval.

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., will be your sole responsibility..

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.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 and 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 your 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, National Insurance, Corporation Tax and Valued Added Tax.

9.The Term of this agreement shall be 2 years from the Agreement Date with the provisions 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 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.

10.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 provide that such appointments shall not charge you from any of your managerial obligations as set out in this agreement.

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

12.The said named artist has thirty (30) calendar days to complete this agreement and return a notarized copy back to the said named management company.


Sole-Responsibilities by the Artist


•Artist expenses may incur charges such as copyrights which will then be the sole rights to the artist or co- ownership of. Artist website and/or domain name will be the sole ownership of the artist and his or her legal guardian. The artist is responsible for equipment such as musical instruments, microphones, CDs, cd players, travel expenses, food, lodging expenses, clothing, hair designs and makeup and other related supplies or materials the artist may need, unless any of the following is management team affiliated.
Submitted: 3 years ago.
Category: Entertainment
Expert:  Hugh replied 3 years ago.

Hello. Thanks for your question. I was an artist manager and I have an in depth understanding of these types of contracts. I am looking over it now. I will give you my thoughts shortly.


Thanks!

Hugh

Expert:  Hugh replied 3 years ago.

Ok. Here are some things that I have noted in this agreement that need to be addressed.

 

1) Management duties. This is often generalized in agreements, however you may want to add more specifics. "To use your best endeavors to promote and develop my career as a music artist and provide me with regular reports on your work." is not much to go on here. There is nothing of substance that relates to what they are going to do for you in relation to activities. Also, what will be the time frame on providing regular reports on work? Will it be weekly, bi-weekly, monthly? That needs to be outlined.

 

2) Expenses. It is customary for managers to get reimbursed on expenses, however you provide no "cap" or checks and balances when it comes to this. With this agreement, they could incur major expenses on behalf of you as their artist without any input or "permission" from you. You don't want to wake up one day and get a hefty bill for reimbursements. Obviously, you don't want to hinder their job....but you don't want them to go overboard either.

 

3) Commission. This section is a bit ambiguous. Not good for you. 15% "or" 20%? Which one is it? Needs to be one or the other, unless you have some specific income streams or income exceptions (such as losing money on a tour) that a certain commission rate is tied to. If you are talking about just the typical percentage, then that needs to be outlined. Is it 15 or 20....not either, or!

 

Also, net or gross? In parenthesis it states "gross or preferably net." Not good. This creates questions upon (God forbid) litigation. Again, which one is it? Gross or net? Now, this is a question in itself. That being said, there are typical deductions that are made BEFORE the manager's point deduction. These are as follows:

  • Recording expenses. Typically not commissioned.
  • Producer expenses. Usually not commissioned.
  • Production such as your sound or lighting expense.
  • Any tour support. This is usually paid out by a record company. This makes up for a "loss" in your income or revenue. Should not be commissioned.

 

Additionally, there are other areas you may want to reduce the commission on. Say you take a loss on your tour. Many managers won't take their commission. Also, some manager's take less commission on your songwriting income. There are many exceptions. You may just want to go with a general percentage, but nevertheless, the percentage that is commissioned should be specific and related to net or gross. It shouldn't be a random situation to be decided whenever.

 

Also, what is "live" work? (#8). What does this mean? Performance? The following sentence relates to commission on recordings and compositions. Very confusing. It also mentions "net" on live work. Previously, net/gross is used. Not well defined at all.

 

4) Commission after agreement. It seems that after the agreement expires, they still get 10%. Not sure of what? What are they getting 10% of? Maybe I'm missing something here. Also, for HOW LONG? Say you get into a bad deal with them. They get you a publisher or a recording contract...and thus you can't terminate the agreement early. You record and start gaining momentum. Once your agreement is over, they can keep collecting on money related to that record (note that records are defined as any recordings...CD's, mp3s...whatever). What is the definition of that? Don't know...could be anything related to the recording within the term.

 

5) Getting out of the deal in 6 months based on deliverables. This means that you can terminate the deal (from what it seems....no strings attached) if they don't' get you a publisher or record deal. Good for you in that you can get out of it fast, but here is the deal.

 

This used to mean something back in the day when signing to a record company might equal advancement. But, my concern is 6 months is a short amount of time to get a publisher or record company involved. Now, I don't know about their level of contacts (the manager), however you don't just want to sign with "any" publisher and especially a record company. They need to be reputable publishers and record companies that could do something for your career. Will the record company have distribution? And...what type of distribution? If it's just over the Internet....say like putting your CD's up on Itunes and CD Baby etc....big deal. You can do that. Don't commission your money away. Some managers mean well...but don't often make the best moves. And a publisher is worse. A publisher needs to have major contacts to get your songs out. If they don't....then they will also be making royalties off of the work you are doing. I've seen this play out time and time again.

 

There is far more to a record deal than meets the eye....the biggest is money. It takes a lot of money to promote a record. If you sign with a record company...how much of their marketing dollars are they going to put forth to help promote? This aspect and distribution are the biggest issues that define your success. You have to look at your career like a chess game. You always need to be looking forward...not just one move, but several moves ahead so you won't get burned.

 

7) Arbitration or disputes. This is not outlined. The procedure needs to be outlined.

 

Anyway...hope this helps. I was an artist manager for years. Currently I'm a consultant, producer, session player and composer.

 

Lastly, don't go to the management company for advice relating to this agreement. I highly recommend an ENTERTAINMENT lawyer as you say. They will be able to guide you. It's worth the extra expense, believe me. I'm sure they will concur with my points here...and probably offer a few more. I'm not an attorney....so don't take this information as such....this info comes from my experience in the industry.

 

If you like this answer, please ACCEPT, as that is how I get credit. We can continue the thread, if you wish. Also, bonuses are appreciated!

 

Thanks.

 

 



Edited by Hugh on 7/22/2010 at 4:00 PM EST
Hugh, Composer, Producer and Performer
Category: Entertainment
Satisfied Customers: 59
Experience: 20 years experience in performing, studio sessions, producing, composing, entertainment management.
Hugh and 4 other Entertainment Specialists are ready to help you
Expert:  Hugh replied 3 years ago.
Just saw that there was a term set on commission after agreement. 2 years. This relates to #4.
Expert:  Hugh replied 3 years ago.
Also, when in relation to #3...the expenses I speak of in terms of recording, producing, tour support etc. are usually "expenses" that are paid for by other entities, such as investors or record companies. Record or publishing advances are also an issue. That is controversial and often has to be negotiated.
Customer: replied 3 years ago.
Thank you very much for your input. I'll be sure voice these concerns and seek further advice from an entertainment lawyer. Thanks for your time and effort!

Brian
Expert:  Hugh replied 3 years ago.
Not a problem! Thanks for using JustAnswer. If you need me again, just put "FOR HUGH" in the subject line. Good luck.

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