5 Things to Look For in a Management Deal

The most important member of our team is your manager, and the most important agreement you as a musician will sign is an Artist Management Agreement. Managers have never played a more important role in the music industry than they do today, and your manager will likely have a greater impact on your career than any other person on your team (besides Kurt Dahl).

Why? Because they are involved in every single aspect of your career, from touring to releasing records to publishing. Your manager is the person who coordinates things between your record label, publicist, booking agent, publisher, and promoters. They are the quarterback of your music career, and if you are ready to take the next step in your music career, you probably need one.

Here are 5 things to look for in an Artist Management Agreement:

1) How Long is the Term?

The shorter, the better for you as an artist. Almost all Artist Management Agreements come with an initial term, followed by one or more option periods. The shorter the term, the better for you as artist. If things are going great, you can always sign another agreement to extend things. But if your manager isn’t living up to your expectations, you’ll be able to cut ties sooner and find a better fit. The late, great David Bowie spent years in litigation (and millions in legal fees) because he fired his first two managers before the term was expired.

2) If You’re Not Making Money, Neither Should They

The Artist Management Agreement should allow your Manager to only make a commission on revenues actually earned by you. If you don’t earn any revenues in a given period, neither should they. If your potential manager is asking for a weekly/monthly/yearly fee, that is a definite red flag, for me.

3) How Much is Being Commissioned?

Managers commissions are typically between 15 to 20% of an artist’s gross income. Whether it’s 15% or 20% really depends on the level of the band and the bargaining power of each party. I’ve seen some net deals, but they are extremely rare. That being said, I always push for a net commission on merchandise. In other words, you get to deduct the costs of manufacturing, shipping and artwork before the manager takes a commission on merch revenues.

artist management agreement

4) What is Being Commissioned?

As important as how much is being commissioned, is what is being commissioned. Certain funds you receive should be excluded from your manager’s commission, such as money received from your label to make music videos or record an album, money received as tour support, etc. If you get FACTOR or Starmaker funding, does the manager get a cut? What about gifts or money from investors? The Artist Management Agreement should be clear on what can and cannot be commissioned.

5) Is there a Sunset Clause?

Related to the length of the term is the length of the post-term, known as the “sunset period”. This is a crucial aspect of any Artist Management Agreement. This is the period following the term where commissions are still payable to the manager, from contracts that he/she negotiated during the term. As with the term, the shorter the better, and the sunset commissions should be declining over time, hence the term “sunset”. I’ve seen deals where the sunset period never ends, and that’s a serious red flag. The sun should always set.

A bonus point: don’t take legal advice from the manager’s lawyer. Ever. This might seem obvious but it happens more often than you’d think, and would be totally unacceptable anywhere else besides the music industry. If your manager doesn’t want you to obtain legal advice on the contract, that is a major red flag. This could be the most important contract you sign in your career; get proper legal advice.

Final thought: the most important thing to consider before working with a manager is, what does your gut instinct say about the person? That’s as significant as any legal clause, and is where you should begin. All the negotiating in the world won’t leave you with someone you enjoy working with on a daily basis. Once that box has been checked, take the contract to an experienced entertainment lawyer, and create a deal that opens rather than closes doors for you.

Artist Management Agreement

New International Touring Tax Will Hurt Canadian Music Scene

touring tax

This week my inbox has been abuzz with emails from friends and industry contacts about the recent touring tax implemented by the federal government, and how the changes will impact the Canadian music scene.

What Does the Touring Tax Mean?

The touring tax requires that any venue with a primary business other than music (i.e food, liquor, etc.), which also books musical performers, must now pay an application fee of $275 per band member (and band member includes tour manager, sound person, roadie, etc.) when the venue applies for a Labour Market Opinion, or LMO. The LMO allows these ‘foreign workers’ to perform at the venue.

Prior to the changes, the fee was simply $150 per band member, maxing out at $450, and this fee was a one-time payment for the venue that allowed the band to enter the country, thereby allowing music venues across Canada to share the cost or book the act separately at no extra charge. It should be noted that if the application for a work permit is declined under the new system, the fees paid are non-refundable and must be paid again under a new application.

Why Was the Touring Tax Implemented?

The impetus for the touring tax was that certain Chinese mining companies started bringing in their own workers for projects in B.C., so the government attempted to remedy the problem through legislation. The idea is that foreign workers are too often being used as a source of cheap labour, and that drives wages down and contributes to the unemployment rate in Canada.

Employment, Social Development and Multiculturalism Minister Jason Kenney is the man responsible for the touring tax. Last week he defended the new tax, saying that “there is no fee that discriminates against musicians”, and that the change was made to “ensure (Canadians) get (first) crack at jobs”. The federal government added that the new processing fee applies to all temporary foreign workers, and not just musicians.

Who is Effected by the Touring Tax?

There has been some confusion over what venues would have to pay the fee. Let’s be clear: not all venues will be affected by the touring tax. Music festivals, large venues and any club dedicated to music exclusively are exempt from having to apply for work permits. For example, U.S. bands playing B.C. Place in Vancouver, the Air Canada Centre in Toronto, or the Jazz Festival in Saskatoon would not be affected here.

And therein lies the rub: it’s the musicians on their way up – that aren’t headlining stadiums or festivals around the country – that are being penalized by this touring tax. The bands that are driving across the country in a van, playing venues like Amigos in Saskatoon, the Vat in Red Deer, Cherry Cola’s in Toronto…the bands that will be the next Pearl Jam, Kings of Leon, Tragically Hip…these are the bands (and venues) that are being hit, before they can become the next big thing.

touring tax

What is a Better Solution?

What we need is an exception to be made to the touring tax, in the case of international touring musicians playing bars/clubs in Canada. Otherwise, the results will be crippling to the small to mid-level touring industry in Canada. These are the bands and venues that create a music scene in this country. This is where longstanding careers in this industry start. No musicians get to the top level (i.e. stadiums) without first passing through the mid-level. So what this government is saying is that in Canada, we don’t want any foreign musicians unless they fill stadiums or headline festivals.

Some have argued that this touring tax will help Canadian bands in a similar way that Can-Con requirements help Canadian musicians at radio.  I disagree. My band, for example, has made some of the biggest leaps in our career by opening for American bands (Buckcherry, Godsmack, etc.). Now maybe Godsmack and Buckcherry would have been playing the larger venues that are not subject to the new increase in fees, but maybe not. And that’s missing the point. The bottom line: the Canadian music industry does not operate in a bubble, and Canadian bands need the exposure and opportunity that comes with sharing the stage with American and European bands. If mid-size bands from around the world stop touring Canada (and the response thus far definitely points in that direction), not only will Canada suffer from a cultural/musical diversity perspective, but Canadian bands and the industry that supports them will suffer a major blow as well.

This is not to say that Canadian musicians can only become successful if they are included on the bill with international artists, but one cannot avoid the numbers: the Canadian music industry (like most Canadian industries) is one-tenth the size of that in the U.S., and a fraction of that in Europe as well. Simply put, we need international bands touring our great country. This creates demand at the venues, creates jobs for servers, bartenders, promoters, sound techs, opening bands, taxi drivers, etc.

So rather than creating more jobs for Canadians, I would argue that this touring tax takes away more jobs and revenue than it creates. And live music isn’t mutually exclusive. Just because Iron Maiden plays here doesn’t mean there will be no demand for Canadian power metal. Just because Pearl Jam tours here, doesn’t mean it will kill demand for grungy, Canadian rock and roll. When TOOL tours here, it doesn’t kill the stoner rock scene in Canada. Arguably, the opposite is true in each instance: these bands inspire others and help create and grow different music scenes throughout Canada.

This touring tax will kill the desire (and indeed the ability) for international bands to tour here. That takes away jobs, takes away revenue, takes away the culture that is spread when international bands tour this country. That goes directly against the intent of Mr. Kenney’s legislation, and goes against my vision of the music industry here in Canada.

Sign a Band Agreement Kids! Former Rolling Stone is stone broke

Mick Taylor

I was just sent an article from a friend you can read here about legendary multi-instrumentalist and former Rolling Stone Mick Taylor, who plays guitar and piano on two of my favorite Stones albums (Sticky Fingers and Exile on Main Street), among others. The article is a shocking and sad depiction of Mr. Taylor’s life, and the poverty-stricken state he currently finds himself in.

The article goes on to explain how this came to be, and how The Rolling Stones unilaterally decided to stop paying him royalties in 1982 based on advice from their new record label and publishing company, despite the fact that Taylor’s songwriting and musical contribution to some of the biggest Stones songs from this era is undeniable. Since then of course, the rest of the Stones have gone on to become multimillionaires and some of the most wealthy musicians in the world, and Mr. Taylor has received nothing.

If there ever was a real-life cautionary tale to sign a Band Agreement between you and your band mates, this is it! Go to the Resources page for more on Band Agreements and why they are so important. Had one been signed, Mr. Taylor’s entitlement to a portion of the songwriting and record royalties would be without dispute. As it stands now, his only hope is hiring a entertainment lawyer and suing, which will not be cheap. And because he is broke and the Stones so wealthy, getting this thing through court and to a decision will not be an easy task.

Rock and roll is a vicious game…