Not All Contracts Are Created Equal

As the year comes to an end, actors start thinking about all the changes they're going to make after the holidays. Some choose to get new headshots. Others decide it's time for a manager. That's fine, but you need to proceed with caution, because managers use contracts that are very different from the one agents use.

The term of a management contract is usually two years. You should never agree to more, and most managers won't settle for less. That's why you need to make sure you're signing with the right person. There's no lemon law in the entertainment industry. If you choose the wrong manager, you don't get to change your mind. (Agents expect you to sign for one or two years, but our contracts have an out, which allows you to leave if you don't book a job in three months. Management contracts don't give you this option.)

When it comes to commissions, agents are locked in at 10 percent, but managers have a lot more flexibility. Back in the day, they would take 15 percent, but the standard has dropped to 10, especially if the actor has an agent. I've also seen agreements where the commission is based on gross earnings. For example, the manager will be entitled to a 15 percent commission if the actor makes less than $50,000 a year, but only 10 percent if the actor earns more. Under no condition should a manager ask for a larger piece of the pie. That's a nonstarter.

So what exactly does a manager get to commission? The answer is—everything. I'm talking about theatrical, commercial, stage, Web content, and any other form of acting that involves compensation. But wait! It gets better. In theory, managers are supposed to oversee all aspects of your career, not just the acting side. So if you write and sell a script in your spare time, the manager is entitled to a commission on that deal too.

Now let's take a closer look at two shocking paragraphs from a management contract that slithered across my desk recently.

1) "Artist will reimburse manager for expenses other than ordinary office expenses and overhead."

This language is too broad. There have to be limitations on those so-called "expenses," and you should have the right to approve them in advance. As the sentence is written, a manager could take his girlfriend out for an expensive dinner and then bill you for the meal, claiming his date was an important casting director interested in your career.

2) "Artist hereby appoints Manager as his true and lawful attorney, to sign, make, execute and deliver any and all contracts in Artist's name, in connection with the engagement or employment of Artist's services in the entertainment industry as contemplated by this Agreement, and to do and perform all things necessary and reasonable in the performance and prosecution of such engagements or employments, in as full and ample a manner as Artist might do personally if present, giving unto Manager full power to do whatever may be requisite and necessary in connection therewith, hereby ratifying and confirming all that Manager has or may do or cause to be done by virtue thereof."

Basically, if you agree to this scary language, you're granting the manager power of attorney. That means he or she can enter you into a binding legal agreement without your consent. Yikes! Does that sound like a good idea?

Most managers are hard-working professionals with the best intentions. They won't allow you to sign their contract until you understand every single word. But there are a lot of bad apples in the industry orchard. That's why you need to seek the advice of a professional, ideally an agent or a lawyer, before you sign a management contract.

Stay tuned, because next week I'm going to help you create some resolutions that'll help you get off to a promising start in the new year.