Artist Manager
January 18th, 2009 by Lior ShamirTypically, an artist manager receives 15% – 20% of the artist’s Gross income or 50% of the Net income. I personally like the 50/50 model. 15% may not sound like a lot but keep in mind that the artist is responsible for expenses and if the artist is a four member band, you can guess who gets the biggest piece of the pie. The artist manager is often the primary reason why the artist sees any money in the first place. As such, a good artist manager deserves to be rewarded for his efforts, expertise, contacts and, above all, risk. Besides, 15% – 20% of the gross is often the same as splitting everything down the middle. In addition, the artist manager may negotiate a commission based on new deals he closed during the course of his relationship with the artist. This is to protect his investment long after the contract has terminated and he and the artist have gone their separate ways.
A no-commission management deal, whereby the artist pays an artist manager or management firm a salary or ‘retainer’, is a relatively new contract model in the music industry. The artist has the power to hire, fire and negotiate with his management. The artist manager has a certain degree of ‘job security’ but can not reap the rewards of a huge commercial success. No points. No success fees. Simple. And the artist is in control. This is similar to the way PR companies operate and charge for their services.
At the negotiation table, the terms of the deal, regardless of the type of payment model, should be in light of the degree of financial risk the artist manager is expected to undertake by the artist in the event that the artist can not pay upfront. Considering that financial institutions define the terms of a loan by assessing the degree of financial risk, it is reasonable to expect an artist manager to be compensated based on similar projections.