1.0 Duration

1.1 Contracts Terminable upon Notice

Some management contracts do not run for a fixed term; rather, they continue indefinitely unless and until either party serves a given period of notice. The period of notice would normally be three months or perhaps six months although in some cases more sophisticated notice provisions apply so that, for example, the agreement may only be brought to an end once an “album cycle” has reached its conclusion.

1.2 Fixed Term Contracts

Most management contracts provide for a minimum fixed period. This would usually be between three years and five years. There is an unwritten rule that management contracts should not continue for longer than five years. The feeling is that if a manager were to insist upon a longer period then the artist may be able to challenge the validity of the agreement on the basis that it represents an unreasonable restraint of trade. However there is no black and white rule to the effect that a five year contract is enforceable but anything longer is unenforceable.

As indicated above, some management contracts run not for a specified period of years but for a given number of “album cycles”, i.e. for perhaps three cycles (with a cycle being defined for this purpose as the period involved in writing, rehearsing and recording an album and then until the end of any promotional or touring activity in relation to that album).

1.3 Typical Duration

Most management agreements, however, run for three, four or perhaps five years. This would include any option period so that, for example, the agreement may run for three years but so that at the end of the initial period the manager has an option to extend for another one or two years. Sometimes the option to extend will only be available to the manager if certain targets have been achieved during the initial period (perhaps a minimum level of earnings or a given chart position).

1.4 Trial Period

Often, there may be a trial period of some kind. A typical trial period would be six months. This would usually work in one of two ways. The parties may sign a simplistic agreement on the basis that if at the end of the trial period both parties wish to continue, then both parties will negotiate the terms of a more formal longer term agreement. Alternatively, a formal agreement will be negotiated from the outset. However, whilst this may run for, say, five years there will be a provision to the effect that either party may terminate at any time during the period of, say, thirty days following the expiration of the initial six months. Managers are naturally reluctant to agree to a trial period of this kind because this might mean that a great deal of preliminary work is done on behalf of the artist only so that the artist may then walk away. A common approach is therefore instead to include a provision to the effect that the artist will be able to terminate the management agreement after a given period (perhaps twelve months or eighteen months) in certain defined circumstances, e.g. if by then the artist has failed to enter into a recording contract.

1.5 Exclusivity

The duration of the deal represents the period during which the manager is exclusively entitled to represent the artist. The exclusivity rarely works the other way round. The artist would not expect to be exclusively entitled to the manager’s services (although some management contracts specify that the manager may not manage more than a given number of other artists). In the case of a new recording career a great deal of work typically needs to be done during the early stages for relatively small award. There is often a lengthy period of hard work before the project is in good enough shape to present to the record companies. The whole process of negotiating a record deal is usually a lengthy and arduous one. After the record deal has been signed further work will need to be done in preparing rehearsing and recording the material. The record company may wish to release a single before committing to the release of an album. For all these reasons, it might easily be a year or two after signing the management contract before the first album is released. This may be followed by an extensive period of touring activity in an effort to promote the album. If the album is sufficiently successful for the record company to exercise its option for the next album there may then be another delay before suitable material is prepared and recorded. For all these reasons, a three year management contract would often fail to cover more than one album and a four year management contract might cover no more than two albums. The artist’s first album would have to be unusually successful if it is to “recoup” (see Chapter II) so that royalties actually become payable. It usually takes a while for a successful artist to build a reasonable sales base. It is not difficult to envisage circumstances whereby a manager may work very hard over a period of three or four years to establish an artist only to find that the artist then decides that he or she wishes to appoint another manager (or to look after his or her own affairs) leaving the ex-manager with a commission entitlement in relation to perhaps only two albums just before the “watershed” is achieved with the third album (see para 4.0 Part III Chapter II). It is for this reason that managers seek the protection of long term exclusive management contracts. The difference between a four year contract and a five year contract may be critical in terms of the likelihood of a reasonable financial return for the manager.