The Oracle: Managing your manager

A – Firstly congratulations on getting a publishing deal. Now you can hopefully focus on your strength, songwriting, while your publisher will now take care of business by finding people to use your songs, issue them with licences, collect the money and pay you, the writer.
Your manager is probably the most important person in your professional life and although you don’t tell me, I assume that you negotiated a contract with him at the beginning, covering all aspects of your dealings with him.
As a general rule there are three things to sort out with any manager in the beginning:
Compensation
Exclusions
Deductions
Compensation is the percentage of your earnings that your manager receives, which should be somewhere between 15% and 30% of your gross earnings. Managers will want more and you will want to give them less and somewhere in the middle is a compromise but this is the biggest issue facing you and your manager. A related matter is whether he gets his commission on your gross or net earnings. The latter is more preferable as he won’t get paid if you lose money.
Exclusions will limit the income that your manager gets his commission on. The most common exclusion is that a manager only gets commission on deals he brokered or had an input. So if you are a songwriter and you hire a manager to get you a recording deal I wouldn’t expect your manager to get any commission on your publishing or writing income. Equally if you exclude a part of your income from his commission, then you cannot expect him to work on this area.
Your manager should only get commission on the deals he brings to the table. If he had any input into getting you this publishing deal, he is entitled to his 20% commission on any advance you get from this deal and any royalties generated by it. If he had nothing to do with getting this deal then you have a good case for paying him nothing but read the terms of your management contract to confirm this. If you don’t have a management contract and he had nothing to do with getting the deal, I suspect you still have a good case for paying him nothing.
It is evident from you situation that one of the most important points you have to negotiate with your manager at the very beginning is what he will be entitled to receive after the end of his term of management. Virtually every management contract I have even seen states that the manager will get paid commission on your earnings after his term of management if these earnings are from “contracts entered into or substantially negotiated during the term” of his management.
“Sunset clauses” are a way of restricting this type of thing but again they should be inserted into your management contract from the beginning. Some of the types of “sunset clauses” you could incorporate into your contract are:
- he is only paid on songs recorded and released during his term,
- he is paid half of his commission on songs recorded during the term but released after the term,
- he is paid half of his commission on songs written during the term but recorded afterwards.