Artist Management Agreements and What Managers Earn, Control, and Owe

By Hank FasthoffJuly 6, 2026

A manager can influence every part of your career without owning a song or master. Your management agreement sets which activities the manager handles, which income supports a commission, how much authority the manager receives, and what happens to the relationship after termination.

A percentage alone won't answer what management costs. A 20% commission on gross touring revenue produces a different result from 20% after approved production expenses. The same rate can apply to one album, every entertainment activity, or income generated years after the manager leaves. You need the commission rate, commission base, term, authority, and post-term rights to fit together.

Managers and Talent Agents Perform Different Functions

Managers commonly advise you on career strategy, coordinate your professional team, help plan releases and tours, review budgets, develop business relationships, and participate in deal discussions. A booking agent or talent agent procures engagements. Your management agreement should define the manager's services without assuming that the title "manager" answers which activities the law permits.

California regulates the activity of procuring entertainment employment. Labor Code Section 1700.4 defines a talent agency as a person or company engaged in procuring, offering, promising, or attempting to procure employment or engagements for artists. Procuring a recording contract doesn't by itself trigger the chapter, and Section 1700.5 requires a license before a person can operate as a talent agency.

In Marathon Entertainment, Inc. v. Blasi, 42 Cal. 4th 974 (2008), the California Supreme Court held that the Talent Agencies Act applies to personal managers when they perform regulated procurement activity. The Labor Commissioner or a court may void an agreement for unlawful procurement or sever lawful managerial services from unlawful services, depending on the agreement and the facts. California also permits an unlicensed person to participate in negotiating an employment contract when acting with and at the request of a licensed talent agency under Labor Code Section 1700.44(d).

New York draws its own line. General Business Law Section 171 defines a theatrical employment agency to include a person who procures or attempts to procure engagements for an artist. Under that definition, management of entertainers falls outside the licensing requirement when seeking employment is only incidental to the management business. Section 172 requires an employment agency license, Section 181 governs contracts and related disclosures, and Section 185 governs fees.

Texas repealed Occupations Code Chapter 2105 and its talent-agency licensing program effective September 1, 2011. The Texas Music Office confirms the repeal. That Texas decision doesn't resolve whether California, New York, or another state's law applies when a Texas manager procures work there, represents an artist who lives there, or negotiates through businesses located there. Your agreement should assign procurement to properly licensed agents when a state requires one and require compliance with every law that governs the services.

Define the Manager's Services

You should identify the career activities covered by the engagement. Music management may include release planning, recording budgets, touring strategy, brand development, sponsorship discussions, publicity coordination, team selection, and communication with labels, publishers, distributors, agents, attorneys, and accountants. An agreement covering acting, writing, social media, merchandise, or other businesses should name those activities.

Service descriptions should identify what the manager must do without promising a chart position, record deal, minimum income, or other result outside the manager's control. You can require regular planning meetings, budget participation, reasonable availability, delivery of reports, and coordination with other representatives. You should also state that legal, tax, and accounting advice comes from licensed professionals rather than treating management as a substitute for those services.

You should define exclusivity with the same precision. A manager may request the exclusive right to manage specified entertainment activities while you keep the right to hire booking agents, attorneys, business managers, publicists, and other specialists. If the manager represents only your music career, the agreement shouldn't claim commissions or control over acting, a separate business, passive investments, or employment unrelated to entertainment.

Commission Rate and Commission Base

Music management agreements often propose a commission between 15% and 20%, although the market has no binding rate. Guidance from the Artist Rights Institute identifies 15% and 20% as common proposed rates. The percentage has limited meaning until you define the income to which it applies and the deductions allowed before calculation.

Suppose a tour produces $500,000 in gross receipts and requires $200,000 in agreed production, travel, crew, and venue expenses. A 20% commission on gross receipts equals $100,000. Applying the same rate after those deductions produces a $60,000 commission. A modified-gross formula can produce either result depending on which deductions the contract permits.

Your commission definition should answer when income becomes commissionable. Possible measures include money earned, money received, or money payable during the term. Each choice allocates late payments, uncollected amounts, refunds, chargebacks, barter, foreign-currency conversions, and income paid to an artist-owned company differently. You should prevent double counting when revenue passes through more than one artist entity.

Commissionable categories may include recording income, touring, merchandise, sponsorships, endorsements, appearance fees, fan subscriptions, sync fees, neighboring-rights income, and composition income. The manager's services and the negotiated scope should determine the list. A phrase such as "all entertainment income from any source" can impose commission on activities the manager never handled.

Exclusions and Deductions

You should separate artist income from money used to pay other people or produce the work. Common negotiations address recording funds paid to studios, producer royalties, featured-artist payments, co-writer shares, opening-act costs, booking commissions, venue charges, sound and lighting, tour transportation, merchandise manufacturing, sales taxes, refunds, and union payments. You should identify each permitted deduction rather than rely on "net income" without a definition.

Advances require separate treatment because the artist receives cash before the underlying income is earned and may never receive royalties after recoupment. The parties can calculate commission on an advance when received, calculate commission on the income used to recoup it, or use another formula. You should prevent commission on the same money twice.

You should address loans, capital contributions, and reimbursed expenses separately because cash entering an artist's account doesn't necessarily represent earnings. Preexisting catalogs, contracts, and businesses also require schedules. You should state whether the manager earns anything from agreements signed before the management term, renewals or extensions of those agreements, and revenue generated from assets created before the relationship.

Term, Options, and Performance

An initial term allows both sides to evaluate the relationship. Management forms use fixed terms, option periods, album cycles, and combinations of time and performance conditions. No single term fits every artist. A developing artist may need an early exit when the manager provides little attention, while a manager investing substantial unpaid time may seek enough time to benefit from that work.

You should identify who controls each option and what conditions permit an extension. You can condition a manager-controlled option on measurable results such as minimum commissionable income or completion of defined services. You should specify the measurement period, accounting method, excluded events, notice deadline, and effect of a missed condition. Vague references to satisfactory progress invite a dispute over whose satisfaction controls.

Put the agreement in a signed writing before services begin. Oral arrangements create disputes over scope, rate, deductions, and post-term commissions, and a statute of frauds may require a writing. In Texas, Business and Commerce Code Section 26.01 applies to an agreement that isn't to be performed within one year from the date it is made. Governing law and the agreement's termination provisions can affect that analysis.

Post-Term Commissions

You can use a sunset clause to state whether a former manager receives commission after the management term. You should identify the qualifying transactions, applicable income, declining rate, and ending date. A defined sunset can compensate a manager for agreements developed during the term without attaching the full management commission to the artist's career indefinitely.

Qualifying income should connect to a contract or opportunity the manager procured, negotiated, or substantially developed during the term. Merely introducing the artist to a person who signs a different deal years afterward provides a poor boundary. You should decide whether the sunset covers options, renewals, extensions, amendments, replacements, and catalog income under an agreement signed during the term.

Many negotiated sunsets reduce the commission in stages. The parties might use a percentage of the former rate during each post-term year or set a separate declining rate. The agreement should state whether termination for the manager's uncured breach eliminates or reduces post-term commission and whether the former manager receives commission after assigning the agreement to someone else.

Authority and Power of Attorney

A manager can receive necessary access to information and people through limited authority. You should state whether the manager can approve expenses, accept offers, instruct distributors, communicate with platforms, collect money, or sign documents. Silence can let ordinary conversations produce conflicting claims about apparent authority.

You should reserve final approval over recording, publishing, touring, sponsorship, merchandise, branding, budgets, and use of your name or likeness. If the manager can approve routine transactions, define the category and dollar limit. A third party should know when your signature or written approval is required.

You should limit any power of attorney to an identified act, require prior approval when practical, and set it to expire when the management agreement ends. A general power to sign contracts, borrow money, transfer intellectual property, settle claims, endorse checks, or control bank accounts exposes you to decisions beyond ordinary management. If a limited power allows the manager to sign a document after your approval, the manager should provide the signed copy promptly.

Expenses, Accounting, and Audit Rights

Managers incur travel, communication, promotion, and other costs. You should define reimbursable expenses, require written approval above a threshold, exclude ordinary office overhead, and set a periodic or annual cap. Receipts and a deadline for reimbursement requests prevent old expenses from appearing after termination.

If the manager receives artist income, you should require a separate account, prompt deposits, periodic statements, and payment within a stated time. Statements should show the source, gross amount, deductions, commission, expenses, and net payment. You should limit deductions from unrelated revenue to amounts authorized by the agreement.

You should set a usable audit period, provide access to supporting records, and allocate audit costs when an underpayment exceeds an agreed threshold. Record-retention duties should continue after termination long enough for you to review post-term commissions and tax reporting. You should also state who issues tax forms and who bears bank, wire, currency-conversion, and collection charges.

Conflicts and Ownership

A manager may also operate a label, publisher, production company, merchandise company, or brand agency. Each additional role can create another payment stream and another conflict. You should require disclosure of the manager's financial interest, your written approval, and separate terms for the related transaction.

When your manager acts on your behalf and subject to your control, the relationship may create an agency and the duties that accompany it. Texas law treats an agent as a fiduciary of the principal. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 200 (Tex. 2002), described an agent's duties to act for the principal's benefit within the agency and to account for profits arising from the relationship. The facts, governing law, and authority granted in the agreement determine whether an agency exists and the scope of those duties.

You should require loyalty within the agreed scope, disclosure of adverse interests, accurate accounting, confidentiality, and compliance with your approval rights. If the manager wants a producer fee, label interest, publishing participation, merchandise profit, or ownership in an artist venture, the agreement should require informed written consent before the manager receives that additional benefit.

You retain copyrights, trademarks, masters, compositions, social-media accounts, websites, domain names, mailing lists, and artist data unless an agreement assigns the applicable interest. Any ownership transfer requires its own grant and consideration. You should identify artist-controlled accounts and require the manager to return credentials, files, contacts, contracts, and financial records when the relationship ends.

When a manager advances money, you should use loan terms that distinguish repayment from commission and ownership. You should state the amount, approved use, repayment source, interest, security, recoupment, and priority. Combining an undocumented advance with a broad commission clause can leave both parties with different explanations for the same payment.

Key Person and Management Company Changes

When you hire a management company because of one individual, a key-person clause should name that person and define the required involvement. You can provide notice, suspension of obligations, or termination if that person leaves, becomes unavailable, or stops directing your account.

You should also address assignment and changes in control. Your consent standard should govern any transfer of the management agreement to a buyer or affiliate. If your manager works through a company, both the company and the individual may need obligations covering confidentiality, conflicts, authority, and delivery of records.

Termination and Transition

You should address expiration, mutual agreement, uncured material breach, missed performance conditions, key-person departure, extended incapacity, insolvency, unlawful conduct, and conduct that causes defined reputational harm. A cure period should fit the breach. Missing a payment may permit a short cure, while misuse of funds or unauthorized execution of a contract may justify immediate termination.

Your agreement should state what happens on the termination date. The manager should stop representing that the relationship continues, deliver records and credentials, provide a final accounting, transfer pending communications, and identify every transaction claimed under the sunset. You should direct payors and platforms to the correct accounts and preserve records needed to test any subsequent commission claim.

For a group, you should also address member departures, replacements, new members, solo work, and use of the group name. You should state how a departure affects the manager's commission rights, the group's obligations, and the departing member's post-term income.

Reviewing the Agreement as One Deal

You should read the service scope, exclusivity, commission base, term, options, authority, expenses, conflicts, and sunset together. A narrow commission exclusion can lose its value if the agreement imposes commission on the same income through an affiliate clause. A short initial term can provide little protection if unilateral options extend it for years. A limited service description can conflict with a power of attorney that permits the manager to act far beyond those services.

Your management agreement should identify what the manager must do, which income supports a commission, which decisions you retain, and how both sides separate their business when the relationship ends. Those terms determine the cost and control of management long after the commission percentage is negotiated.