What are the main deal points in an agency agreement?
UPDATED: February 20, 2013
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident law decisions. Finding trusted and reliable legal advice should be easy. This doesn't influence our content. Our opinions are our own.
Each union has its own pre-printed "form" agency agreement, providing all of that unions particular requirements. These form contracts are lengthy and complicated. They are basically a stack of union forms combined into one "agency agreement". A union agency agreement is actually comprised of eight contracts incorporated into one; one from AF of M (for musicians); one from AFTRA (for vocalists and taped or live televisions actors and actresses); three SAG agreements (one each for TV, film, and commercials); one for Equity; and two catch-all agreements called "General Service" and "Packaging".
Some tips on negotiating terms in an agency agreement include:
(1) General Terms: Before singing any agency agreement, be clear with the agent on what genre of music you play, what sorts of other music you can play in a pinch, and what styles of music you are unable or unwilling to play. You should clarify if you are willing to work in venues only at night due to bandmember commitments, and whether you are willing to travel and how far. You may also need to reach an agreement of the prices the band will charge.
(2) Exclusivity: Most agencies will want to be your only (exclusive) booking agent, at least in a specified territory.
(3) Term: The "term" means the length of the contract. Agents like to ask for three (3) or more years. If you are artist with sufficient bargaining power, try to get them to limit it to one (1) year. If you cannot get this, try to get a clause allowing you to terminate after each year if the Agent fails to generate certain minimum levels of earnings.
(4) Territory: Talent Agents usually require "worldwide" rights. As a new artist, you may not able to avoid this. Once you become a mid-level artist, you may ask to exclude territories outside the US.
(5) Fees: Never give your booking agent a percentage of your income from records, song writing, or publishing. The "form" agency agreements from AF of M and AFTRA have a place on the form where you can initial if the agency commissions your earnings from your records. Do not consent to this. Instead, give them 5% to 10% of the personal appearances, depending on the employment procured. Sometimes, agents will reduce their percentage from 10% to 5% for artists that also generate major revenues from concerts. For TV, films, and radio, agents usually do not accept less than 10%. Sometimes, a sliding scale fee can be negotiated, which means as your income goes up, their fee goes down.
(6) Scope: Despite the fact that agency agreements are usually on pre-printed forms, there are a number of exclusions from your earnings that an artist should try to negotiate. Try to exclude earnings from: record producing, records (mechanical royalties), song writing (performance, synchronization and print income), sound tracks (even if they got you work as an actor or actress), commercials (unless your under contract for them), book publishing, and costs of collection. Try to avoid the agency from being able to get you employment in these areas without your written consent.
(7) Key Person: In order to ensure that the Talent Agent you hired stays your agent, even if he or she leaves the agency company, it is advisable to insert a "key man" clause in your agency contract. This clause provides that the "key person" with whom you have a agency relationship must be living and be actively and personally involved as your agent and, if not, you can terminate your agency agreement.
(8) Termination: In your union agency "form" agreement, make sure it contains a provision allowing the artist to terminate the contract if a specified amount of work has not been obtained in a certain time period. Make sure you also insert a clause that says that if any of the eight union forms contracts are terminated, you have the right to terminate the rest. If this is not done, the Agency may be representing you in certain areas, but not in others. If you cannot negotiate this escape clause, then try to at least get the Agent to agree that if either the AF of M or AFTRA agreements can be terminated for failure to secure employment, then you have the right to terminate all other contracts (called a "co-terminus" clause). In case the artist/agency agreement terminates during a tour, the agency will try to get paid commissions for all tour dates procured, so try to insert a clause that indicates that no commissions are paid for non-appearances beyond your control.
(Reprinted with permission of Ruben Salazar, Esq.)