Management Contract Terms Every Artist Should Know
For Artists
Mar 15, 2026
Management contracts define the business relationship between an artist and their manager, covering commission rates, term length, duties, and what happens when the relationship ends. Understanding these terms before signing prevents surprises and protects your interests. The time to negotiate is before you sign, not after problems arise.
A manager can transform your career. The right partnership brings opportunities, organization, and strategic thinking you could not achieve alone. But that partnership is also a business relationship governed by a contract with real financial and legal implications.
Many artists sign management contracts without fully understanding what they are agreeing to. They trust the relationship, skip the details, and discover problems only when things go wrong. This guide explains the key terms you will encounter in management contracts and what to consider before signing. For guidance on whether you are ready for management, see When to Hire a Music Manager (And When Not To).
Important: This is educational information, not legal advice. Have an entertainment lawyer review any contract before signing.
Commission Rate
The commission is what percentage of your income your manager receives for their work.
Standard Rates
Industry standard: 15-20% of gross income from areas covered by the contract.
Lower rates (10-15%): Sometimes negotiated by established artists, for passive income streams, or for specific revenue categories.
Higher rates (20-25%): Occasionally seen with newer managers building track records or managers providing extensive services.
Gross vs. Net
Gross commission: Manager takes their percentage before expenses are deducted. This is more common and more favorable to managers.
Net commission: Manager takes their percentage after certain expenses are deducted. More favorable to artists but less common.
Example: A $10,000 show with $2,000 in expenses.
Gross commission at 15%: Manager gets $1,500
Net commission at 15%: Manager gets $1,200 (15% of $8,000)
What Income Is Commissioned
Contracts specify which income streams the manager commissions. Common categories:
Live performance income
Recording income (advances, royalties)
Publishing income
Merchandise
Sponsorships and endorsements
Sync licensing
Appearance fees
Negotiation point: Some artists negotiate reduced or zero commission on certain income streams, particularly pre-existing deals or passive royalties.
Term Length
The term is how long the contract lasts.
Initial Term
Common lengths: 1-3 years for the initial term.
Shorter terms (1 year): Less commitment but may discourage manager investment in long-term development.
Longer terms (3+ years): More security for both parties but more risk if the relationship does not work.
Option Periods
Many contracts include options for the manager to extend the term if certain conditions are met.
Structure: "Initial term of 2 years with two 1-year options."
Conditions for options: Often tied to performance benchmarks (income thresholds, release activity, etc.).
Negotiation point: Options should have conditions that benefit both parties, not automatic extensions.
Termination Rights
How can the contract be ended early?
For cause: Either party can terminate if the other materially breaches the contract.
Without cause: Some contracts allow termination with notice (30-90 days typical).
Key performance triggers: Contract may terminate if certain milestones are not met (no record deal secured within X months, income below Y threshold).
Term Element | Artist-Friendly | Manager-Friendly |
|---|---|---|
Initial term | 1 year | 3+ years |
Option periods | Mutual consent or performance-based | Manager's sole option |
Termination | Either party with 30-day notice | For cause only |
Scope of Services
What is the manager actually responsible for doing?
Typical Manager Duties
Career guidance and strategic planning
Seeking and negotiating deals
Coordinating with other team members (agent, lawyer, publicist)
Day-to-day business management
Advising on creative and business decisions
What Managers Do NOT Typically Do
Book shows directly (that is an agent's job)
Handle accounting and taxes (that is a business manager's job)
Provide legal advice (that is a lawyer's job)
Guarantee specific results
Key Man Clause
If you signed with a management company because of a specific person, a key man clause ensures that person remains your primary contact.
Purpose: Prevents you from being reassigned to a junior manager without consent.
Negotiation point: If your relationship is with an individual, not a company, ensure the contract reflects that.
Sunset Clause
The sunset clause determines what happens to the manager's commission after the contract ends.
How Sunset Works
Managers argue they deserve ongoing commission on deals they secured even after the contract ends. The sunset clause defines how this works.
Full sunset: Commission reduces over time and eventually ends.
Example: "Manager receives full commission for 1 year post-termination, 50% for year 2, 25% for year 3, then zero."
What Qualifies for Sunset
Typically, deals that were "substantially negotiated" during the management term qualify for sunset commissions.
Negotiation point: Define "substantially negotiated" clearly. A deal merely discussed is different from a deal signed.
Perpetual Commission (No Sunset)
Some contracts claim commission forever on deals made during the term.
Risk: A manager who worked with you for 2 years could commission income from a deal for the rest of your career.
Negotiation point: Always negotiate a sunset. Perpetual commission is unfavorable to artists.
Power of Attorney
Some contracts grant the manager limited power of attorney to act on your behalf.
What This Allows
Signing certain documents on your behalf
Making business decisions within defined limits
Accessing accounts or communications
Why It Matters
Power of attorney can be efficient (faster decisions) but risky (less control).
Negotiation point: Limit power of attorney to specific circumstances. Never grant broad, unlimited authority.
Exclusivity
Most management contracts are exclusive: you cannot have another manager during the term.
Geographic Scope
Some contracts are territorially limited. You might have a US manager and a separate European manager.
Negotiation point: If your career is primarily domestic, consider whether worldwide exclusivity is necessary.
Co-Management
Some artists work with multiple managers for different aspects of their career.
Example: One manager for recordings, another for live performance.
Risk: Commission stacking. If both managers commission all income, you pay 30-40% total.
Expenses and Reimbursement
Who pays for what during the management relationship?
Manager-Covered Expenses
Typically: office overhead, phone calls, basic administrative costs.
Artist-Approved Expenses
Travel, third-party services, promotional costs: usually require artist approval and come out of artist income (or are deducted before calculating net commission).
Negotiation point: Set spending limits that require approval. Prevent surprise expenses.
Red Flags in Contracts
These terms should raise concerns:
No sunset clause: You pay commission forever on deals from this period.
Automatic option periods: Manager can extend indefinitely without your consent.
Broad power of attorney: Manager can act on your behalf without limits.
Commission on pre-existing income: Manager takes percentage from deals made before they joined.
Assignment without consent: Manager can transfer your contract to another company or person.
No termination rights: You cannot exit even if the manager is not performing.
Before You Sign
Steps to take before signing any management contract:
Read the entire contract. Every word. Ask about anything you do not understand.
Have an entertainment lawyer review it. The cost is minimal compared to the financial implications of a bad deal.
Talk to the manager's other clients. Ask about their experience. Past artists can reveal patterns.
Negotiate. Initial contracts are starting points. Terms can be changed.
Consider the relationship. A fair contract with a bad manager is still a bad deal. Chemistry and trust matter.
For guidance on building your full team beyond management, see How to Build Your Music Team (And When to Hire). And if you want a system to keep track of agreements and responsibilities as your team grows, Orphiq for artists can help you stay organized.
FAQ
Is 20% commission too high?
20% is at the higher end but not unreasonable for developing artists or managers providing extensive services. Negotiate based on the value provided and your specific situation.
Can I negotiate a management contract?
Yes. Every term is negotiable until you sign. Managers expect negotiation. If a manager refuses any discussion of terms, that inflexibility may characterize the working relationship.
What if I do not have a lawyer?
Find one. Entertainment lawyers often work on reasonable rates for contract review. Organizations like Volunteer Lawyers for the Arts help artists who cannot afford representation.
Should I sign without a contract?
No. Handshake deals cause problems when relationships sour or money increases. A written contract protects both parties and forces clarity about expectations.
Read Next
Keep Track of Your Agreements:
Orphiq's team collaboration tools helps you track deals, team responsibilities, and timelines so nothing falls through the cracks as your career grows.