Paying Retainers to Managers
By: Edna Landau
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I am a member of a chamber ensemble which is in discussions with a small agency regarding management. We have been asked to pay a monthly “administrative fee” to cover the management’s expenses on our behalf. Can you please tell me whether this is customary? Also, should these payments cease when the manager begins to receive commissions from concerts we perform? – D.B.
The answer I am going to give to your question is very different from what it might have been five years ago. At that time, artists were very leery of an agency that asked for a monthly retainer. Today, I think it is incumbent upon artists to take a broader view. It is becoming increasingly difficult for soloists, ensembles, conductors and dance companies to obtain management. Times are challenging and managements need to focus their energies more than ever on the bottom line. A small or new agency faces the biggest challenges because they can’t amortize the cost of developing young artists’ careers against the hefty commissions received from well established artists. When Charles Hamlen and I worked together in the pre-IMG Artists days as Hamlen/Landau Management, we charged our artists for all expenses incurred on their behalf. This included phone, postage, printing (promotional pieces and inclusion on our printed artist roster), advertisements, and the like. Once we became IMG Artists and the roster became large and varied, we abandoned the practice of charging for phone and postage since it was too time-consuming to do the calculations. We continued to charge for promotional materials specifically prepared for individual artists. The administrative fee you are being asked to pay is not unjustifiable and it streamlines the expense reimbursement process for the manager. A reasonable monthly fee might be in the range of $300-$400 a month. Today there are a growing number of small, respected agencies who charge not only for the above expenses but for their travel to booking conferences, their exhibit costs at those conferences and the conference registration fee. Some are also charging their artists for maintaining and updating their presence on the management’s website. I know of one agency that charges an annual fee, which they are willing to accept in installments if that is easier for the artist. This fee might be anywhere from $2000 to $4000. These monthly and annual fees might even be slightly higher than the actual total of documented expenses. I can assure you that managements charging these fees wouldn’t do so if they didn’t need to. There are various times during the year, such as the summer months and December when income from commissions is way down. The monthly or annual fee enables the management to pay their own operational expenses during such times. I should add that there is so much that a manager does for an artist on a regular basis that is not related to concert booking ( such as setting up auditions, writing and updating bios, coordinating interviews, offering general career advice, showing up at performances) and that cannot be adequately compensated for solely from commissions, especially when the artist is starting out and fees are rather low. In your particular case, your manager won’t earn any income from you for at least 12 to 18 months, since engagements are booked with a long lead time. Once this period has passed and you begin to generate commission income for the management, there is no reason why you can’t discuss the administrative fee and see if it can be lowered or waived. If the answer is no but you are otherwise happy with how things are going, you should consider yourselves lucky to have management at all and view these payments as you do other career related costs such as a tax accountant, concert clothing, and purchase or maintenance of your instruments. Remember that at least in the U.S. , they are tax-deductible.
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© Edna Landau 2012