Artist management deals: commission, term and the sunset clause

The commission base: percent of what, exactly

The headline rate matters less than the base it applies to. Gross-income commission is brutal on low-margin lanes: a manager commissioning gross touring income earns while the tour loses money. Modern deals commonly commission net on touring, or exclude defined costs, while taking gross on high-margin lanes like publishing advances.

Exclusions need listing, not assuming. Is the commission taken on the advance the client must recoup, on tour support that is really a loan, on money that merely passes through (session fees paid on to a band)? Each yes quietly raises the effective rate above the headline.

Term, scope and keys

Terms run in years or album cycles, commonly with options. The scope clause says which career lanes the manager commissions: some deals reach everything the artist earns, including acting or writing income the manager has no hand in. Trimming scope to music-related income is standard negotiation.

Key-person and performance clauses give the artist exits that matter in practice: the right to leave if the individual manager departs the company, and thresholds of activity or earnings below which the term ends early. A long deal without keys binds the artist to a desk, not a person.

The sunset clause: the money after the end

Managers argue, fairly, that deals they negotiated keep paying after the relationship ends, so commission should too. Unlimited post-term commission, though, means paying a manager forever for work long finished. The sunset clause is the compromise: full commission for a period after the term, then stepped-down rates, then zero.

A typical shape runs full rate for a year or two, half rate for a similar period, and nothing thereafter, applied only to income from deals made during the term. The uncapped alternative, commission for the life of those deals, is still offered and still signed, and it is the clause most likely to be regretted a decade later.

• Check what the sunset applies to: income from term-era deals only, or all future income from term-era recordings and songs.
• Check the new manager overlap: stacked commissions to old and new managers can pass a third of income to management.
• Check who collects: post-term money should flow through the artist or a neutral collection account, not the former manager.

Reading a management deal as the numbers person

Model the deal, don't just read it. Take the client's realistic income mix and compute the effective total management cost under the proposed bases and exclusions; then re-run it for the year after a hypothetical split. The difference between a fair and an aggressive deal is rarely the headline rate and usually three or four definitional choices that a spreadsheet exposes in an hour.

And keep the commission calculations checked against the contract every period once the deal is live. Commission drift, charging the headline rate on excluded income, is one of the commonest quiet leaks in artist accounts.

Common questions

Terms used in this guide

• Manager commission
• Sunset clause
• Post-term commission
• Gross vs net