Expert: Terrance Copley - 12/20/2008

Question
Hi.
Is it normal for a bands management to take a 20% cut of a their songwriting PRS?

Answer
The Average is usually 15-25 % now-a-days. Its used to be 10% and for some managers this still holds true. If they want 25% they had better be getting gigs and constantly promoting and seeking interviews, radio and a label for you guys. As the owner of Local Scene Records, I can assure you that this is all very important. He must work on image and artists development ect. The biggest thing of all though is all band members should write a contract with the manager as to terms and conditions.

Use this :
http://www.blues101.org/articles/contracts1.htm


Before You Sign a Music Manager Contract, understand that
A good music manager can be instrumental in the success of your band. Unfortunately, because your music career means so much to you, it is remarkably easy for a so called manager to come along and take you for a ride, especially if you are relatively inexperienced. Any contract you sign for any part of your career should be carefully considered by you, but perhaps none more so than your music manager contract. Before you sign, brush up on your music manager contract basics so you can be sure you are making the right decision. Keep in mind that this info is general in nature - your deal may be different.

Music Manager Contract Basics
There are a few basics to keep in mind about music manager contracts.

It Doesn't Have to be Complicated! - Especially if you're an indie band. Skip the fancy talk, and write a simple document that covers money, division of labor, and the length of the agreement.
It Should be Mutually Beneficial - Even if your manager has been at this longer than you, don't sign your life away for a crack at their expertise. A manager who really believes in you won't expect you to do so.
It Should be Signed in Good Faith - If you're looking for loopholes before you sign, or your manager is, there is a problem.

The Contract Term
The length of your agreement with the music manager is a good place to start. You will need to agree upon a term and a contract cancellation policy. A fair contract term is a one year agreement, with an option to extend the agreement at the end of the year if both parties agree. At that point, you can look at negotiating longer agreements, but a one year term is a good trial term for both parties. Be wary of giving the music manager options to extend without your agreement; if you do, you can be forced to stick with a manager you don't want.

A cancellation clause should let each party cancel the contract with notice.

The Job Expectations
What you expect your music manager to do really depends on where you are in your career. If you're a new band, your manager should be promoting your to labels, trying to get you gig, and generally trying to get things off the ground for you. If you're further along, your manager should be making sure other people are doing their jobs to promote your music. Simply be as clear as possible about what you need from a manager, and what they are willing to do. For instance, for an indie band, do you expect your manager to get merchandise made, or will the band take that on? Now is the time to get it all on the table.

The Management Fee
A standard management fee is usually around 15% - 20% of your earnings. Your manager takes a cut of proceeds from album sales, any label advance, and from the earnings from deals they have negotiated. Some do not get your money from your merchandise sales, your songwriting royalties, or from deals they have not negotiated (unless you have a prior agreement saying otherwise). Keep in mind that if you are a small band who hasn't started making an income yet, 15% -20% of nothing is still nothing. You may want to keep this earning potential in mind when you are nailing down the details of the job expectations.

The Manager's Expenses
Your manager should not be out of pocket for business expenses for promoting your band, but you need to reach an agreement on how expenses will work. You don't have to pay for your manager's phone costs or office costs, in most instances. You do have to pay for business trips your manager makes on your behalf and reasonable costs like taking a label rep out for drinks. The best way to handle expenses is to pay them at set times, i.e. once a month. The music manager should provide you with receipts for expenses. Include a caveat in the contract saying expenses above a certain amount must be cleared with you first.

Words of Caution
Music manager contracts can be very specific to your circumstances, and so the advice above is a guide and does not represent not hard and fast rules. The best thing you can do is be as clear and specific as possible, anticipating every bump in the road. If you're a small band, and your manager is going to grow with you, be sure to re-examine your agreement often to make sure it is still fair to everyone. If you already have a record deal in place and have a new manager coming on board, you should seek legal advice to make sure your interests are protected.

Contracts are an essential part of the music industry. Not only do they protect you as a band, they actually help things get done more efficiently. Musicians think of lots of great reasons why they shouldn’t bother with contract – especially indie bands. Have any of these ideas crossed your mind?:

I’m working with my friends, and I trust everyone implicitly. Why would we need a contract?
I’m too much of an artist for things like contracts. Contracts are for the guys in suits. I’m not doing this for money – I’m doing it for the love of the music.
Here are a few home truths about ideas like these:
Working with friends can be very difficult. When something doesn’t go right, not only is it frustrating professionally, it is frustrating on a personal level. Working together can destroy friendships.
You may not care about the money now – until you think that there is actually some money floating around out there that was made off of your music. When that happens, you’ll care, you’ll want your proper share and you won’t want anyone else taking more than their share.

Contracts are useful for all of these reasons. First of all, they let everyone know exactly where they stand. A contract spells out what someone’s role is, what their responsibilities are, and what they will be paid for their work. Contracts can truly save friendships – when you’re working with a friend, if a problem arises, you have your initial agreement to fall back on. There is no room for disagreements. Contracts also protect you and ensure you get everything to which you are entitled. Even if there really is no money involved now, there could be sometime down the line. Now is the best time to decide how that money will be handled and divided. Oh, and don’t fall for that old “I don’t care about the money” stuff. Artists need money, too. They need money so they can continue to make their art. Protecting your financial assets is an investment in your artistic vision, not a step over to the dark side.

But what about contracts between band members. Is that really necessary? Well, it could be. Who writes the songs in your band? Are there band members who do all of the creative legwork, and other band members who just show up and play? If you start to make money, do you want everyone to be paid the same, no matter what their role, or do you want the songwriter to make more money? What about money that goes into the band? Does everyone contribute equally? How and when will that money be paid back? These kinds of questions can easily be addressed by a contract; answering them now can save your from some pretty messy headaches down the line.

Hope this helps and good luck

Terry Copley
2007 Jazz Grammy nominee / band/ The Catz in the Hatz
A.S.C.A.P
Ceo
Local Scene Records
www.localscenerecordlabel.com