So far we’ve discussed the issues involved in negotiating the manager?s compensation during the life of the contract. Another touchy subject that is especially close to the manager?s heart, is whether he will continue to get a commission on gross income earned by the artist after the contract has ended. Your response will probably be ?of course not!? After all, once the contract is over, neither party has any further obligation to the other. The manager shouldn?t continue to get paid when his isn?t even the manager anymore. He got paid enough when he was the manager. Besides, you may feel that despite the manager?s efforts, there comes a point when the band becomes somewhat established enough to sell itself with little help from the manager. So once the contract is over, there should be a clean break. No more ties.

Well, maybe not. During the course of the contract, and through the manager?s efforts, you may be fortunate enough to have signed some money-making deals. For the life of the contract, you earn money from these deals. As agreed, the manager gets his percentage and you keep the rest. But it may be that your money-making contracts will still be in effect for quite some time after your management contract has ended. Since you will continue to profit from a deal he helped you obtain, the manager may feel that he should also continue to profit even after the artist-manager relationship legally ends.

Consider another scenario. During the course of the contract, and through the manager?s efforts, you are fortunate enough to take part in negations for some money- making deals. But the final handshake on these deals may not take place until after the contract with your manager has ended. As a result, the money earned from these deals doesn?t start pouring in until after the contract has ended. Again, the manager will want to enjoy his percentage of the profits you are earning from a deal that had its genesis with the artist-manager relationship ? even after the relationship has legally ended. But before you agree to compensating your manager after the contract ends (after all, you?ve learned by now that there are two sides to every coin), consider yet another twist. If you enter into a contract with a new manager, that new manager will probably be no different from your former manager on the question of compensation. The new manager?s attorney will probably demand that the commission apply to every conceivable entertainment- related activity from which you could possibly earn an income. And this would include the money pouring in from deals your former manager obtained! You don?t need me to tell you that you wouldn?t want to be stuck paying two commissions on the same money.

Well, skillful lawyering can help straighten out this mess too. Remember the staggered commissions we discussed? A special schedule can be set up whereby the manager continues to get compensated after the contract has ended, but with the commission rates adjusting downward as certain income levels are reached. You may even want to try something like limiting this compensation to say three years after the contract has ended. If you can get your new manager to accept a staggered commission schedule on the moneymaking deals of your former manager, you can greatly alleviate the financial drain of paying two full commissions on the same income.

Conclusion:

If you?ve read this entire article, you?ll begin to appreciate how the negotiations can go around and around until everyone settles on a deal they can live with. Of course, there are many other aspects of the artist management contract that will be subject to negotiation. An issue may be made of as to who collects the income: the manager, you or maybe a third party like a business manager or accountant. Another traditional sticky point is the extent of the manager?s authority to sign contracts on your behalf.

There may even be some negotiating points that to you and the manager don?t seem crucial, but to the attorneys seem to mean everything. For instance, the attorneys may wrangle over whether all or some breaches of contract must be brought to arbitration rather than litigated in court. You may even find the attorneys considering which law applies to disputes arising from the contract. Will California law, New York law or some other state?s law apply? Perhaps it?s even a question of whether the contract is governed by American law or English law.

In fact, the personal circumstances surrounding any given artist management contract can be so unique, that I suppose the three big questions covered by this article may actually end up being among the easier things to negotiate for some artists and managers. A point that can be agreed upon in five minutes between an artist and a manager on one deal, may bring about a deadlock for another artist and manager in a different deal.

The point is that, unlike your musical instrument, studio or promotional plans, a contract is not something you should try playing solo or doing on your own. But with the professional help of an attorney, there is much room for creativity in the negotiation process to try protecting everyone?s best interests, especially on the difficult points like the time, the money or whatever it happens to be in your case. As you can see, the art of compromise expands the parameters of the socalled ?standard? contract.

About the Author:
An NYU Law graduate, Richard P. Dieguez has over 16 years experience in entertainment law.
He has represented hundreds of clients across the U.S. and several nations in music, film, television, publishing and other legal matters. Mr. Dieguez is also the founder of The Circle, a monthly music industry seminar held in New York City. More info on Mr. Dieguez and The Circle is available at RPDieguez.com

This entry was posted by Will Dayble on Monday, August 28th, 2006 at 10:15 pm and is filed under Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.