Money is the first thing most artists want to ask about and the last thing they ask. So here is how managers usually get paid, in plain terms.
This is general industry practice as I have seen it over a long time in the business. It is not legal advice. Every deal is different, and anyone signing a management agreement should have their own music lawyer read it first.
The commission
A manager is paid a percentage of what the artist earns. In general practice that is 15 to 20 percent. Newer managers sometimes take less. Some top managers for big artists take more, or negotiate different rates for different income streams.
There is usually no fee up front. That is the point of the structure. The manager earns when the artist earns, so the manager is paid to grow the career. If someone asks you for a monthly retainer and calls it management, they are selling you a service. That can be a fine service. It is just a different business, and you should know which one you are buying.
Gross or net
This is where the real negotiation sits.
- Gross means the commission is taken on the money before costs. Simple to track. Can be expensive for the artist when costs are high, like touring.
- Net means the commission is taken after certain costs are paid. Better for the artist on income with big expenses, harder to track and easier to argue about.
A common middle path is gross on most income, with specific costs excluded before the commission is calculated. Touring is the usual example, because a tour can gross a lot and still lose money once crew, production, travel and the agent's share are paid. A manager taking 20 percent of the gross on a tour that barely breaks even can end up earning more from it than the artist. Good agreements deal with that up front.
What is usually commissionable
In most agreements the manager commissions income from the artist's work in entertainment during the term. Typically that includes:
- Record royalties and advances paid to the artist
- Publishing income and advances
- Live performance fees
- Merchandise
- Brand partnerships and endorsements
- Sync fees for film, TV, games and ads
- Acting, hosting and other work in the entertainment business, if the agreement covers it
What is usually not commissionable
This list matters more than the rate. Common exclusions:
- Recording costs. Money that goes into making the record, including producer fees and studio costs, even if it comes as part of an advance.
- Tour support. Money a label puts up to cover tour losses.
- Pass-through money. Payments that go straight to someone else, such as opening act buy-ons, and often sound, lights and production on tour.
- Income from before the term. Royalties on records released before the manager arrived are often excluded, or commissioned at a lower rate. This is negotiated.
If the agreement does not say what is excluded, assume nothing is.
The sunset clause
When a management agreement ends, the manager usually keeps earning on deals that were made during the term. That is fair. If a manager got you the record deal, they should not lose all of it the day the contract ends.
The sunset clause sets how long that lasts and how it steps down. A common shape is the full rate for a period after the term, then a reduced rate, then a smaller one, then zero. The exact years and percentages are negotiated.
Without a sunset, the artist can end up paying a former manager on old deals forever, and paying a new manager on top. With a sensible one, the old manager is paid fairly for their work and the new manager has room to come in.
Expenses
Managers spend money doing the job: travel, phone, sometimes flights to a show or a meeting in another city. Normal practice is that the manager pays their own office costs and the artist reimburses costs spent specifically for the artist. A good agreement sets a limit above which the manager needs the artist's written approval first. Ask for that.
Who collects the money
Ideally neither the manager nor the artist touches the money directly. A business manager or accountant collects income, pays the commission and expenses, and sends statements. That keeps everyone clear on what was earned and what was paid.
How I think about it
I am paid on the career, so I am responsible for the career. That is why the commission model works. When I worked as BTS's US managing partner from 2016 to 2018 and when I took on Monsta X in 2018, the job was building income that did not exist in the US yet. For BTS that meant national TV and a Platinum remix. For Monsta X it meant a US label deal with Epic Records and a Staples Center headline show. A manager who is not paid until that income shows up has every reason to make it show up.
If you want the bigger picture on [what a manager actually does for that percentage](/blog/what-a-music-manager-does/), I wrote it out. And for artists outside the US, [here is what US management involves](/us-management-for-international-artists/).
General practice, not legal advice. Your lawyer reads the contract before you sign it.
More from the blog: What to look for in a music management contract · Questions to ask a music manager before you sign · Manager, label, publisher: who does what · What a music manager actually does.