Ausmusic; Excerpts by S.Simpson & C. Seeger's 'Music Business' (Warner Chappell)
2/11/2004
Every band is a business. Every business needs to be managed by someone. Early in a band’s career, it is a relatively simple matter to keep track of what’s going on business-wise. One member can book the gigs while someone else can organize the advertising and keep track of what little money is earned.
Eventually though as the band’s workload increases and more time is spent on administration, its members will have to decide whether they want to be musicians or managers.
“…The musician’s search for the perfect manager is never over. The Perfect Manager would be an amalgam of hard-headed business executive, snake oil seller, economist, Tangier rug trader, kick-boxer, parent, stand-in spouse, friend, confessor, psychologist, fall-guy, punching bad and stand-over merchant. He or she would also be on first name terms with all the big-hitters in the business in three continents, enjoy an independent source of income, love your music and have a bullet-proof belief in your future….” - Music Business
DO YOU NEED A MANAGER?
Bands often see managers as status symbols, a sign to the rest of the world that they are serious about what they do. The reality is that a band really doesn’t need a manager until they reach a point where they lack either the time or skill to cope with the band’s day to day business affairs.
The greater your band’s reputation and success, the easier it will be to attract a good manager. Friends and family are ok to help you along in the beginning but you really need someone who has solid music industry background and some accounting, marketing and legal skills, and healthy dose of common sense.
Very few people will have all of the skills a manager needs. Decide which skills are essential to you and look for someone who has a good grasp of these areas.
“Don’t commit to a manager too early. Many bands do not really need a manager when they start out. You need to realize that until you can attract a good manager, you may be better looking after your own affairs and instead retain a good accountant and a good lawyer upon whom you can call when needed…” - Music Business
HOW DO YOU FIND A MANAGER?
One thing to keep in mind is that managers make a living from commissioning your act’s income. While it is part of a manager’s job to increase the amount of work you do, a manager will be less interested in your act if they can’t see themselves making at least their operating expenses from your current income.
A potential manager will want to see that your band is working regularly and is serious about what it does. The band will need to have a stable line-up and have been working together long enough to show that they’re not about to break up and go their separate ways.
Once you’ve found a potential manger, ring their office to see if you can send a demo tape and bio. Once they have it, ring back to see what they thought. Try to make an appointment to see the manager in person. If they’re not interested, don’t give up. Keep sending updates and information. The object of all this is to convince the manager that you have the potential to be successful and make them lots of money. Use some common sense here. Keep them interested but don’t overdo it. Making a nuisance of yourself won’t get you a manager
THE MANAGEMENT CONTRACT
Being business people, managers will expect to have a written contract with you. The contract should contain certain clauses that set out the rights and responsibilities of both your manager and yourself.
The contract should specify the scope of the management deal. The manager will expect to be paid a percentage of any income you receive from industry activities covered in the contract. These activities could include recording, live performance, television appearances, song publishing and merchandising. Make sure that any industry activities that you want excluded from the contract are specifically written in.
As with your industry activities, the contract should also be specific about the territories (parts of the world) that the manager is responsible for. Most management contracts will be for the whole world, but if you have any doubts about their ability to handle your affairs outside a particular territory, it is acceptable to negotiate limits.
Most contract cover a period of three to five years. If you are a new act, it’s quite likely that the manager will make very little money from developing you in the first year or so. As a result, they will want to make sure that the contract not only covers this development time but a few (money making) years beyond.
The period the contract covers can be defined in three parts:
1. The Initial Period – This is most often one year. At the end of this time the manager has the option of terminating the contract or continuing it.
2. The Option Period – This is the period of the contract following the initial period. Typically this is for a further two years or so.
3. Continuation After Expiration – This clause will cover what happens when the contract expires. There may be an option to renew for another three years or it may continue on a six-monthly or even monthly basis.
WHAT DOES A MANGER DO?
The next part of a management contract will usually go into detail about the functions the manager has to perform in order to earn a percentage of the artist’s income.
A manager must use his or her best endeavours to procure suitable employment for the artist in a segment of the industry to which their talent is suited. The term ‘best endeavours’ is a key one in the management contract. No manager can guarantee to make your band an international success.
All the contract requires is that the manager do the best they can to find you work. Some managers will look for your gigs themselves but most will work with an agency for this.
A manager is also expected to negotiate contracts on your behalf. This means that they are able to commit you to contracts that you will have to honour. Make sure that the contract specifies exactly what the manager’s powers are and when you expect to be consulted about the deals being made.
Similar clauses need to be negotiated regarding the manager’s ability to arrange promotion and publicity. You may want to make sure that you have final say about any activities that reflect upon the band’s image.
Some managers will look after the band’s accounts but it’s more likely that they will pass the bookkeeping on to an accountant.
“…It is a fundamental part of the manager’s task to find the musician work which is suited to his or her talents and career direction…” - Music Business
THE MANAGERS COMISSION
Managers in Australia generally receive a commission of somewhere between 15% and 25%. It’s important that the contract specify what is classed as income. Unless you state otherwise, every payment you receive could be commissionable. This could even include things like complimentary CDs or other free gifts. Give some thought to the situations where you wouldn’t want to pay a manager a commission and make sure that the exclusion is written into the contract.
Normally the commission is payable on gross income. This is the income before any expenses are taken out. There are some expenses however that should be deducted before commission is taken. These include live performance costs, recording costs, merchandising expenses and booking agent’s commission
WHAT IF IT DOESN'T WORK OUT
No matter how carefully you make your choice, there is always a chance that you and your manager will come to a parting of ways. This is where a carefully drafted management contract can be of great help.
When the contract is being negotiated, make sure that there are clauses that specify exactly what will happen in this event. As mentioned before, the more details that you get on paper the easier it is to cope with disagreements later on.
In general, you can always get out of a contract with a manager. No court of law would ever force an act to work with a manager they didn’t want to work with. It’s almost certain however, that getting out of the contract will cost you money. It’s much better (and cheaper) to make sure that you have the right manager and a good contract to start with.
- Music Industry Info Sheets; produced by Ausmusic, with excerpts taken from the Warner Chappel Publication “Music Business” by Shane Simpson & Colin Seeger
