Every management agreement must do two things: it must protect the interests of the artist and it must protect the interests of the manager. This is what’s known as the “A and Z” of the agreement. The sections of the contract that specifically list what each party must do or is expected to do, can’t do or shouldn’t do, make up the rest of the agreement.

First and foremost, a contract should have a time limit on it, known as a “term.” A management contract is known in legal circles as a “personal services” agreement, and by legal definition, a personal services agreement can be no longer than 7 years. For those who may be wondering: there is no such thing as a lifelong contract. The courts have long ago ruled that holding someone to the terms of a lifetime contract is a violation of the 14th Amendment against involuntary servitude-- SLAVERY!

Some unscrupulous managers have tried this tactic on naïve young artists for the purpose of trying to control every facet of that artist’s life. When the artist finally wakes up and sues to get out of the contract, many years in some cases have already elapsed and that artist may have lost tens of thousands of dollars. Again, a contract—even with all the options and terms exercised—should not exceed 7 years. If, after 7 years, an artist is satisfied with the relationship with his manager, he simply re-signs for another SPECIFIED term.

Speaking of options…

Options are clauses inserted in contracts which allow the automatic renewal of the contract upon the discretion of the manager. This clause was initially bargained for by most management companies to allow the manager a safety zone of sorts to operate in. In the first few years of a relationship between an artist and their manager, there is an incredible amount of work to do by the manager on behalf of the artist: Publicity campaigns, photo sessions, setting up record and press tours, radio and TV interviews, etc.

This work, done with the hope of gaining more exposure—and more money-- for the artist, has no guarantee that any of it will be successful. If an artist, who has signed with a manager for 3 years, becomes restless after 2 ½ years because he is not a “superstar” and wants out of his contract at the end of the term, the manager may balk and state that the promotion work may still need a little more time and insist that the artist remain. If the artist is steadfast in his determination to leave, the manager may lose all the effort, money, and work he invested in the artist during the previous two and a half years if the artist is allowed to go.

This is where “options” come into play. A manager, who has wisely included this provision in his service agreement with the artist, can state to that artist that he is exercising his authority and keeping the artist under contract for another year (option periods are normally for 1 year) when the originally term up the agreement is up. These options force the artist to remain and allow the work the manager put into the act more time to pay off. Artists, however, should negotiate during the initial contract proceedings to limit the number of these options in their contract to no more than two.

A management agreement should specifically state who will be the person the artist is working with. As I mentioned last time, a manager/artist relationship can become very personal and not every personality is right with just anyone. An artist signing with a large management company, for instance, might become a face in the crowd unless it is explicitly written and agreed upon that he is to work with one particular manager and no one else. No members of the staff, no associates, no interns -- just the person he originally agreed to have represent him. If that manager becomes unavailable, the artist should have the option—written in his contract—to void the contract and seek new management.

Since managers exercise a great deal of control over the lives and careers of their artists, it would be wise for the artist to insert “brakes” of some sort over that control. There is an old saying that “power corrupts, and absolute power corrupts absolutely,” so it is smart to remind your manager, the one who controls every facet of your career—where you will work, how much you will get paid, under what conditions, etc.—that they are STILL your employee. Nothing brings this fact home as quickly as when you, the artist, demand accountability on exactly what the manager has done during the course of the contract.

The first item in this examination should be of money taken in and paid on your behalf. This is called an “audit” and as an artist you should have a contractual agreement to examine the financial records of the manager. Discrepancies in this area have sent many a manager away to become residents of the state for 10-20 years. To avoid any financial mishaps, artists should never allow anyone to sign documents, checks, or statements for them without prior written authorization.

Artists should also see to it that money owed the artist is put into a trust account and not allowed to be intermingled with the funds of the manager. This protects the artist’s funds in the event the manager declares bankruptcy or goes out of business.

Finally, in the event that an artist decides he wants to end his relationship with one manager and sign with another, the artist should ensure that he does not end up paying two managers at once. This odd situation happens when work obtained under the terms of the contract with the first manager, spill over to the new contract, such as a recording contract. Since the old manager is contractually owed a portion of the recording contract proceeds, there is no legal way around paying him off. An artist should, however, negotiate a sliding scale situation where over a period of time, the commission the old manager receives declines each year until the amount is zero.

As with all theses situations discussed, seek out competent and educated advice in determining which one is best for you.