The management agreement, explained
A management agreement sets out what the manager does, how long for, and how they get paid. The terms that matter most are the length, the commission and what it applies to, the power of attorney, and the exit. Here's what each one means. This is general education, not legal advice – have a lawyer review any contract.
Term
How long the deal runs. It’s often cited at 1 to 5 years, with around 3 a common middle, but the better modern structure is a short initial term plus renewals – say 1 year, with options to extend if the manager hits agreed goals (a label deal, a touring deal, an income threshold). That protects the artist if things stall and rewards the manager if they deliver. Watch for a long fixed term with no way out.
Territory and scope
Territory is where the deal applies – commonly worldwide, sometimes limited to a region early on. Scope is which parts of the career the manager covers: music only, or all entertainment (acting, books, a clothing line). Define it, because it sets what they commission. And remember what a manager is and isn’t: an advisor who runs the career and coordinates the team – not the road manager, the accountant, the publicist, or the booking agent.
The agent line you can't ignore
This one trips up new managers. In several states – California’s Talent Agencies Act is the big one – only a licensed talent agent can legally “procure employment,” meaning book work. A personal manager advises and develops the career but isn’t licensed to book gigs. A manager who books shows anyway can have the whole contract voided and be ordered to repay commissions. It’s why booking runs through a separate, licensed agent. The rules are state-specific, so know your state.
Exclusivity and power of attorney
Management deals are exclusive – the artist has one personal manager for the term, though the manager can manage other artists. The artist’s protection is a “reasonable efforts” obligation on the manager. Separately, the deal usually grants a power of attorney so the manager can act on the artist’s behalf – keep this limited to specific, named tasks. A broad or general power of attorney, handing sweeping control over money and decisions, is a red flag.
Commission, and what it applies to
The headline is the rate – typically 15–20% – but the fight is over the base: which income it’s taken on, on gross or net, and what’s carved out. That’s a big enough topic to have its own guide: what income a manager commissions. Expenses are usually reimbursed too – set a pre-approval threshold so big costs need sign-off.
The exit, and what survives it
Two terms decide what happens at the end. A sunset clause lets the manager keep commissioning deals made during the term, at a declining rate, for a while after. And a key-man clause protects the artist if they signed with a management company and the specific manager who championed them leaves. Get both right, and get a lawyer to review the whole thing before anyone signs.
Common questions
- How long is a typical management contract?
- Often cited as 1 to 5 years, with 3 a common middle. The modern trend is a shorter initial term (say 1 year) plus options to renew tied to hitting goals – a label deal, an income threshold – so the artist isn't locked in if things stall.
- Can a manager book my shows?
- In some states, not legally. California's Talent Agencies Act says only a licensed talent agent can procure employment – book work – for an artist. A manager who books gigs without a license risks the contract being voided and having to repay commissions. That's why booking usually runs through a separate, licensed agent.
- What should I never agree to in a management deal?
- A broad, unlimited power of attorney, an open-ended term with no exit, and a vague definition of what's commissionable. Keep the power of attorney limited to named tasks, cap the term, and get the commission scope in writing. And have a lawyer review it.