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How Music Managers Get Paid: Commission Rates, Royalties, and Expenses

Navigating the music industry can be quite challenging and complex for artists. That’s where music managers come into play! Their role is crucial in helping artists grow their careers, secure attractive deals, and reach their full potential.

These professionals collaborate closely with their clients, taking care of various aspects of their careers. They’re responsible for tasks such as negotiating contracts and developing marketing strategies. It’s essential that artists understand how music managers are compensated, the percentage they receive from the artist’s earnings, and how to establish a successful partnership that benefits both parties.

a music manager and an artist discussing their partnership

A good music manager can have a significant impact on an artist’s career trajectory.

This article will provide an overview of music manager payments, their responsibilities, and tips for establishing a fruitful artist-manager partnership.

How Music Managers Get Paid: A Summary

Music managers primarily get paid through a commission-based system, receiving a percentage of the artist’s earnings. The standard commission rate is usually around 20% of the artist’s gross income minus some expenses. They may also earn royalties from the artist’s work, including record sales and placements in media. This compensation method allows music managers to sustain their services and be fairly rewarded for their contributions to the artist’s success

What are the roles of a music artist manager:

Music managers typically have many responsibilities, which can include the following:

  1.  Developing and implementing marketing and promotional plans
  2. Negotiating deals with record labels, producers, and other industry professionals
  3. Overseeing recording sessions and creating tour schedules
  4. Managing budgets, royalties, and contracts
  5. Networking with industry contacts to identify new opportunities
  6. Coordination of numerous parts of the artist’s career, including press queries, photo shoots, and public appearances
  7. Keeping abreast with industry trends and developments
  8. Identifying new business opportunities and potential collaborations for the artist
  9. Developing strategies to maximize social media presence and engagement
  10. Keeping detailed records of all activities related to the artist’s career

By handling these essential duties, music managers can help their clients achieve their career goals and enjoy sustained success in the music industry.

How Music Managers Get Paid

Do music managers get paid upfront?

Generally, no. Music managers don’t usually get paid upfront but are reimbursed for their work on a percentage basis. Some managers may charge an up-front fee for setting up contracts, negotiating deals, and other services that are not traditionally part of a manager’s job.

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Why Do Music Managers Get Royalties?

Music managers earn royalties as a crucial part of their income, ensuring they can effectively support and guide artists in their careers. Royalties acknowledge the managers’ hard work and commitment, contributing to their career progression. Typically, music managers receive royalties from record labels or publishers, and in some cases, they may be paid directly by the artists they represent. This compensation method allows music managers to sustain their services and be fairly rewarded for their contributions to the artist’s success.

It is vital to realize that royalties extend beyond record sales. When their artist’s song is featured in a television show, movie, commercial, video game, or other media, music managers may be paid royalties. This is especially true for global executives who can negotiate business across borders.

How many royalties do managers get?

The number of royalties music managers receive varies based on factors such as the agreement between the manager and the artist or label. In some instances, managers may fund the artist’s business expenses, like travel, to help them focus on creating music and promoting their career. This investment can lead to increased royalties for both parties.

In these cases, the manager’s share may be much larger, starting at 50% and potentially going up to 75%. Therefore, royalties are vital for compensating music managers for their work and supporting the artist’s success. To better understand the royalties your music manager will receive, discuss the contract terms before signing. This ensures a healthy, productive relationship and allows the artist to maximize their music career potential.

Do Music Managers Support Artist Expenses?

Music managers often do not fund artists’ expenses, although they may advise and provide guidance on managing finances. In general, it is the responsibility of an artist to cover their expenses. This includes paying for recording sessions, promotional materials, tour costs, and other fees that may arise while pursuing music-related goals.

In some cases, a manager may form relationships with investors or record labels who can fund an artist. In such cases, the manager may help negotiate a deal to benefit the artist and their financial backer. 

However, even in these circumstances, the artist is ultimately responsible for their expenses.

MUsic manager

What Additional Expenses Should An Artist Pay, Their Manager:

Besides the agreed-upon percentage of the artist’s gross income, managers may charge for specific expenses incurred on behalf of the artist. These can include:

  •     Administrative costs include filing fees and other paperwork related to signing a deal.
  •     Travel expenses, including plane tickets, hotels, and rental cars, to get the artist where they need to be.
  •     Marketing costs include radio promotion or advertising campaigns to promote the artist’s work.
  •     Legal fees related to contract negotiations, intellectual property protection, and other legal matters. 
  •     Accounting services and fees related to filing taxes and setting up a business entity.
  •     Other miscellaneous expenses include hiring a web designer or paying for photographer services.

Artists should be aware of these potential expenses and be prepared to cover them as part of their agreement with their managers. To avoid any confusion or disputes, it is essential to clearly outline these expenses in the artist-manager contract and ensure both parties agree on how they will be divided.

How Should a Music Artist-Manager Payment Contract Look Like?

A well-drafted music artist-manager payment contract is crucial for establishing a successful working relationship between the two parties. The contract should be comprehensive, encompassing all areas of the collaboration, and should include the following fundamental components:

  • The manager’s functions and responsibilities, as well as the services they will give, must be clearly stated.
  • The agreed-upon commission rate or payment structure for the manager, along with any additional expenses the artist may be responsible for covering.
  • The duration of the contract, including any clauses related to termination or renewal.
  • A conflict resolution process for addressing any disputes or disagreements that may arise during the partnership.

Dealing with disputes and conflicts of interest

The contract should have a game plan for handling disputes between the artist and the manager. This might mean outlining a specific process (like mediation or arbitration) or just requiring both parties to act in good faith to resolve any issues.

It should also tackle any potential conflicts of interest. For example, if the manager has some financial stake in projects that involve the artist, the contract should explain how these conflicts will be managed and resolved to protect both parties.

Review and renewal process

A well-thought-out artist-manager contract should include a way to review and renew the agreement. This could involve setting a timeline for checking out the contract terms, like once a year or after a project or tour wraps up.

The review process facilitates evaluation and adjustments to the collaboration, fostering clarity, minimizing disputes, and promoting a mutually advantageous partnership.

Wrapping Up:

Music managers are typically paid on commission, meaning they take a percentage of the artist’s earnings. This percentage can vary depending on the services provided and the artist’s success.

The music artist and manager should agree on what expenses will be charged and how these costs will be divided. The music artist needs to keep track of all fees and ensure they are not overcharged for any services. 

Furthermore, all expenses should be documented in the agreement between the music artist and their manager to avoid any potential disputes.

It is essential that any manager-artist agreement clearly defines how the manager will be rewarded as well as any additional terms.

Please contact us if you have any further questions about music managers.

Written By

Founder of Tunepical, a blog dedicated to sharing my love of music with you. I believe that music is the key to life, and if you're listening to the right songs at the right time, everything is possible!

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