PLAY EPISODE

This episode covers 

• Standard music manager commission arrangements
• Flexible arrangements for manager commissions
• Manager earning potential

Podcast refocus

• This podcast is for music managers and artists that manage themselves
• The focus now is a level aimed at music managers at the developmental stages of their career, moving into professional music management and independent self managed artists
• Show notes for each episode can always be found online
• The community around the podcast will now be in our members area online community and not on Facebook

Standard commission arrangements

As a manager's income is directly linked to that of the artist what you make as a manager is also a direct measure of your success in supporting them.

The core tasks as a manager are to provide advice on all aspects of an artist's professional life, to use relationships to generate opportunities, to negotiate deals when those opportunities arise and help artists to select other members of their ‘team’.

The standard commission arrangement for managers is 20%. Traditionally it is 20% of gross income of the artist. Gross is income before any expenses.

The income paths include royalties, performance, merchandise, publishing and sponsorship.

Whilst 20% is the standard arrangement commissions can vary from 10 % - 35%. The scale normally slides depending on how established the artist is. So more high earning artists are more likely to negotiate a lower management percentage. For example if an artist makes £1 million and as a manager you get just 10%, this is a far greater amount that 25% of the income from an artist making £5,000 in a year.

Working with developing artists

For ideas on increasing an artist's income see episode 4, season 1 of the podcast.

There are some things to consider when applying the 20% commission to an emerging artist. You need to start by looking at how the artist makes their money – e.g. live performance, merchandise sales

You could then put different percentages on different income streams with the highest on the one that makes the most money.

It can be a very unfavourable term to deduct a management commission from an artist’s gross income, this could end up leaving the artist with very little which could impact on long term relationships and sustainability for the artist to pursue their music.

Another option is to take money from income after reasonable expenses are agreed between artist and manager.

For example

Income from a tour:

Funding award = £2000

Performance fees for 10 dates = £1500

Merchandise sales = £300

Total income = £3,800 income

Costs

Manager commission from gross = £760

Musician fees - £1700

Accommodation - £700

Travel - £200

Food - £300

Tour promotion - £50

Total Costs = £3,710

Artist takes home = £90

But if you agree reasonable expenses to be travel and accommodation the sums could look as follows from an income of £3,800

Costs

Travel – £200

Accommodation - £700

Manager’s commission after travel and accommodation deduction - £580

Musician fees - £1700

Food - £300

Tour promotion - £50

Total Cost = £3,530

Artist takes home = £270

There is additionally an option for sliding percentages for commissions on gigs.

If between the two of you, you can agree the ideal amount for a gig fee for example £600 then for £550 and more the commission could be 20% and for under £550 the commission could be 15%. Then the artist knows the incentive you have to negotiate a good payment for them too.

Physical albums and merchandise sales

It may not make sense for a manager to seek 20% of sales from albums and merchandise when sales are very small. For example invoicing or chasing your artist for 20% of sales at gigs that total £100 across a month could be more work than it is worth.

One method could be to take a set fee for running the merchandise stall which wouldn’t necessarily be at every gig but at select ones. A better way at the beginning stages would be to negotiate a share of royalties. An easy way to do this is to register with the collection agency and have the artist agree to allocating you a percentage of the royalty payment.

Working with third parties

There are agencies and individuals that artists will work with that will work on a commission basis to. These include publishers and booking agents and even labels.

I would say that again you should look at what the amounts are, what the guidelines are and what you have bought to the table when setting your fee. So if you negotiate a publishing deal and there’s an advance then it’s fair to take your management percentage if that’s 20%. However, if for example there is an arrangement with a booking agent for live performance who may typically take 5 – 10 %.

Then again depending on the overall income the options could be to have a mirrored percentage so between 5 – 10 % too as your management commission.

Management contract

It’s a good idea if you are taking commission that is different on different income streams to have it agreed and written down. This can be in the form of a contract. In terms of agreed cost that can be deducted before you take commission that should also be agreed in advance.

The sunset clause (the music managers pension) is the payment managers receive after the term of the contract ends. An example: During the 18 month contract the manager gets 20% of the artists income. Following the end of the contract, in the first year the commission is reduced to 15%. At this point the artist may be paying two management fees if they have a new manager in place. For the second year after the contract ends then the commission is reduced further to 10%, and to 5% for year 3 and 2.5% for year 4 until finally 0% in year 5 and onwards.

Another way to ensure that you are paid for your work in an artist’s development is by negotiating a percentage of royalties that we spoke about before. As the artist continues to be more successful this can increase.

Profiling some successful music managers

Name: Scooter Braun

Roster previous and current: Justin Bieber, Ariana Grande, Martin Garrix, Psy, Carly Rae Jepsen, Dan & Shay, Zac Brown Band, Kanye West and Tori Kelly

Net worth: $23 million dollars working in music management and as a label manager

Name: Debra Antney

Roster previous and current: Nicki Minaj, Gucci Mane, OJ Da Juiceman, French Montana and Lex Luger

Net worth: $10 million. As well as music management she started her own label

Name: Jeanette Lee

Roster previous and current: The Cranberries, Pulp, Duffy

She used to be a musician, but now as well as working in management is a label executive and co–owner of Rough Trade filmmaker. I could not find out about her net worth but the Beggars Group of which Rough Trade is a family label and owns 50% announced over £70 million of profits last year.

Extra resources

PRS website - https://www.prsformusic.com

Subscribe/rate podcast - https://itunes.apple.com/gb/podcast/thirty-plus-one-for-music-managers/id1360713614?mt=2&app=podcast