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Understanding Your Talent Management Agreement – 7 Key Tips For Talent

  • 20 May 2024
  • Studio Legal

Written by Harry Croft and Principal, Jennifer Tutty.

Got talent?  But need help managing and commercialising your personal brand?

Talent managers can be key to helping you to define your business and marketing strategy, grow your personal brand, receive more work and develop a long standing career.

So – you’ve been approached by a talent manager who wants to work with you.  What comes next?  Well, you need to negotiate and agree on the terms of your talent management agreement (ideally with the help of your entertainment lawyer – this is not something you want to DIY).

In order to help you with this important step, we have put together 7 key things to look out for when signing a talent management agreement. 

1. Term & Territory

Term – How Long Does The Management Agreement Go For?

First things first, ensure you know how long the agreement will last (the term) and where it will apply (the territory).

Make sure any options to renew the agreement at the expiry of the term are clearly set out, and that there is a mechanism in the agreement for how the option is renewed (including which party can provide notice, the timing for that notice and how notice is provided).

Check for any ‘automatic rollover’ provisions once the term expires. This type of provision provides that if you don’t give notice that you wish to end the agreement before the end of the term, it will automatically continue for a period of time (for example, on a monthly, 3 monthly or 6 monthly basis).

TIP: Make sure you put all important dates in your diary especially regarding when you need to give notice to terminate an agreement that automatically renews.

TIP:  Try to avoid automatic renewal clauses for the term of the contract in case you forget to give notice to end the management agreement on time (and are stuck with someone you don’t want managing you for an extended period of time).

Territory – What Areas Will The Management Agreement Apply In?

Make sure you know the territory of the agreement – is the management team responsible for looking after you throughout the world? Or is this limited to a particular region?

2. Industry – What Industry Will The Manager Represent You In?

It is important to understand the scope of the industry the manager will represent you in.

Commonly managers will want to represent you for the entertainment industry broadly.  Sometimes they will want to manage you in both the entertainment and the media and communications industry broadly. 

As an example, the entertainment industry can be very broadly defined in talent management agreements and can include events, writing and performing music, fashion, book publishing, acting, radio presenting, social media activities, sponsorships, podcasting. 

As part of considering whether to enter into a management agreement, you should establish the experience the manager has in various parts of the nominated industry.   For example if the manager has no experience in representing book writers, and you want to write a book one day and appoint your own literary agent, you might remove ‘book publishing’ from the scope of the nominated industry.

TIP:  The management agreement should always place positive obligations on managers to do a good job.  Here are some examples:

– The manager must use best commercial efforts to source work opportunities for the talent;

– The manager must act in a professional manner and not cause any damage to your reputation.

– The manager must act in accordance with the standards a first class manager in the same industry would adhere to.

3. Scope of Services – What Will The Manager Do For You?

You should have a clear understanding of what the manager will do for you as part of the management arrangement.

Here are some of the common services a manager will provide talent:

– Provide career advancement and mentoring services.

– Negotiate contracts for you.

– Find work opportunities for you.

– Assist to commercialise your brand assets.

– Promote your brand in the marketplace.

– Book engagements for you.

– Collect payments for your engagements.

– Pay expenses associated with running your business.

Some managers will require you to appoint a book-keeper to run the accounting tasks associated with your business.

4. Acting As Your agent – What Rights Does The Manager Have to Act on Your Behalf?

It’s important to know that appointing a manager creates an ‘agency relationship’ relationship at law. The management agreement should detail the ‘scope of the agency’ by clearly outlining what rights and authorities the manager has to act on your behalf as your agent.

Here are the some of the common authorities talent will provide to managers in relation to a management agreement:

– Managers can act as your representative and discuss affairs on your behalf;

– Managers can sign contracts on your behalf and bind you to contractual arrangements;

– Managers can authorise third parties to use your brand and other intellectual property assets.

– Managers can spend money on your behalf with certain limitations.

TIP:  The management agreement should always contain a clause stating that you have final approval over certain things relating to your career. These include:

– Creative control over all projects.

– All work opportunities.

– Signing contracts.

– Appointing co-managers, book-keepers or booking agents.

– Incurring expenses over a certain amount per month or where there is no cash flow to do so.

5. Exclusivity – Is the Manager The Only One Entitled to Perform The Management Services?

Check for exclusivity – is the management agreement an exclusive or non-exclusive arrangement?  

An exclusive arrangement generally means that you can’t appoint other managers or third parties to perform the management services, while a non-exclusive arrangement means can you appoint other managers or third parties to help perform these services.

Many managers are likely to require some form of exclusivity either in relation to all or some of the services they will provide.

TIP:    If you want to retain other people to provide some of the manager’s proposed management services, you need to make sure that the management agreement states that these services shall be provided by the manager on a non-exclusive basis.

6. Commission

Managers are paid via charging a commission on income you earn. The industry standard for management commission in Australia is 20%, however we see a range of anything between 15-30% around town.

The management agreement should detail how the commission is calculated and the timing and method for payment.

In particular, it’s important to pay careful attention to how the commission is calculated as this will impact the final amount you will personally receive.

In most agreements the commission will be calculated on ‘gross amounts’ received by the manager, meaning the commission is applied to all amounts the manager receives.

The calculation should specify what (if any) amounts are deducted from that gross amount before the commission is applied.

The greater the deductions before the commission is applied, the higher the amount payable to you. These deductions might usually include items such as GST, superannuation, travel, meal and product allowances.

TIP:  Try to deduct travel and accommodation costs for appearances and performances from gross income before management commission is deducted.

7. How Payments Are Collected, Received and Managed

The agreement should clearly set out how payments for your work and services performed are collected, received and managed.

For example:

– Is the manager actually carrying out the book-keeping and accounting tasks for you or is this being delegated to a third party book-keeper;

– Will the manager set up a separate bank account to collect payments on your behalf;

– Can the manager make payments of PAYG and superannuation to you on behalf of the clients who engage you for work;

– How many days after receipt of fees will the manager make payment to you;

– Is there an obligation for the manager to provide you with financial statements; and

– Do you have a right to inspect the bank accounts, and how often can you inspect the accounts.

Additionally, if the manager is located in NSW, there are some obligations placed on managers contained in the Entertainment Industry Act 2013 (NSW) that the manager may have to comply with relating to caps on certain commissions, cooling off periods, trust accounting, keeping of financial records and provision of financial statements.

Further Information

If you work in the talent industry and are looking for legal assistance, please contact us through our online form or via email at hello@studiolegal.com.au.

Written by Harry Croft and Principal, Jennifer Tutty.

Published 8 May 2023.

Photo by Sherise Van Dyk on Unsplash

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.