Music Management Contracts: Standard Terms, Commission Rates, and What to Negotiate

What a Manager Does (and Doesn't Do)

A music manager guides your career strategy, connects you with industry professionals, negotiates deals on your behalf, and handles day-to-day business decisions. They are not your agent (who books shows), your lawyer (who reviews contracts), or your accountant (who manages finances) — though they coordinate with all three.

The management relationship is arguably the most important business partnership in your music career. Getting the contract wrong can cost you years and significant income.

Standard Commission Rates

Industry standard: 15-20% of gross income

15%: Standard for established artists with significant income

20%: Common for developing artists where the manager takes a bigger risk

25%: Generally considered too high, though some managers justify it for very early-stage artists

The commission is typically calculated on gross income — before your expenses, taxes, and other deductions. This means if you gross $100,000 from a tour but net $30,000 after expenses, your manager takes $15,000-20,000 from the gross, not the net. You'd keep $10,000-15,000.

Key Terms to Negotiate

Commission Base — What's Commissionable?

Push to exclude:

Recording costs and advances (the money isn't "income" — it's a recoupable advance)

Tour support from labels (same logic)

Sound recording income earned before the management term

Income from pre-existing deals signed before the manager came on board (or commission at a reduced rate)

Sunset Clause

This is critical. A sunset clause reduces the manager's commission gradually after the contract ends. Without one, a manager could earn full commission on deals they negotiated for years after the relationship ends.

Standard sunset: Full commission for 1-2 years post-term, then declining by 5% per year until reaching zero. Some deals sunset to a floor (e.g., 5%) rather than zero.

Key Person Clause

If you're signing with a management company rather than an individual, a key person clause lets you terminate if your specific manager leaves the company. Without it, you could be stuck with a replacement you didn't choose.

Term and Options

Standard: 1-2 year initial term with 2-3 option periods. Options should be mutual or artist-only (not manager-only). Avoid terms longer than 5 years total.

Performance Benchmarks

Consider tying option exercise to measurable outcomes — minimum income thresholds, securing a record deal, or achieving specific streaming milestones. This protects you from a manager who isn't delivering results but won't release you from the contract.

Power of Attorney

Some management contracts include power of attorney, giving the manager the right to sign deals on your behalf. Be very cautious with this. If included, limit it to specific types of transactions and require written notice.

Red Flags

Commission above 20% with no corresponding services

No sunset clause

Manager commissions your recording fund/advances

Power of attorney without limitations

Term longer than 3 years without performance benchmarks

No termination rights for material breach

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