Hi, my name is Nick and this is my full guide on how to become an artist manager and set up management arm for your record label in 2023.
From Record Labels to Music Management
A natural progression for established record labels can be to move into the management of artists.
Likewise, managers can also move into label management, if they decide to set up and run labels for the artists they manage.
This is because these two areas of of the industry traditionally work very closely together, and are of mutual benefit to each other. As a label, if you sign a new release, when you come to promote and market the music, you need the artists to promote the release professionally as well.
Let me tell you a story of how I got into management.
I had been running a record label for about 2 years with my business partner at the time, and when an artist had a release coming out we found that in putting together that release, and needing to present them to the world in a professional way, we would end up writing their bio, arranging logos for them, press photos, and registering their music with PRS, as we knew all these things helped with making the music release a success.
I was then out at a music gig and was speaking to another record label manager about what we were doing, and he was like ‘I didn’t know you guys were doing music management.’
And I was like ‘ We aren’t’ and he was like ‘you are doing all the things a manager typically does. You should start doing it properly and charging for it too.'
So we set up Never Say Die Management, or NSDMT, and signed our first act Dodge and Fuski, which was the first of many artists we worked with.
Some artists we worked with we didn’t even sign to our label, but signed to other labels, but ultimately we helped grow their career so they could be full time music artists.
The other advantage for us as well, is that as music managers, if we got them an agent and they started getting gigs, we got a percentage of the live show fees as well.
As many artists had the potential to blow up after a successful release on a label, it was a way to capitalize on that success together, outside just record sales. It was a win-win for everyone.
So what does a Music Manager do?
Typically a music manager guides the artist's career, which is essential at the beginning of a career as they often have contacts and experience to help the artist get their first break in the industry.
I also like to say that the music industry is the only place where being the manager doesn't mean you're the boss.
In music, the artist is ultimately the boss, and I believe a manager’s job is to help them realise their dreams and aspirations.
In indie music, a manager wears many hats. You will be expected to be a little bit of everything and most importantly create opportunities for your artist's career.
Once a manager knows the artist's dreams and aspirations it’s their job to create a strategy and to execute that strategy. It’s about connecting artists to the right people to create an overall strategy in which the artist can easily follow.
It's about building the team around them such as finding a record deal or setting up their own record label, finding a publishing deal, finding a relevant PR team, and getting them signed to a good booking agency.
It’s also the manager’s job to have to make sometimes difficult decisions and also give the bad news that sometimes the artist doesn’t want to have hear.
Types of Music Managers
Managers come in all shapes and sizes. There is the manager that is very well connected and will often just introduce an artist to the right people to get the right deals.
There is a more hands-on or administrative type manager that ensures the day-to-day running of the artist career is done effectively.
With bigger artists there is often a business manager whose sole job to manage just the finances of artist.
For indie artists, usually the manager is all of these roles at once, often also including being the agent to book live shows when an artist is starting out.
How do Music Managers make money?
Managers usually takes a percentage of the artist's income. This typically ranges between 10 to 20% and is usually 15% for indie artists in my experience.
Often your run a initial six-month honeymoon contract to see if things are working out after which you can sign a full management agreement that will typically cover up to three years after which it goes on a one year rolling basis. That simply means if no party cancels to contact in writing, the same terms apply for another year.
AS well as individual music managers, there are Management Companies, which are typically a collection of music managers that work together with a roster of artists. Examples of these companies are UAA, Red Light Management, Q Prime, ATC, C3, and Big Noise.
The bigger ones are often part of a bigger talent agency that work with actors, sports stars, and celebrities, such as United Talent Agency, Creative Artists Agency (CAA) and William Morris Endeavor (WME).
Managing Artists as a Label
If you are starting a record label and will be signing new talent, you may find yourself managing the younger and less experienced artists when organising a release for them.
If you do find yourself in this position, you may want to formalise the management activities and create a management arm for your company.
Some people argue that having your management and label team as the same people under the one roof is conflict of interests, and when speaking about major label deals, yes I would tend to agree, but for indie labels, it can be an advantage.
You can make decisions quickly, and move forward an artists career quickly as there is no back and forth on emails where everyone is stirring the pot and adding their opinion because they think they have too.
If you do start managing artists it is important that you don't double dip. In a typical management agreement a manager takes, for example 20%, of all revenue an artist makes which would include record sales.
However if you own the label and thus already take a cut of record sales, then you don't take a further 20% from this, otherwise you are double dipping. Might seem obvious but still worth noting.
How do we set up a management company?
If you already have a label, the easiest thing to do is set up a brand name to trade under, such as Ersatz Records, you could set up Ersatz Management.
The next thing you need to do to agree to what your responsibilities are and what percentage of the artists income you will take for your services. The management contract will outline these details, so lets break down a management contract template to understand this.
Quick note: The term Talent is typically used in management contracts in the entrainment industry for artists, and we will use the words talent and artist interchangeably when discussing management.
Let's break down each section in detail.
Name and Date
As a label you collect these royalties when the sounds recording is played in interactive streaming services such as Spotify, Apple Music, Deezer, Tidal. These royalties are collected from your distributor.
Here is where you detail the legal names of each party the contract is between. The address is the physical address of each party.
For a solo artist you end it with ‘Talent’. If the artist has multiple members, you need to write each of the individuals full legal name and address here and then include the term ‘jointly and severally “Talent” at the end.
Type of Agreemeent
States what kind of agreement this is, which is a Management Agreement
If the artist you are signing is releasing music worldwide, the use the term World. If you are only signing for one country or territory, amend this section to the appropriate details.
This states that you are the exclusive manager for the artist in the entertainment industry and you are not responsible for managing activities outside this area, such as personal or private matters.
These outline the duties as a manager you will be expected to preform in the scope of your role as a manager.
They are a guide, and you may want to edit this to an artist particular requirements, for instance, if you will also be taking the role of an agent and arranging travel itineraries for live shows.
The duties you are required to perform should be reflected in your commission.
This section details what percentage of the artists revenue you as a manager takes commission on.
Depending on the size of the artist and which genre of the music industry they are in, will change this. Typically the range is between 10-20%.
There is also an allowance for a change in commission for when the artists income exceeds a set amount so management can share in a larger part of the income and acts as an incentive to reach this goal.
If commissioning on activities prior to signing Artist include the ”prior to” wording. For example, you would included this wording to cover income from music royalties on previous recordings that the artist has not been paid, and the manager will chase up for payment.
This section also states the non-commissionable income, typically revenue related to expenses and free gifts and services.
This section is sometimes called a ‘sunset clause’ and outlines the commission the manager receives if the manager and artist go separate ways, or the artist moves to a new manager or bigger management company.
It serves to protect the manager, for instance if the manager works on a big deal and the artist decides to move to a new manager just before signing the deal, the current manager still benefits from the work they have done.
The ’50% of rate paid’ means that any deals or revenue streams that the manager was part of during the term, the manager will receive 50% of the original commission post term. So, if the artist released an album during the term, and the manager was on 15% commission, then after the term, the original manager will receive half of that or 7.5% of the revenue for 3 years.
The three other sections state that any recordings, compositions and deals made prior to or within 6 months after the term ending are included in the post term. Again this is to protect the manager, so if the artist moves to new management and immediately signs a large recording or publishing deal, the manager benefits from this deal.
The post term clause is something that may have to be negotiated with the talent depending on what stage the talent is at in their career.
This states that as the manager you will collect all income on behalf of the talent and account to the talent every 3 months.
Sometimes, this maybe changes to every month, and if the talent has an accountant that invoices on behalf of them, you may have to amend this to reflect that arrangement.
This clause outlines the details of how the artist can audit the income statements of the manager or management company. This is rarely required between independent talent and managers but if it is required, a specialist accountant is usually assigned to audit the books.
Any expenses you a manger might incur fulfilling your duties can be reimbursed, for instance, paying for artists things like Uber, ‘flowers’, or a photoshoot. Any expenses above $500 needs prior approval before spending.
This states you can terminate the agreement if the talent is breaching the agreement and that you notified the talent of this breach and they did not remedy it within 30 days.
This clause states what the talent is expected to do in the role of the artist and in dealings with you as a manager.
In summary, the talent agrees they won't enter into any agreements that would interfere with the manager duties, the talent must be over the age of 18, and is responsible for their own taxes, that the talent will send any enquires or offers to you as the manager, they shall act professionally and turn up to gigs, interviews, and act in a sober manner, they will cooperate with the manager to advance their career, they will keep the manager informed of where they are when they will be available, they share all information about income sources, and that you as a manager has advised the them to take legal advice before signing the contract.
This clause is stating that if the talent did something against what they agreed in the warranties above, for example, trashing a hotel room, the manager has the right to be compensated for any costs associated with dealing with the issue, such as paying for the damage to be repaired.
The manager can hold back an amount of money the manager believes it will cost to cover dealing with an issue.
The first clause states that the manager can manage for than one artist. Next it states that as a manager you can assign this agreement to any entity you own or control, for instance if you created a specialist management company for a group of artists you manage.
The next clause states that the agreement is not a partnership, joint venture or contract of employment between the manager and artist. This is to prevent the artist claiming any legal rights that fall under any of these types of relationships, such as employment rights.
The next clause states that if some of the terms are held to be illegal or otherwise unenforceable, the remainder of the agreement should still apply.
For instance, if for some reason it became illegal to provide business advice to talent, it would not void the whole agreement. It would be deleted or modified and the rest of the agreement terms would still apply.
If the artist is more than one person as stated in parties section, then you need to include the clause ‘This Agreement shall apply to and bind Artist jointly and severally’. If the artist is only one person, then delete this clause.
The last clause states, that if either party wants to change any part of the agreement it has to be agreed by a written document that is signed by both parties.
The final clause states which country the jurisdiction of the agreement and if there is any disputes which court of law they will be settled in. Change this depending on the country or state your record label company is based.
The final section is for signing. Edit to state your record label name, your legal name, the artists legal name. If there is more than one member for the artist, then add each respective members legal name.
You can use this agreement template for your own management company, but remember, this has been used for educational purposes and should you use this example, we recommend to get a consultation with an attorney or lawyer to get a stamp of approval on your version the agreement before signing any deals with artists.
Okay, so now you should have a good understanding of why you would start a management company, what types of managers there are, the roles and responsibilities, and how you can start your own management arm of your business and managing artists yourself.
If you want a copy of this mamangement contract, you might want to join The Label Machine and get access to this contact and many other marketing and distribution tools for running your music career. Just check the link below.
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