NARIP’s Art of the Music Deal Series Highlights
The Artist Management Agreement
Reported by Jenny Slafkosky
April 22, 2008
In an ideal world, the relationship between a recording artist and his manager is symbiotic and (relatively speaking) stress-free. But anyone who’s entered the stormy world of the music industry knows this key relationship is often where lightning strikes the most.
Photo (L-R): Manatt, Phelps & Phillips partner Eric Custer, Esq., NARIP President Tess Taylor and Greenberg Traurig’s Todd Cooper, Esq.
To take the shock factor out of the artist / manager deal, NARIP hosted a special session for an in-depth look at artist management agreements in Los Angeles on March 28, another segment in the association’s acclaimed Art of the Music Deal series.
In front of a packed house of budding artist managers, seasoned industry professionals and a sprinkling of artists, top music lawyers Eric Custer (Partner, Manatt, Phelps & Phillips) and Todd Cooper (Greenberg Traurig) staged a mock negotiation of a sample artist management agreement, highlighting the pros and cons of the deal from both the artist’s and manager’s perspectives.
With playful banter and serious argumentation, Custer (representing the artist’s side) and Cooper (advocating for the manager) guided the audience step-by-step through each clause of a typical agreement, pausing to share real-life anecdotes and examples of what can go right, and wrong, with a deal.
Define Success
Custer and Cooper agreed that what defines an artist’s success – from securing a major label deal to an expanded touring base to a clothing line sponsorship – can vary widely, and those differences can make or break a deal.
“Success really depends on what genre you’re in,” says Cooper. “Look at what kind of artist you are, that will dictate your benchmarks.”
Does success mean an RIAA certified gold record (unit sales of 500,000), or is a merch deal the pinnacle? Maybe grossing an annual dollar amount is the goal. By defining in writing what success means, both the artist and the manager have a goal to work toward – and a way to get out.
“If somebody truly thinks that he can take you to from a particular level on to that next level, then I would just try to define terms in writing and say, `Look, if these things don’t happen within the first couple years then we have the ability to terminate and walk away at that point,’” advises Custer.
Keepin’ It Legal
The place where most new managers trip up is in the booking of live engagements, notes Custer. Often well-meaning managers want to help their artists by using any “in” they might have – say by using a connection to secure a show at the Viper Room. But in California the Talent Agency Act, which was originally drafted for film and television, prevents managers from procuring employment for their clients – even from booking a single show. Through this legal loophole artists can dissolve a management agreement, and worse still, force the manager to disgorge any commissions – a huge blow for an act of good intent.
“It’s important to look at where a manager differs from a talent agent,” says Cooper. “Talent agents procure jobs, other than recording agreements, generally. A manager provides advice and counsel…there is generally a lot of overlap with what lawyers do.”
In California, talent agents are licensed by the state and therefore subject to regulatory compliance, while artist managers are not licensed.
So who gets the gigs for the artists?
“The band has to do it themselves,” says Custer. “Or, if you as a budding manager have the ability to help, and want to help, you can become friends with a licensed talent agent – as long as the agent is technically involved, you can assist him.”
On Your Side
In addition to explaining how to avoid potentially damaging loopholes like the Talent Agency Act, Cooper and Custer also laid out how to negotiate other important aspects of the agreement, including term length; loans, advances and expenses; commissions and continuing commissions if a manager and his artist client part ways.
As the role of the artist manager evolves in this competitive marketplace, the importance of having a well-negotiated artist management agreement is even more critical. As Custer notes, ideally, you want to carefully negotiate a deal and then put it in a drawer and never have to look at it again.
But in the event that lightning strikes, having a savvy deal can keep all parties from getting burned.
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An MP3 audio recording of the “Art of the Music Deal: Mock Negotiation of an Artist Management Agreement” seminar, including a PDF copy of the nine-page sample management agreement, is available in NARIP’s Store online. Click here to buy now.