The Undercurrents Series of Music Business Educational Forums is
designed to assist musicians, songwriters, bands and music industry
professionals with continued growth and knowledge of the music /
entertainment industry. These forums and the information provided
is practical rather than legalistic in its approach and should not be
used as a substitute for legal advice in relation to any particular
matter. Undercurrents, Inc. accepts no liability for any
errors or omissions.
Undercurrents music management forum gives an overview of the roles of
management. The forum also discusses the aspects of musicians dealing with
management such as choosing the right manager.
the new year out right, I want you to think about money. Where does it come
from, and what will you do with it, if you get any. In case you ever forget that
it takes money to make money with your music, here is a summary of some general
income and expense categories that may factor into your business/budgeting
forecasts. As you can see there are very few sources of income from music, and
inevitably the expenses you incur must come from those income sources. So,
wake-up call to financial planning.
(Note: please don’t ask me what the ‘average’ income will be for the ‘average’
musician or band, or what to budget in each expense category. Whatever you can
raise is what you have to work with, and there is never enough money to promote
and market music. There are too many variables in those questions to give you
accurate answers. In general, to establish yourself as a professional
artist…expenses for all the categories listed below will be 5 time higher than
whatever you are thinking they may be.)
As you look over the income sources remember that outside of some live
performance fees, and sales of your music and merchandise (like T-shirts, etc)
most of the income sources take years to develop. I get questions all the time
about where will the money come from to start up a label, or your own business?
The answer is this. From wherever you can get it… loans, sugar daddies, lottery
winnings…whatever. Raising the funds to start your own business is your own
business. Perhaps now you understand why so many musicians and bands want those
record deals. Record labels front the money to develop, market, and promote
their artists. Record labels are businesses that understand it costs a lot of
money to sell an artist’s recordings, and the successful labels are well funded
so that they can go out there and fight the good fight…marketing the records
they have released.
Read this and weep, or better yet…read this and PLAN!
A Musician or Band’s Source of Income:
a. Live Performance Fees
b. Sales of your own recording OR
c. Record Label Recording Contract Royalties
d. Songwriter/Publishing Income Sources
* Mechanical Royalties
* Performance Royalties
* Synchronization Fees
* Sheet Music Sales
* Commercials/Jingles Income
* Internet Streaming Fees (pending)
e. Merchandising Royalties ( T-Shirts etc.)
f. Misc. Income Sources
* Investment Income
* Songbook and Video Sales
* Multimedia Product Sales
2. Expenses for a Musician or Band (Putting out their own record) :
a. Recording fees: CD/Tape
* Studio Costs ( From Pro Tools to 24 Track)
* Tape and other studio supplies
* Equipment Rental charges
* Guest Musician fees
* Mixing and Mastering fees
b. Graphic Artist/Cover Art Design costs
c. CD/Tape/Vinyl Manufacturing/Duplication charges
d. Promotional Expenses (Independent Radio Promo Reps/Independent Sales Reps,)
e. Marketing and Sales Plan costs (One sheets, Co-op advertising dollars, Ad
f. Publicity/Promotional Material Costs
* Publicists Fees
* Promo/Publicity Kit Design costs
* Flyers, Posters, Envelope Design costs
* Printing/Copying charges
* Photographer fees and duplication charges
g. Office Expenses
* Stationary and office supplies/furniture
* Phone and utilities bill
* Office equipment ( computers, fax machines, phones et
* Local, State, and Federal taxes
* Tax preparation costs/Bookkeeper fees
i. Band Equipment Costs
* Instrument purchases/rentals
* Tour Luggage
* Misc. equipment repair/maintenance costs (strings,
* CDs and Tapes ( for listening and study purposes)
* Misc. recording/playback equipment (4 track
* Sound system
* Rehearsal space costs
* Copyright registration filing costs
* Performance Rights Organization Fees ( ASCAP-BMI-SESAC)
* Talent Lessons ( vocals, instrument instructions,
* Conferences/ Seminars budget
k. Artist Business Team Costs
* Personal Manager/Consultant fees
* Business Manager/Accountant fees
* Booking Agent fees
* Publicist fees
* Music Attorney fees
l. Transportation costs
* Auto/ Van purchase/rental/Insurance costs
* Maintenance costs (gas, service, repair)
* Airline, bus, and/or train tickets
* Highway/Ferry tolls
m. Touring expenses
* Per Diem ( for food, lodging etc.)
* Road Manager/Roadies salaries
* Lighting/Sound equipment purchase/rental costs
n. Merchandise (T-Shirts etc.)
* Design costs
* Manufacturing and shipping costs
o. Website and Internet Fees
* Website design, maintenance, connection fees etc.)
* E-commerce setup and processing fees
* Email setup and processing fees
p. Miscellaneous Expenses
* Costumes/Stage clothing
* Insurance (health, equipment, life etc.)
* Union dues
* Video production and manufacturing costs
* Whatever else comes along that you forgot about
be an organized working musician
Five types of jobs
Equipment - organized, detail-oriented person responsible for making a list of
all the equipment (by case) and putting that list somewhere in each case to
communicate the contents to all band members. TIPS: Always check disposables
(e.g. batteries, strings, and cables). Use luggage tags for marking cases & a
tackle box for miscellaneous small supplies and tools.
Promotion/Marketing - person to let patrons know that your band is playing
somewhere. Administers the mailing list (updates database, puts together
mailings), contacts area radio stations and retail outlets, distributes posters
and press kits. TIPS: Get help from within band (stamp-lickers, poster-hangers,
etc.). For out-of-town shows, contact radio 2 weeks before show, retail 3 weeks
before show (get your merchandise in there). Use calendars to help keep gigs
organized (use different color markers for ease). Dump college mail lists every
June (students move yearly).
Travel - person responsible for advancing the show. Find out all the details
about the venue (e.g. equipment on hand, directions to show, load in time, sound
check, when & how do we get paid, parking). Schedule, cost out & map the trip
(use Internet map sites for directional help if needed). TIPS: Make out a
standard list of questions for every gig; be as technical as possible (e.g. boom
stands vs. straight). Make a stage plot for the band listing number of inputs
for the soundboard. Check the weather. Buy food to eat in car (saves $ and
Merchandise - person responsible for keeping tabs on CDs, shirts, hats, other
selling items. Keep this money separate from performance pay. Reorders items
when needed. TIPS: Use inventory sheets to keep track of all sales; record
immediately after every show. NO RUSH SHIPMENTS (saves $).
Accounting - person who handles the cash! Pays bills, trip expenses, and
merchandise. Sets up sheets for expense sheets and merchandise sales/inventory.
Only responsible for keeping track of money, not making it.
TIPS: Get a business credit card to aid in keeping track of expenses. Buy in
bulk if possible. Don't owe money. Open business bank account to keep all
members liable, not one. Invoice each gig and pay band members using bank
checks; don't just split funds at end of gig. DON'T BUY UNLESS YOU CAN AFFORD
SAMPLE MANAGEMENT AGREEMENT
The following management
agreement is a simplified letter from you the artist to the person who wants to
manage you, to enable you to compare with contracts you may be offered. It is
not a substitute for a formal agreement drafted and negotiated by a professional
music business solicitor which is likely to be far more complex!
Before signing any form of management contract seek advice from a solicitor and
establish who owns the company you are expected to sign to and whether the
manager will actually be responsible for your day to day affairs.
This article is offered as an educational and informational tool only, and
should not be relied on as legal advice. Applicability of the legal principles
discussed may differ substantially in individual situations. The sample contract
is for illustrative purposes only, and has not been verified for compliance with
the law of any particular state. If you have a specific legal problem or
concern, you should consult an attorney.
for Personal Management
The signatories hereof warrant
to each other that each has taken the professional advice of a solicitor
specializing in such agreements before their signature hereof.
We confirm our Management Agreement whereby we appoint you to represent us as
our sole and exclusive manager under the provisions of this agreement as
1. This agreement relates only to my professional activities and confers the
right to represent me as a solo artist. (Bands/groups/duo's etc need to specify
that only the band as a whole is represented and any solo activity requires
2. Both you and I warrant by our respective signatures that there are no
existing restrictions that prevent either party from entering into this
agreement or performing any of our obligations.
3. This agreement relates solely to activities as a musical artist and in no
way confers the right to represent or hold yourself as representing me in any
other field of entertainment or area of work not connected with the music
industry without prior written consent.
4. During the Term of this agreement defined below you shall have the following
(a) To use your best endeavors to promote and develop my career as a music
artist and provide me with regular reports on your work.
(b) To ensure all monies due to me are promptly collected and remitted
directly to me by the parties from which they are due.
(c) To refer all enquiries connected with our work in areas which you are not
permitted to act directly to me.
(d) You shall not have the right to assign or transfer obligations to any
other person or company without prior written consent, any such act shall
immediately and retrospectively terminate your appointment and this agreement.
5. The following are the obligations I agree to:-
(a) To be available and comply with your reasonable requests to undertake
activities pertaining to my career at my sole discretion.
(b) Not to attempt to negotiate agreements with 3rd parties directly which
relate to activities which you are responsible for and to refer all such third
parties to you.
(c) To refer all Press enquiries to you.
(d) To notify you of any changes in address or contact numbers.
6. During the term of this agreement I shall reimburse any expenses directly
relating to your activities as my manager upon request by you, with the
exception of office expenses i.e., telephone, staff etc., which will be your
sole responsibility. Expenses in excess of $?? for any single item must have
been approved in writing prior to being incurred or will not be reimbursed.
7. If you are permitted to manage other artists then I require you to submit
written details in respect of expenses that are related solely to your
activities as my manager and not as manager of other artists.
8. During the Term of this agreement you shall not be entitled to manage other
artists without my prior knowledge and/or consent and you shall ensure that
management of said artists does not adversely affect your obligations set out
within this agreement.
9. You shall be entitled to charge for your services a commission of 15%
(maximum 20%) of the (gross or preferably net) income received by myself in
respect of the activities the subject hereof during the Term and Commission
Period (excepting that following termination of the Term the commission payable
shall reduce to 10% of the (gross/net) income and will be subject to the
limitations on the source of such income set out below). Commission shall be
payable based on net income received by myself for live work during the Term and
for the avoidance of doubt during the Commission Period you shall only be
entitled to you commission in respect of income derived from recordings and
compositions made in whole during the Term. You shall be solely responsible for
meeting your own Income Tax, Social Security, and/or Corporation Tax.
10. The Term of this agreement shall be 2 years from the Agreement Date with the
provision that I shall be entitled at my sole discretion following the expiry of
6 months from the Agreement Date to terminate the Term in the event that you
have not procured the signature of a publishing or recording agreement by such
date. The Commission Period following the expiry or termination of the Term
whereby you are still entitled to receive commission as set out in Clause 10
shall be 2 years from the date of termination, however in the event that I have
exercised the right to terminate the term after 6 months you shall not be
entitled to receive commission on future income derived from recordings or
compositions made during the Term.
11. The Territory governed by this agreement shall mean the United Kingdom.
(World, whichever country you reside and/or any countries you designate)
12. You shall be entitled to appoint another person as my manager in certain
countries or territories of the Territory provided I grant consent to such
appointment and the identity of such person and provided that such appointment
shall not discharge you from any of your managerial obligations as set out in
13. Nothing within this agreement shall be deemed to create a partnership or
joint venture between the signing parties.
14. This agreement shall be governed by the laws of England.
Please indicate your acceptance of the terms hereof by signing and returning the
attached copy to me.
Names and dated signatures of artist/s
Read and Agreed
Name and dated signature of the manager