Posted on January 05th, 2023.

Coordinating the artist's team, overseeing complicated legal structures and keeping track of all the numbers, from social media and radio spins to cash-flows and revenue splits, is the routine that comes with running any successful music project.

However, while taking care of the day-to-day, managers must aim for the stars: building relationships, anticipating problems and developing long-term strategies. Working closely with all sides of the industry, they must be "fluent" in the music business – more so than any of their associates. Managing an artist means juggling dozens of hats at a time, and that is what makes it both fascinating and complex. That's why we've decided to dedicate this article in our series on how the music industry works to the fine art of artist management.

The diverse roles of the Manager can be broken down into the following categories:

Gatekeeper and spokesman
Team Architect
Artistic director
Administrator

What does an artist manager do?

The manager plays a unique role in the life of an artist. All other partners profit from the isolated components of the artist's cash-flow: the agent won't make money on streaming, nor will the publisher benefit from ticket sales. Managers, on the other hand, earn a flat percentage on all artists' revenues. The contracts are structured in that way for a reason — the influence that managers have over artists' careers is enormous, and that requires a complete alignment of interests.

1. Gatekeeper and a spokesperson

First of all, the manager is the public representatives of an artist. Managers reach out to partners and filter incoming offers on the artist's behalf. This part of the job involves taking a lot of small decisions, and most of the time the artists are not aware of them. Artists have to rely on the manager's judgment, so the relationships between them must be built on trust. A strong team mindset is the basis of any successful management deal, and that is why the manager is often the closest person an artist has aside from family and friends.

2. Team architect

The second responsibility of the manager is to build and coordinate the artist's team, made up of separate partners working on different sides of the industry. Each time the artists progress to the next step in their music career, management has to consider several key partnerships. Those partnerships are necessary to unlock new revenue streams. However, the range of possible offers and deals can be almost indefinite – so the choices have to be made.

Such decisions have a huge, lasting effect on the artist career. Most partnership deals are long-term and can have consequences years down the road — a standard recording deal, for example, is a 6 to 9 years commitment. It's the role of management companies to evaluate partnerships. However, the manager never has complete information, and the number of factors to consider can be overwhelming — so building an artist’s team is perhaps the most challenging part of music management.

3. Artistic Direction

Even when the artist has an A&R with their label or publisher, it is the manager who defines and coordinates music and video releases, tour strategy and live performance production. The manager is the last advisor to the artist when it comes to dealing with the A&R, and his role is to mediate the influence of all other partners.

The labels and publishers will often try to push the artist on the beaten path. Pressure from the A&R departments to "play it safe" can sometimes make it extremely hard to ignore the fear of failure and pursue the creative goals. However, maintaining one's vision and taking chances is an integral part of any art, so the managers often find themselves stuck in a risk vs. safety dilemma.

4. Administration and small things

The nature of the management is to keep things flowing. Managers take care of most of the daily administrative tasks, connected to running an artist's career. They do most of the cyclical accounting, handle monthly cash-flows and run the artist's micro-company. On top of that, managers always tend to fill the gaps. When the artist's career is still young, they program releases with distributors and pack up the gear on stage after the shows. Later on, they run the merch booth and organize video shoots. It all depends on the size of the team, which scales with the artist's career.

Here is where the labels, publishers and promoters come in. Traditionally, their role is to scale the team in anticipation of an artist’s success, and not as a consequence of it. The early stages of the artist career involves more costs than earnings, and funding in anticipation is key to building most careers. However, even if the team grows and managers take a more ‘managerial' approach as opposed to DIY one, the list of ‘small things' never dies ;)

3 Main Steps to Building an Artist Team

The core of the artist’s team consists of publishers, record labels, concert promoters and booking agents. The Artist Managers are the grand overseer of that whole team, and they are the ones getting that band together in the first place. Artist development and assembling the artist's team requires strong negotiation skills, strategic mindset and in-depth knowledge of the music industry, and, as we’ve mentioned before, it is probably the most important and risky part of the manager’s job.

To give you some perspective on how those “staff decisions” are reached, in the next section we will go through the key partnerships from the artist/manager standpoint.

1. Choosing a recording deal

Traditionally, the label has been the team that finances most of the release cycle and helps on creative and promotional sides. Nowadays, however, labels are acting more and more as the talent hunters rather than the record makers. The recording industry is trying to bet on safe investments, signing the artist after a couple of songs were already released independently. At the same time, the costs of making a record went down a lot, and the labels don't have to provide the infrastructure as they did a decade ago. This "low touch" approach has brought new types of recording contracts, reflecting the role of the label as primarily a marketing team.

In 2019, the assortment of recording partners and deals available to the artists are more diverse than ever before — and singling out a record deal is a business decision as much as it is a philosophical one. For the deeper view of the record business and label deals, check out our article on the Mechanics of The Recording Industry.

2. Choosing a publishing deal

When it comes to the publishing contract, there are two main factors to be considered: the publishing advance and the publisher's A&R. Publisher's advance traditionally allows artists to make money before royalties are collected, which can take up to 2 years. The advance can be a substantial revenue boost for developing artists. Hoping that musician will become a prominent recording artist or write music for others, publishers will often sign an artist at an early stage of their career.

The publisher's A&R, on the other hand, is essential for artists who need to collaborate: rappers, beat-makers, producers and so on. The publisher's A&R helps find and negotiate collaborations with other performers, and that resource can sometimes propel the artist into the next league.

Besides choosing a publisher, artist and managers have to also decide on the type of publishing deal. The music industry offers full publishing, co-publishing or administration deals, depending on the artist's needs and his/her legal status. Check out our Mechanics of Publishing to find out everything you need to know about how the publishing industry works.

3. Choosing agents & promoters

Managers work very closely with their agents and promoters, so finding the right people for the job is very important. The agent contracts are almost identical across the industry, as, most of the time, the actual deal remains mostly informal. Agents send artists flying across the world to festivals and venues in major cities like New York and Boston, with no guarantees except for their own word, so the managers always look for someone they can really trust in the booking agent.

The relationships with promoters are built on a more contractual basis. Promoters take care of the rent, logistics and marketing. Essentially, they "own" the tour, collecting and distributing the revenues to all other sides. So when it comes to promotion deals, the interests of all parties have to be protected – and put to paper.

The live business is a network-based, decentralized and fragmented system, and the touring landscape is way too complicated to lay it down as a part of this article. We’ve explored the respective jobs of booking agents and promoters, including splits and deal outlines, in our Mechanics of Touring — check it out to find out how the live concert industry works.

How the Artist/Manager Relationships are Structured

So, artist manager liaison and coordinate the artist’s team across the industry, making sure that the contracts and splits are fair and balanced. However, how are the contracts structured when it comes to relationships between artists and managers themselves? What are the common terms of the management deal?

Contracts and Splits

The management deals are mostly informal, as the legal status of the manager remains very vague: in France, for example, up until recently, managers had to be officially acknowledged as agents. There are many ways in which artists and managers deal with the paperwork. However, one thing remains constant – managers earnings are a percentage of the total artist's revenue.

What is the average commission for talent management?

The common average rate we’ve observed is around 15%, but it can differ depending on the scope and specific needs of an artist. The scale of some careers, for example, requires a business manager and a "normal" manager to collaborate, separating the business side from the career strategy. In that case, each of the managers gets a 10% rate, bumping overall management costs to 20%. Besides that, the contract can include an additional 5% rate to cover the manager’s expenses on travel, business dinners and so on.

How the split change in the course of the artist’s career?

As the artist's revenue grows, the artist/manager splits tend to become more and more favorable for the artist. This is justified by the gross gain – generally speaking, it's better to make 10% on $1 million, than 20% on $100k. However, as artists evolve into large international acts, it also becomes much harder to manage them.

How long is a normal artist manager contract?

The standard length of the management contract is three years but it can vary from 2 to 5 years on a case by case basis. Most contracts also include a "Sunset" clause.

What is the Sunset clause?

The "Sunset" clause allows the music manager to get a share of the artist's revenue after the management contract expires (for 18 to 24 months on average). The “sunset” clause is instituted so that the manager can benefit from their initial investment of time and resources in an artist — before they fully peak. In a way, “sunset” clause is the management equivalent of the "duration of rights" in the recording deals – the fixed period when the recording company owns and exploits the recording to make up for initial investments

Likewise, most managerial work is done pre-release rather than post-, while the cash-flows are generated at the end of the cycle. For example, artists usually tour for 12 months after the album has been released and the promotion strategy has been implementation.

Here are some examples of how the “Sunset” clause can be structured:

Six months with standard rate, followed by six months with a 50% reduction, followed by six months with a 75% reduction.

Twelve months with 100% of the manager's initial rate, followed by twelve months with a 50% reduction.

As they are the ones coordinating between all sides of the artist career to steer it in the right direction, nothing is more valuable to artist managers than artists data: it provides selling points, insights, and guidance on how to develop the artists. With data platform like Soundcharts, artist managers can get the 360° view of their clients performance and identify novel opportunities for growth.

Source: Soundcharts