An artist management contract sets the commission the manager earns, the length of the deal, the scope of the manager’s authority, and the terms under which either side can walk away. The standard commission runs 15 to 20 percent of the artist’s gross earnings, initial terms usually land between one and three years, and every meaningful provision is negotiable before signing. The clauses below are the ones that decide how much the deal costs you, how long you’re bound to it, and what protections you actually have.
What the Manager Is Agreeing to Do
A personal manager guides the overall direction of an artist’s career: creative decisions, public image, evaluating business opportunities, and coordinating the rest of the team (attorneys, accountants, publicists, booking agents). The contract should spell out these responsibilities in concrete terms rather than vague language about “best efforts.” Look for a commitment that the manager will remain personally available and actively work to advance your career, not just field incoming offers.
The relationship creates a fiduciary duty, meaning the manager is legally obligated to act in your interest rather than their own. That includes a duty of loyalty (no self-dealing, no secret profits, no conflicts of interest) and a duty of care (competent handling of your business affairs). Because personal managers are largely unregulated in most states, the fiduciary obligation written into the contract itself is often the strongest legal protection you have. A manager who breaches that duty can be held liable for the resulting financial harm.
The Manager-Agent Boundary
One of the most consequential lines in entertainment law separates a personal manager from a licensed talent agent. An agent’s job is to find and secure employment: booking shows, landing auditions, negotiating recording deals. A manager’s job is to oversee the bigger career picture. Several states require anyone who procures employment for artists to hold a talent agency license, and crossing that line without one can void the entire management contract and force the manager to return commissions already collected.
A well-drafted contract acknowledges this boundary explicitly. It should state that the manager will not procure employment except as permitted by applicable law, and that any incidental procurement activity does not convert the manager into an unlicensed agent. Some states allow narrow exceptions, such as soliciting recording contracts, but the safer approach is to let a licensed agent handle booking while the manager focuses on strategy and oversight.
Commission Rate and How It’s Calculated
Most managers work on commission, earning a percentage of the artist’s professional income rather than a flat fee. The standard range is 15 to 20 percent. Some agreements use a sliding scale that rises as earnings grow: 10 percent up to one threshold, 15 percent on the next tier, 20 percent above that. The headline rate matters less than the basis the rate is applied to.
Gross Versus Net
Gross commission is calculated on total income before expenses. Earn $10,000 from a show at 15 percent of gross, and the manager gets $1,500 regardless of what the show cost you to perform. After $4,300 in travel, crew, and lodging, you keep $4,200. Net commission subtracts agreed-upon expenses first. On the same show at 15 percent of net, the manager’s cut drops to about $855 and you keep $4,845. Gross is the industry default. Net is negotiable but requires a clear, written definition of exactly which expenses qualify as deductions.
What Shouldn’t Be Commissionable
Not every dollar reaching the artist should be commissionable. Carve out income the manager didn’t help generate or that isn’t really income at all. Common exclusions:
- Money from deals signed before the management relationship began
- Tour support from a label, which offsets touring losses rather than creating profit
- Gifts and awards
- Income from non-entertainment work
- Songwriting and publishing income, unless the manager directly secured those deals
Without these carve-outs, the manager takes a cut of revenue streams they had nothing to do with.
Protection Against Double Commission
When an artist operates through a corporation or income passes through multiple entities the manager is affiliated with, the same dollar can get commissioned more than once unless the contract blocks it. A strong anti-double-commission clause states that regardless of how many related agreements exist between the parties or their affiliated companies, the manager’s total commission on any given dollar is capped at the percentage stated in the contract.1U.S. Securities and Exchange Commission. Management Agreement If the artist forms a corporation during the term, transfers between the artist and that entity should be excluded from commission calculations, since the manager already earned their percentage before those transfers.
Term Length and Option Periods
Management contracts typically run an initial term followed by option periods that let the manager extend the deal. Initial terms of one to three years are common, with options adding one year each. Exclusivity runs one way: the artist can’t hire another manager during the term, but the manager is free to represent other clients absent a conflict.
Options are where artists lose the most leverage. An unconditional option the manager can exercise regardless of results locks you in with no recourse. Better contracts tie each option to measurable benchmarks: securing a recording deal, hitting a specific income threshold, booking a certain caliber of engagements. Miss the marks, and the artist gains the right to walk rather than being stuck another year with someone who isn’t delivering.
Termination Rights
Every management contract needs clear exits for both sides. Termination provisions fall into two buckets: termination for convenience, where either party can end the deal with advance notice (typically 30 to 90 days), and termination for cause, triggered by serious misconduct or failure.
Standard grounds for termination for cause include:
- Material breach, where the manager fails a core obligation such as the duty to account for the artist’s earnings
- Abandonment, meaning the manager stops being involved in day-to-day management for a sustained period, often defined as 30 consecutive days2U.S. Securities and Exchange Commission. Artist Management Agreement
- Insolvency or bankruptcy, where the manager can no longer function as a viable business partner2U.S. Securities and Exchange Commission. Artist Management Agreement
- Fraud or criminal conduct, including self-dealing, embezzlement, or a felony conviction that makes continued representation untenable
Most well-drafted agreements require the complaining party to give written notice of the alleged breach and allow a cure period, commonly 30 to 90 days, before termination takes effect.2U.S. Securities and Exchange Commission. Artist Management Agreement That prevents either side from pulling the plug over a minor or fixable issue.
The Key-Man Clause
Artists often sign with a management company because of one specific person there. If that individual leaves, gets reassigned, or becomes unavailable, you may have no interest in being managed by whoever replaces them. A key-man clause gives the artist the right to terminate if the named individual is no longer personally involved for a specified period. Typical triggers include resignation, termination, death, disability, or criminal conviction of the key person. Without this clause, the company can hand you off to someone you never chose.
Sunset Clauses: Pay After the Deal Ends
When the relationship ends, the manager doesn’t necessarily stop earning. A sunset clause entitles the former manager to commissions on income from projects they helped set in motion during the term, at a declining rate. A typical structure pays the full commission rate in year one after termination, steps down in year two, and phases out entirely by year three or four. The percentages and timeline are negotiable.
Sunset commissions should apply only to clearly defined income streams: royalties from albums recorded during the term, revenue from sponsorship deals the manager negotiated, touring income from relationships the manager built. Open-ended sunset clauses that apply to all of the artist’s future income indefinitely are a red flag. The clause exists to compensate the manager for work that keeps producing revenue after the relationship ends, and to stop artists from firing a manager right before a major payday to dodge the commission. It isn’t meant to be a permanent tax on future earnings.
Power of Attorney and Spending Limits
Managers need to act quickly on routine business, so most contracts grant a limited power of attorney. This covers administrative tasks like signing appearance releases, approving use of the artist’s name and likeness for promotional materials, and endorsing checks. The word “limited” is doing critical work. The authority should be narrowly defined to cover routine administration, with explicit carve-outs requiring the artist’s personal sign-off on major decisions: recording contracts, licensing deals above a stated dollar amount, or any commitment extending beyond the contract term.
The contract should also cap the manager’s ability to spend the artist’s money without approval. A well-drafted expense provision restricts reimbursable costs to those directly tied to the artist’s career, sets a dollar threshold above which the manager needs written consent before spending, and requires receipts and periodic accountings. The manager’s general overhead, office rent, or staff salaries should not be passed through to the artist.
Audit and Accounting Rights
If the manager handles money on your behalf, the contract must let you verify the numbers. An audit clause allows the artist, or their accountant, to inspect the manager’s books and records relating to the artist’s income and commissions. Typical provisions allow one audit per calendar year, require advance written notice (often 10 to 30 days), and specify that inspections happen during normal business hours at the artist’s expense.1U.S. Securities and Exchange Commission. Management Agreement
The artist-friendly version shifts audit costs to the manager if the audit uncovers significant errors. A common threshold: inaccuracies exceeding 10 percent of what was owed trigger reimbursement of the artist’s audit costs up to a stated cap.1U.S. Securities and Exchange Commission. Management Agreement Without this provision, the cost of hiring an accountant can deter artists from ever checking the books, which is exactly why some managers resist the clause. For any artist generating meaningful revenue, this one isn’t optional.
Indemnification
An indemnification clause decides who pays when something goes wrong. In most management agreements, the obligation should run both ways: the artist indemnifies the manager against claims arising from the artist’s breach or misrepresentations, and the manager does the same for the artist.1U.S. Securities and Exchange Commission. Management Agreement That covers reasonable legal costs, court fees, and settlement amounts. Watch for one-sided indemnification that protects only the manager. If you’re expected to hold the manager harmless for their mistakes but they won’t do the same for you, the clause needs rewriting.
Dispute Resolution and Governing Law
Lawsuits are expensive, slow, and public. Most entertainment management contracts require the parties to try mediation or binding arbitration before filing suit. Arbitration keeps disputes private and typically resolves faster than litigation, which matters in an industry where public contract fights can damage an artist’s reputation and business relationships. The American Arbitration Association administers entertainment disputes through panels with industry experience.
The contract should also specify which state’s law governs and where any proceedings will take place. These provisions sound minor until a dispute arises and you discover you’ve agreed to litigate 2,000 miles from home under laws you don’t know. If you and the manager are based in different cities, negotiate for a neutral venue or at least one that doesn’t force you to travel for every hearing.
If You Use a Loan-Out Corporation
Many artists channel their professional income through a loan-out corporation, a company formed specifically to “employ” the artist and contract out their services. The label or promoter pays the corporation, and the corporation pays the artist a salary. The structure offers tax advantages and can shield personal intellectual property if the artist later faces financial trouble.
A loan-out changes how commissions flow. The contract should state that the manager’s commission is calculated on the artist’s gross or net income before it enters the corporation, so internal transfers between the artist and their company aren’t treated as separate commissionable events.1U.S. Securities and Exchange Commission. Management Agreement If you form a corporation during the term, the contract should require that entity to honor the existing agreement on the same terms. Without these provisions, the corporate structure can either inflate the manager’s commission through double-counting or let the artist shelter income from legitimate commission obligations.
What to Pull Together Before Signing
Both sides need specific documentation before finalizing the agreement. The contract requires legal names and addresses for the artist and the manager. If the artist already operates through a loan-out, that entity’s legal name and tax identification number go in too. The manager’s entity information matters as well, since many managers operate through their own companies rather than as sole proprietors.
Prepare a written list of pre-existing deals and income streams to exclude from commission: recording contracts, publishing deals, or sponsorship arrangements already in place before the manager came on board. Those typically fall outside commissionable income unless the manager renegotiates or extends them. Identifying these exclusions upfront heads off the single most common commission dispute, which is the manager claiming a cut of revenue from work they had no part in creating.