Ever notice how some bands seem to navigate their way to the top, while others with the same level of talent stagnate or go nowhere? Once your band is established and gets regular gigs at popular venues, a manager or management team becomes essential. I have seen bands tread water only because their members refused to allow a knowledgeable insider to steer them in the right direction.
Any person hired to take on the role of manager should have the requisite amount of knowledge, experience, and connections in the business. His or her role is to assist in crucial (and mundane) decisions impacting your career; assist in the creative process; promote your band; put together a competent and experienced team of professionals including lawyers, business managers, agents, promoters, etc.; coordinate tours; ride herd on the record company; and deal with the public.
The need for a manager will become apparent once the ability to perform the duties outlined above exceeds your available time and expertise. You want to concentrate on making music, not finding lawyers to correct bad deals, or making sure the vacationing bass player is replaced by a responsible and competent professional. I guarantee that once a band achieves a certain level of success, the available time to perform these important tasks will be diminished accordingly.
The manager does, however, need to be paid, and there are several ways this occurs. Managers typically receive 15 or 20 percent of the band’s gross income. In this economic climate, however, you may be able to negotiate this fee to 15 percent, with an escalator clause increasing the compensation once a specified period of time elapses or a certain level of gross income is reached. You should realize that in entering into such a deal, the manager gets paid “off the top” and in some cases may actually end up earning more than you or your bandmates. An alternative arrangement is to reduce the percentage once a larger gross income is reached, or in some cases, a manager’s compensation is tied to the artist’s, or band’s net earnings. In other cases, the manager is paid differently depending on the type of income, i.e., paying on the gross for touring but net on record sales.
The idea is to make a management deal that suits your needs. You should avoid making a deal where the manager is guaranteed to make money, while you assume the risk of losing money. This can occur where your band’s income stream is not particularly consistent. In such a case, it may be better to tie the manager’s income to your net. If the manager receives a cut of the gross, he’s actually cutting into your net, which is not a desirable result if you have high expenses for travel, lodging, food, lights, sound, equipment rental, etc.
You and the management team should have a specific written agreement that sets forth all the terms that have been agreed to. And it’s highly desirable to have a lawyer review such an agreement.
In the next installment, we will discuss what expenses are customarily deducted from income before the manager’s share is computed. Until then, happy rockin’.
Robert S. Lewis, Esq., is an attorney with offices in Nyack, New York, specializing in bankruptcy, litigation, real estate, matrimonial, and entertainment matters. He is the past owner of a record label, and plays actively in several bands and open jams.