"What is the standard term and commission rate of a management contract?"...

Q: What is the standard term and commission rate in a management contract? Also should a manager be allowed control of the artist bank account?

A: The term of a management contract can be determined in a variety of ways. It is in the interest of the artist that the term is as short as possible and vice versa for the manager. Generally the term of the contract is for a period of 3-5 years – however the term could also be determined by other methods such as album cycles, album sales, earnings etc.

The typical rate of management commission is between 15%-20% of artists’ gross earnings. This might appear unfair to the artist as the manager does not bear any of the expenditure incurred in earning this income. It is also possible to negotiate these rates of commission on net earnings i.e. earnings after expenditure. This is more ideal for the artist in that if the artist makes a loss, the manager does not get paid. As an artist has various sources of income it is possible for the manager to earn different rates of commission in relation to each different income sources.

With regard to the last part of your question, the manager should not control the artist’s bank account. Artists are well able to sign their own cheques and lodge their own receipts and, if they are fortunate enough, they can hire their own staff to do this. Management can invoice the artist for any expenditure they’ve incurred on the artist’s behalf – but under no circumstances should they be in control of the artist’s bank account.

All answers supplied by O.J. Kilkenny and Co. Chartered Accountants, specialists in the entertainment and music industry. You can contact them at [email protected] or call Michael McKenna (01) 661 1588