Legal Question in Entertainment Law in California
Should my manager get commission from investment monies received?
My manager insists that she is entitled to 20% of the total monies received from investors for my indie label? Are investment monies commissionable? It is obvious that these monies will go to production and promotion of the album (manufacturing, radio,video, publicity, etc) If anything...she should only be entitled to the monies I get as an artist/songwriter/ producer because investment monies is not considered earnings. Shouldn't the manager only get money from EARNINGS and not the entire investment? For example, if I get $200k, is she entitled to 20% percent of this in addition to the 20% she will get from my artist/writer/producer talent fees? My manager claims that it is industry standard she collects 20% of everything that rolls into my business account. Well.. what if a friend of mine decides to invest in me to support my project? Will she be entitled to these monies becuase it is ''industry standard''?
Please advise....
4 Answers from Attorneys
Re: Should my manager get commission from investment monies received?
Sounds like a rip-off to me. But I know so few facts. The starting point in attempting an answer to any question like this is, what does it say in your contract with your manager? And the question implies you didn't have a lawyer read the contract when you signed it, otherwise you'd know who to call. If you have no written contract, the answer depends on how much money is involved and how much negotiating leverage you have to persuade her to sign a formal, well-written contract.
Re: Should my manager get commission from investment monies received?
Although there are broad terms that are considered "industry standard" in reality, terms are decided based on what is negotiated in the management contract. I have never allowed investment funds to count as commisionable income. It sounds like you don't have a comprehensive management agreement in place. Make sure you get one before moving forward so these types of misunderstandings don't occur.
Re: Should my manager get commission from investment monies received?
Please call me directly at 16192223504, I need to review all of your documents related to
the transaction. It initially sounds
unreasonable and perhaps if it is a term in the contract, it may be stricken.
Re: Should my manager get commission from investment monies received?
It's not industry standard for the very reason you're suggesting. If you got a paid airline ticket the manager wouldn't get a portion of that either. Any sensible manager, would be thrilled to see investment come into an artist which could be used to promote the artist's career and generate gross revenues which would be subject to the 20%. Check http://www.spmlawyer.com/FormAgtMgt.html and go to par. 11.(b)(ix).
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