Ep. 5 getting paid as a music manager

This episode covers

  • Standard music manager commission arrangements

  • Flexible arrangements for manager commissions

  •  Manager earning potential

 

Podcast refocus 

  • This podcast is for music managers and artists that manage themselves 

  • The focus now is a level aimed at music managers at the beginning of their career, moving into professional music management and independent self managed artists

  • Show notes for each episode can always be found in the blog section of the webpage

  • The community around the podcast can be accessed on Facebook via this private grouphttps://www.facebook.com/groups/203046050291638/

 

Standard commission arrangements

  • As a managers income is directly linked to that of the artists. What you make as a manager is also a direct measure of your success in supporting them

  • The core tasks as a manager are to provide advice on all aspects of an artist professional life, use relationships to generate opportunities, negotiate deals when those opportunities arise and help artist select other members of their ‘team’

  • The standard commission arrangement for managers is 20%

  • Traditionally it is 20% of gross income of the artist 

  • Gross is income before any expenses

  • The income paths include royalties, performance, merchandise, publishing and sponsorship

  • Whilst 20% is the standard arrangement commissions can vary from 10 % - 35%

  • The scale normally slides depending on how established the artist is. So more high earning artists are more likely to negotiate a lower management percentage

  • For example if an artist makes £1 million and as a manager you get just 10%, this is a far greater amount that 25% of the income from an artist making £5,000 in a year

 

Working with developing artists

  • For ideas on increasing an artists income see episode 4 of the podcast

  • There are some things to consider when applying the 20% commission to an emerging artist 

  • You need to start by looking at how the artist makes their money – e.g. live performance, merchandise sales

  • ·     You could then put different percentages on different income streams with the highest on the one that makes the most money

  • ·     It can be a very unfavourable term to deduct a management commission from an artist’s gross income, this could end up leaving the artist with very little which could impact on long term relationships and sustainability for the artist to pursue their music

  • ·     Another option is to take money from income after agreed reasonable expenses agreed between artist and manager

  • ·     For example:

Income from a tour  

Funding award = £2000

Performance fees for 10 dates = £1500

Merchandise sales = £300

Total income = £3,800 income

 Costs

Manager commission from gross = £760

Musician fees - £1700

Accommodation - £700

Travel - £200

Food - £300

Tour promotion - £50

Total Costs = £3,710

 

Artist takes home = £90

 But if you agree reasonable expenses to be travel and accommodation the sums could look as follows from an income of £3,800

 

Costs

Travel – £200

Accommodation - £700

Manager’s commission after travel and accommodation deduction - £580

Musician fees - £1700

Food - £300

Tour promotion - £50

Total Cost = £3,530

 Artist takes home = £270

  • There is also an option for a sliding percentages for commissions on gigs

  • If between the two of you, you can agree the ideal amount for a gig fee say for example £600 then for £550 and more the commission could be 20% and for under £550 the commission could be 15% 

  • Then the artist knows the incentive you have to negotiate a good payment for them too

 

Physical albums and merchandise sales

  • It may not make sense for a manager to seek 20% of these sales when they are very small

  • For example invoicing or chasing your artist for 20% of sales at gigs that total £100 across a month could be more work than it is worth

  • One method could be to take a set fee for running the merchandise stall which wouldn’t necessarily be at every gig but at select ones

  • A better way at the beginning stages would be to negotiate a share of royalties 

  • An easy way to do this is to register with the collection agency and have the artist to agree to allocating you a percentage of the royalty payment

 

Working with third parties

  • There are agencies and individuals that artists will work with that will work on a commission basis too

  • These include publishers and booking agents and even labels

  • I would say that again you should look at what the amounts are, what the guidelines are and what you have bought to the table when setting your fee 

  • So if you negotiate a publishing deal and there’s an advance then it’s fair to take your management percentage if that’s 20% 

  • But if for example there is an arrangement with a booking agent for live performance who may typically take 5 – 10 % 

  • Then again depending on the overall income the options could be to have a mirrored percentage so between 5 – 10 % too as your management commission

 

Management contract

  • It’s a good idea if you are taking commission that is different on different income streams to have it agreed and written down

  • This can be in the form of a contract

  • And in terms of agreed cost that can be deducted before you take commission that should also be agreed in advance

 

The sunset clause (the music managers pension)

  • While we are talking about contracts and the payment element I want to mention what is referred to as the sunset clause

  • This is the payment managers receive after the term of the contract ends

  • An example: During the 18 month contract the manager gets 20% of the artists income. Following the end of the contract, in the first year the commission is reduced to 15%. At this point the artist may be paying two management fees if they have a new manager in place. For the second year after the contract ends then the commission is reduced further to 10%, and to 5% for year 3 and 2.5% for year 4 until finally 0% in year 5 and onwards

  • Another way to ensure that you are paid for your work in an artist’s development is by negotiating that percentage of royalties that we spoke about before

  • As the artist continues to be more successful this can increase

 

Profiling some successful music managers

Name: Scooter Braun

Roster previous and current: Justin Bieber, Ariana Grande, Martin Garrix, Psy, Carly Rae Jepsen, Dan & Shay, Zac Brown Band, Kanye West and Tori Kelly

Net worth: $23 million dollars working in music management and as a label manager

 

Name: Debra Antney

Roster previous and current: Nicki Minaj, Gucci Mane, OJ Da Juiceman, French Montana and Lex Luger

Net worth: $10 million as well as music management started her own label

 

Name: Jeanette Lee

Roster previous and current: The Cranberries, Pulp, Duffy

She used to be a musician,  but now as well as management is a label executive and co –owner of Rough Traddead filmmaker. Roster has included The Cranberries and Pulp, Duffy. I could not find out about her net worth but the Beggars Group of which Rough Trade is a family label and owns 50% announced over £70 million of profits last year.

Extra resources

Thirty Plus One podcast facebook group - https://www.facebook.com/groups/203046050291638/

PRS website -  https://www.prsformusic.com

 Subscribe/rate podcast - https://itunes.apple.com/gb/podcast/thirty-plus-one-for-music-managers/id1360713614?mt=2&app=podcast