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Tuesday, May 24, 2011

Contractual Terms


All this means is the period of time that the manager works for your band. If you are the band you want to make it as short a term as possible, if your the manager you want it as long as possible. The trend over the last few years is for the managers to have terms geared specifically for what we call album cycles, as opposed to a specific number of years like say a professional athletes contract. Am album cycle just means
a period of time from the commencement of recording an album until the end of the promotional activities surrounding the album. This includes a tour, as well as promotion of all singles from the album. When making your own music, a management term geared to album cycles is fairer  to the manager that you have hired. If the term is simply a period of years, it could get locked out of commissions after he or she has done most of the work. You as a band must be careful in negotiating the term of a management deal. Many artists and bands have lived toe regret being wrapped up in long-term contracts with simply lousy managers. If both parties are happy with how things have worked out then extending the term contractually is fine.

     The most common compromise is to say that if the band or artist doesn't earn a minimum amount of money, he or she can terminate the agreement if stated in the contract. As a band, you need to be realistic when you are a fresh band and are just starting out. You just don't blow up over night. This is a very rare occurrence. If you are a heavy touring band playing big venues, the numbers will be much higher than if you write folk songs and sing in coffeehouses. Coffeehouses don't pay the bills. I have here an example from a beginning rock artist's contract: The deal is for one album cycle, and the manager could renew for an additional cycle if the artist earned say $200,000 over the first album cycle. The manager has the power to renew on a third cycle if during the second cycle the band has earned more than the $200,00 from the first cycle. This theory is that you can't refuse to work and then get out of the deal because you didn't earn enough. This is just protection. Another approach is to use the albums sales figures, instead of overall dollars, as the factor. For example, you could terminate the deal if you haven't sold x number of albums by the end of the second album cycle. The sales level varies with the type of artis involved in the deal. If you are a commercial artist(mainstream), you want a fairly high figure. But if you are more off center and want to build slowly, the figure would be much lower. This does not usually occur until the second or third term as the manager can argue that the very first album is just the beginning of the building process. Some recent deals I have seen figures for 100,000  albums for a alternative band, and a figure for 250,000 albums for a
straight-ahead, commercial artist. Termination for failing on number agreed by both parties can be done two ways. One is a letter from the artist or band members to the manager containing legal terminology saying that "you are fired." The other is a shorter deal that continues if that artist or band achieves certain earnings in a specific cycle.  If the manager has satisfied the criteria, the deal continues. It's to your advantage to keep the continuation period as short as possible-say one more cycle with a sales criteria, the deal then continues.

Earnings After The Term

One of the most crucial points you have to negotiate is what your manager gets paid after the end of your deal. This means even after he or she is terminated if necessary. Even though the term may end after a few years, virtually every management says the manager gets paid on earnings after the term that are generated.
Contracts entered into or substantially negotiated during the term. This means two things:

1. As to the record made during the term of the management deal, the manager gets a commission from sales of these records occurring after the end of the management deal.

2. The manager is paid on records made after the term of your management deal. Records that are recorded under contract signed during the term but after the manager has gone.

This is a lot of information that bands should be aware of. This is my post for today and I will be back for more. Click here for recording at home and making your own music.