4.0 Expenses

4.1 Out of Pocket Expenses

A manager will invariably require reimbursement of his or her expenses. This should extend only to expenses incurred by the manager specifically on behalf of the artist. The manager’s overhead costs should not be recoverable from the artist.

4.2 Approvals

Some artists require a right of approval of any expenses to be incurred above a particular financial limit. This is a useful precaution during the early stages of the business relationship but tends to become unnecessary and cumbersome once the working relationship has been properly established.

4.3 Reimbursement

There is sometimes controversy over how expenses are to be reimbursed. Most managers accept (partly out of practical necessity) that expenses are recoverable only from commissionable income. Others take the view that since the expenses have been incurred specifically on the artist’s behalf those expenses should in effect be treated as loans and should be repayable on demand. This gives rise to the prospect of a project failing and the management relationship coming to an end whereupon the manager presents the impecunious artist with a demand for repayment of outstanding expenses. No management contract will impose an obligation upon a manager to incur any particular expenses and most managers will readily accept that if they agree to incur a particular expense this is done at the manager’s own risk in the sense that this will only be reimbursable if there is sufficient commissionable income. A compromise is that if the commissionable income is insufficient then any outstanding expenses would be repayable out of the artist’s future entertainment related income (even though that income may not be commissionable because the management agreement has come to an end). If the manager insists upon this the artist might at least try to ensure that reimbursement is made only out of an agreed share of future income (in order to avoid the risk of a period during which he or she loses all of his or her earnings to the exmanager).