Shopping Agents and Managers? by Phil Frazier
What’s the difference between a Manager and a Shopping Agent (Signing Agent)? The short answer: A Manager usually shops a band to Labels and for other contracts. A Shopping Agent only shops.
A Manager usually earns a commission of the actual gross earnings of everything regarding the artist being represented. The average commission rate is 15%. Gross earnings means earnings before taxes or deductions of any kind. The Manager’s commission may include royalties of CD Sales, Publishing royalties, merchandising sales, live performances, film revenues, endorsements, any other revenues the artist garners in relationship to the Manager’s representation.
Some Manager’s take a commission from advances, although in my view they should not do so. The responsibilities of a Manager are wide ranging, as has been written about in previous articles. The Shopping Agent has only a specific task of making a good faith effort of securing the Artist various contract offers. It is the Artist’s responsibility to provide the Shopping Agent with whatever is required to work on this endeavor.
The Shopping Agent is not a consultant or in any way a promoter of the Artist unless that role is decided upon by the agent and the Artist.
Most Artists do not have a problem with the Manager receiving 10% up to 20% of the Artist’s earnings, yet many begrudge the Shopping Agent of receiving a commission. I have heard comments like: Why should a Shopping Agent receive such a high Commission, such as 10% of a Recording Advance for just making a few phone calls, which results in a Recording Contract offer? Of course, this does not take into account a number of possible factors, such as the many years that the Shopping Agent has been in business, the knowledge accumulated, the contacts accumulated, the savvy and sales skills that a Shopping Agent may possess. Also, it may require many more than several phone calls or sending out a few packages.
Even so, setting aside any of those factors, I say it does not matter if it takes six months of hard work for a Shopping Agent to secure a Label offer or other sorts of contract offers or one hour. The bottom line is: The deal. Could the Artist have secured that?
The Commission of a Shopping Agent varies in amount and kind. A standard fee is between 10 to 15% of a Recording Advance. It may also be 10 to 20% of the Advance of the first full CD Release & single CD release. It could be three points ( one point equals 1% ) of the Royalty Rate of all the releases of that Recording Contract that the Shopping Agent has secured. This could be three percent of a 15% Royal Royalty Rate, which is 20% of that. Shopping Agents can ask for whatever they wish. There are no restrictions. laws or rules about this. A Contract and Legal advice are strongly advised before anyone moves forward with this type of situation.
As a Manager and Shopping Agent, I always insist that Artists which I have sent a Contract to, seek the best legal advice they can afford. I have it written into the Contract that they have been advised by me to seek legal representation or waived their own right to do so. Of course, it is foolish not to seek legal advice before signing a Contract, yet I know of many who have not done so to save money or they claim that they could not afford to do so.
This article is not meant to be full explanation regarding the topic. It is a brief overviews. I strongly encourage all artists to read at the minimum three books on the music business. If you cannot afford to buy books, please do not use this as an excuse. Public Libraries do have books on the music business. OK I am a little sarcastic at times but I am serious, as well.