What Is a Contract? A Conversational Guide to Music Industry Agreements
By Written by Peter McVeigh
A plain-English look at why contracts exist in the music industry, what they should contain, the traps to avoid, and the one question that matters most before you sign anything. Always seek qualified legal advice before signing a contract.
Before Anything Else: Get Legal Advice
This article is a conversational piece. It is meant to help you think about contracts in a practical, human way - to understand why they exist, what they should contain, and what to watch out for.
It is not legal advice. It cannot be legal advice. And before you sign anything - a management deal, a publishing agreement, a record contract, a band partnership agreement - you should sit down with a qualified music industry solicitor who has read the actual document in front of you.
That said, understanding the principles before you walk into that meeting makes you a better client, a better negotiator, and far less likely to sign something you'll spend years regretting.
Why Does a Contract Exist at All?
A contract exists because two parties want to work together and have different things to offer.
Take the most common example in the music industry: a band and a manager. The band has music, talent, and the ability to perform. The manager has industry connections, time, expertise, and the ability to open doors. Neither can do what the other does. Both need the other to succeed.
But goodwill and enthusiasm are not a business plan. What happens if things go well and there's money to split? What happens if things go badly and one party feels the other isn't pulling their weight? What happens when the relationship ends - and all professional relationships eventually do?
A contract answers those questions before they become arguments. It is not a document that assumes things will go wrong. It is a document that allows both parties to focus on going right, because the difficult conversations have already been had and agreed upon in writing.
The best contracts feel almost unnecessary - right up until the moment they become essential.
The Balance of Incentive: How a Manager Deal Actually Works
A management contract only functions if both parties have a genuine reason to make it work. That sounds obvious, but it is one of the most important things to understand about how these agreements are structured.
A manager typically takes a percentage of an artist's gross income - the industry standard sits around 15-20%, though this varies depending on the manager's track record, the stage of the artist's career, and what exactly is being managed. More established managers with bigger rosters may command 20%. A newer manager hungry to build their reputation might come in lower.
Here is the key: there is usually no upfront money. The manager does not get paid a salary. They do not invoice for their time. They make money when you make money. If you play a show for £500, they take their percentage. If you play no shows, they take nothing.
This structure is, in theory, perfectly aligned. The manager is incentivised to get you work. If you don't perform well, if the audience doesn't grow, if the bookings dry up - the manager earns very little from you. Their time becomes a bad investment. That pressure can work in your favour.
It also means that a manager who signs an artist they don't genuinely believe in - or who takes on too many clients - has very little financial consequence in the short term. They just quietly deprioritise you. Understanding this dynamic helps you evaluate whether a manager is genuinely invested or just hedging their bets.
360 Deals: The Full Picture
A 360 deal - also called an all-rights deal - is an arrangement, most commonly with a record label, in which the label takes a percentage of all of an artist's revenue streams, not just recorded music sales.
That means touring income, merchandise, sponsorship deals, sync fees, publishing royalties, acting work, brand partnerships - everything. In exchange, the label typically provides more upfront investment, more promotional support, and a more active role in developing the artist across all areas of their career.
The argument for a 360 deal: If a label is investing heavily in your development - funding recording, marketing, promotion, and artist development - it is reasonable for them to participate in the broader commercial success they've helped create. In an era where recorded music revenue has fallen dramatically, labels argue that the 360 model is the only one that makes the investment worthwhile. For an artist who genuinely needs that level of support, a well-structured 360 deal can be the difference between a career and a hobby.
The argument against: If you have already built a touring fanbase, a merchandise operation, and a live income independently - before any label involvement - signing over a percentage of all of that to a label is giving away something they had no part in building. You are being asked to fund their investment in your recorded music with income you generated entirely yourself.
The 360 deal is not inherently good or bad. It depends entirely on what the label is actually contributing, how high the percentage is across each revenue stream, and how much leverage you have to negotiate the terms. An artist at the beginning of their career with nothing built has less leverage than one with a proven live following. Know where you stand before you sit down at the table.
The Danger of a Bad Contract
Bad contracts are not always obviously bad. The most dangerous ones look reasonable on the surface and reveal their problems slowly, over time, as situations arise that the document handles poorly - or doesn't handle at all.
There are three ways a contract typically goes wrong:
It is too one-sided. One party has significantly more negotiating power and has used it. Terms that are commercially reasonable in one context become exploitative in another. Long lock-in periods with no performance obligations from the more powerful party. Rights grabs that extend well beyond what the relationship justifies. Option clauses that give the label or publisher the right to extend your deal on their terms, indefinitely.
It is silent on things that matter. A contract that doesn't specify what happens to the rights when the relationship ends. One that doesn't define what constitutes a deliverable, a release, or a successful campaign. One that assumes both parties share a common understanding of terms that mean completely different things to each of them.
It uses vague language. This is where contracts cause the most quiet devastation. Vague terms feel friendly in the room - they suggest flexibility and goodwill. In a dispute, they become weapons.
The Pencil Story: Why Vague Language Can Ruin You
I want to tell you about something that happened to me, because it illustrates the problem better than any theoretical example.
I once worked with a manager whose contract included a clause stating that one of their roles was to "offer help with songwriting" - and that they would be entitled to a royalty share if they did so.
Offer help with songwriting.
Not: co-write the song. Not: contribute a melody, a lyric, a chord sequence, a structural idea. Not: be present in the room as an active creative participant.
Offer help.
Handing someone a pencil is offering help with songwriting. Making a cup of tea so the writer can keep going is offering help. Being in the building qualifies. There is no definition of "help" in that clause, no threshold for contribution, no mechanism for determining whether the help offered was meaningfully creative.
It means that anyone could claim a royalty share from anything you write, at any time, simply by demonstrating that they were in proximity to the process and offered something - anything - that could be described as assistance.
That clause should never have been in a contract. No reputable music lawyer would have let it stand. But it was there, and it is the kind of thing that looks innocuous in a warm room with someone you trust, and becomes catastrophic the moment the relationship turns.
Every term in a contract should be specific enough that a stranger - a judge, an arbitrator, someone with no knowledge of the room in which the agreement was signed - could read it and know exactly what it means.
What a Good Contract Should Actually Contain
A well-structured management or industry agreement should do the following:
Define the roles clearly. What is each party responsible for? Not in general terms - specifically. The manager will pitch the artist to booking agents in the UK and Europe. The manager will attend or facilitate at least X meetings per quarter with industry contacts. The artist will deliver X pieces of recorded material per year. The artist will be available for X days of promotional activity per release. Specific. Measurable. Attributable to one party.
Set short, medium, and long-term goals. Not vague ambitions - actual targets. In the first six months (short term): secure representation with a booking agent, release one single with a defined promotional plan, build the mailing list to a specific number. In year one to two (medium term): complete a headline tour, secure a sync placement, grow streaming numbers to a defined benchmark. In years two to five (long term): negotiate a label or publishing deal, establish an income from live performance that covers costs, build an international audience in at least one territory.
These goals are not binding in a legal sense in every contract - but writing them in creates accountability. It gives both parties a shared definition of what success looks like and what progress is expected.
Build in a review mechanism. A management deal signed today should not run unchecked for five years. Include a formal annual review - a structured conversation in which both parties assess what has been achieved against what was agreed, whether the relationship is working, and whether the terms still reflect the reality of the partnership. In many cases, the outcome of an annual review is a new contract - adjusted terms that reflect where the career has actually gone.
List what credit is due to each party. If the manager secures a sync deal, what percentage of that fee is theirs? If the artist writes a song alone, is there any management commission on the publishing income? If the manager introduces the artist to a producer who subsequently signs them to a label, does the manager benefit from that relationship after the management deal ends? These are not hypothetical edge cases. They happen constantly. The contract should answer them.
What Is Expected From Each Party
Both sides of a professional music agreement carry obligations. A contract that only lists what one party owes the other is already imbalanced.
What the artist owes the manager: - Availability for meetings, calls, and industry engagements as agreed - Delivery of creative work to an agreed schedule - Honest communication about plans, concerns, and creative direction - Professionalism in all situations the manager has arranged - Transparency about income from all sources covered by the agreement
What the manager owes the artist: - Active, documented pursuit of the opportunities agreed upon - Regular reporting on activity, conversations, and outcomes - Honest feedback about industry reception and commercial realities - Financial transparency - receipts, accounts, breakdowns of commissions taken - Respect for the artist's creative identity and direction
When these obligations are written into a contract, they create a foundation for an honest working relationship. When they are left unwritten and assumed, they create the conditions for resentment, misunderstanding, and eventually a very expensive falling out.
Researching the Standard Before You Sign
One of the most useful things you can do before entering any professional music agreement is find out what the standard looks like.
That doesn't mean copying what everyone else signs. It means understanding the landscape well enough to know whether what you're being offered is normal, generous, or exploitative.
There are resources for this. The Musicians' Union publishes guidance on standard rates and terms. The Music Managers Forum has information about management deal structures. Music industry solicitors deal with these contracts every day and can tell you quickly whether a given clause is industry standard or a red flag.
Talk to other artists. This is underused and enormously valuable. Not everyone will share the details of their deal, but many will - particularly at similar stages of career. Knowing that every other artist at your level is signing management deals at 15% makes a 20% offer with no performance clause look different.
And read the contract. All of it. Not just the headline numbers. The definitions section. The termination clauses. The post-term commission clause - the one that determines how long your manager continues to earn from deals they introduced after the relationship has ended. That clause alone has surprised more artists than almost anything else.
Sometimes It Really Is a Handshake
Here is the other side of all of this, because it would be dishonest not to say it.
Not every professional relationship in the music industry begins with a formal contract. Many of the best ones start with a conversation, a shared belief, and a handshake. A manager who believes in an artist before there is any money to make. A producer who works on spec because they think the project is worth it. A booking agent who puts an act on a bill because they have a feeling.
These relationships, built on trust and mutual investment before the paperwork, are often the most durable ones.
The question you need to ask yourself, before and after you've done all your research and taken all your advice, is the simplest one:
Am I happy to enter this relationship, on these terms, for this amount of money?
Not: is this the perfect deal? Not: could I theoretically negotiate a better clause on page seven? Not: what would someone else do?
Am I happy with this? Does it feel right? Do I trust the person on the other side of the table enough to build something with them?
If the answer is yes - if you've done your due diligence, taken your advice, and you feel good about the partnership - then sometimes the most powerful thing you can do is shake hands, commit fully, and get to work.
Contracts matter. Legal advice matters. Understanding what you're signing matters enormously.
But at the end of it all, the relationship is what does the actual work. Make sure it's one you want to be in.