What is a sunset clause in a management deal?

A clause that lets a manager keep commissioning income from deals made during their term after the relationship ends – at a declining rate, for a set number of years. It exists because the manager built those deals; it's capped so the artist isn't paying an ex-manager forever.

How long does post-term commission last?

Usually a few years – commonly a 3 to 5 year taper – with the rate stepping down each year until it hits zero. For example, a 20% in-term rate might become 15%, then 10%, then 5%, then nothing. The length, rate and covered income are all negotiated.

Does a sunset clause cover new deals after the manager leaves?

It shouldn't. A fair sunset clause only commissions deals entered during the term – work the manager actually helped create. New deals the artist makes with a new manager should be off-limits.

Sunset clauses and post-term commission

A sunset clause lets a manager keep earning commission after the relationship ends – but only on deals made during the term, at a rate that declines year by year until it stops. It's fair to the manager who built those deals, and capped so the artist isn't paying them forever.

Why it exists

A manager spends years setting up deals – a record contract, a publishing deal, a brand partnership – that keep paying long after the management relationship ends. A sunset clause recognizes that: it lets the manager keep commissioning the income from deals made during their term, for a while after they’re gone. It’s reasonable – they built those deals. The point of negotiation is making sure it’s capped and fair.

The declining rate

A good sunset clause steps the rate down over a few years until it reaches zero, rather than paying the full commission indefinitely. A representative shape: if the in-term rate was 20%, the sunset might pay 15% in the first year after, 10% in the second, 5% in the third, then nothing. The taper is commonly around 3 to 5 years. Every number here is negotiated – the rate, the number of years, and which income streams it covers.

Only deals made during the term

This is the line that matters most. A fair sunset clause applies only to deals entered during the manager’s term – the work they actually helped create. It should not reach new deals the artist signs afterward, with a new manager or alone. Watch for language that quietly extends it to future income; that’s the artist paying an ex-manager for work they had nothing to do with.

The two sides of the table

A manager wants the longest sunset, on the most income, at the highest rate. The artist wants it short, declining, and limited to in-term deals. Neither is wrong – it’s a negotiation, and a sunset clause is a normal, expected part of a management agreement. The thing to avoid is signing one without reading it, then finding out years later that an old manager is still taking a cut of everything. Have a lawyer review it; this is general education, not legal advice.

Common questions

What is a sunset clause in a management deal?: A clause that lets a manager keep commissioning income from deals made during their term after the relationship ends – at a declining rate, for a set number of years. It exists because the manager built those deals; it's capped so the artist isn't paying an ex-manager forever.
How long does post-term commission last?: Usually a few years – commonly a 3 to 5 year taper – with the rate stepping down each year until it hits zero. For example, a 20% in-term rate might become 15%, then 10%, then 5%, then nothing. The length, rate and covered income are all negotiated.
Does a sunset clause cover new deals after the manager leaves?: It shouldn't. A fair sunset clause only commissions deals entered during the term – work the manager actually helped create. New deals the artist makes with a new manager should be off-limits.