Learn How Much Band Managers Get Paid
Band managers are very handy to have around, but up and coming artists often forget one thing in their hunt for a manager: once you get one to work with you, they're going to want to be paid. Negotiating how your artist manager will be paid is VERY important. After all, not only is your manager going to help you start making money, but you're also going to be splitting your income with them. It pays (get it?) to be sure you understand exactly how your manager expects to be compensated for their work.
Band Manager Wages
Although sometimes a manager may get a wage (it has been done), the vast majority of management deals are based on commission. That means that your manager takes a percentage cut of income you generated. What income they can touch is up to debate - and we'll get to that in a minute - but first, consider the amount of the percentage.
The norm is around 15%, though some artist reps want 20%, particularly in the case of a new artist that is going to require a lot of upfront work before any money is seen. Often, this percentage is of your gross income - which means that even if you take a hit on a deal and actually lose money yourself, your manager is still paid.
However, some managers get a percentage of your net, which means if you, say, lose money on a show and end up out of pocket, your manager doesn't get paid for that event. Sometimes, managers get a gross percentage of some income and net percentage of others. Other times, the percentage changes as certain earning thresholds are met. For instance, if a new artist agrees to 20% when they hire a manager, once they make a certain amount of money, the manager may agree to scale it back to 15%.
Divvy up the Income
Just as there is a wide array of ways the percentage can be calculated and applied, there are a number of ways to divvy up the streams of income. Some managers get a percentage of all income, period. Other deals are structured so that management gets a lesser percentage - or sometimes no percentage at all - on certain kinds of income, like songwriting income if your manager represents you as a recording artist.
There are no hard and fast rules here - it's simply a matter of negotiating an arrangement that is acceptable to everyone. Do keep in mind that managers will want to maximize their earning potential by tapping into as much of your income as possible, and they should be compensated for the work that they do. Going back to the songwriting example - if your manager represents you as a songwriter and as a recording artist, then they should be paid as such.
Even when management gets a cut of all of your income, there are certain things they don't touch as a matter of course. Your manager shouldn't get a percentage of monies paid by to you by a label to pay for some other activity - recording, producers, touring, opening acts - this isn't income, but rather you're simply an intermediary for that money.
There are lots of different flavors of manager payments out there. The only rule is that you need to come to terms BEFORE the work begins, so there isn't any confusion. By the way, many managers work on a handshake deal rather than a written contract. However, if that scares you, there's nothing wrong with writing up at least an informal agreement so that everyone knows where they stand.