As content creators, influencers, celebrities and/or artists (Talent) start building momentum in their careers and look to start working (or increasing their work) with brands, publishers or broadcasters, Talent may look to engage the services of a talent management agency (Agency) to find commercial opportunities to further their careers. This may be a defining moment in the Talent’s career and Talent will need to research and consider various factors such as the current roster of Talent the Agency manages and the credentials of the Agency manager who will be sourcing and negotiating the opportunities. Once the Talent has identified an Agency it wishes to work with, the Agency will present the Talent with a talent agency agreement or talent management agreement (Talent Agency Agreement) setting out the terms and conditions under which the Agency will represent the Talent. But what are the key provisions that you would expect to find in a Talent Agency Agreement?
Key provisions in a Talent Agency Agreement
This is essentially the ‘fee’ or ‘commission’ that the Agency will receive in return for the services it provides to Talent (Management Fee). This will differ between Talent Agency Agreements but can be anywhere between 10% and 20% of the fee Talent is to be paid. The Management Fee the parties will land on is largely a commercial point and will often be determined by the bargaining power of the parties as well as the industry knowledge of each party’s advisors. For Talent, it will be more favourable to negotiate a lower Management Fee and likewise for the Agency it will be more beneficial to negotiate a higher Management Fee.
From the Talent’s perspective, it is important to consider if the Management Fee is to be calculated from the gross fee paid (i.e., total income) or if it is calculated after deduction of the Talent’s and/or Agency’s expenses (i.e., the net fee). The Talent should also ensure that the Management Fee is only payable to Agency once the fee has been received by Talent (or by Agency on Talent’s behalf).
Sunset clause for Management Fee
It is in the Agency’s best interests to insert a sunset provision which entitles the Agency to continue to receive its Management Fee from contracts sourced on the Talent’s behalf following expiry or termination of the Talent Agency Agreement. Often, the sunset clause will provide for a long-stop date (e.g., three years after termination of the Talent Agency Agreement) for the Agency to continue to receive its Management Fee. For Talent, it will be in the Talent’s best interests to reduce this long-stop date as far as is possible so that the Management Fee payable to Agency does not continue indefinitely.
Perhaps the most negotiated point in a Talent Agency Agreement is exclusivity. A Talent Agency Agreement will often contain an exclusivity clause appointing the Agency on an “exclusive worldwide basis”. Such a clause would mean that the Talent cannot engage another talent agency to source, negotiate and/or enter into contracts on Talent’s behalf. There may also be provisions restricting Talent from entering contracts itself whilst the Agency is appointed on its behalf.
Talent should also consider the following points:
- What types of opportunities the Talent is seeking, and the Agency’s expertise and industry contacts for such opportunities
If Talent is involved in multiple creative industries such as film and tv, music and sport, the Talent should look to limit the Agency’s exclusivity to those industries that Agency has particular expertise in. Otherwise, Talent may inadvertently agree to give Agency exclusivity in industries where Agency has no prior experience or connections.
- Whether Talent currently works with any other talent agency
If Talent already works with another talent agency, both the Talent and Agency should consider the scope of the current engagement and ensure that the Talent Agency Agreement does not conflict with the pre-existing arrangement. It is not uncommon for high-profile Talent to engage multiple talent agencies to look after its affairs in different territories or industries, and this should be acknowledged and built into any agreement.
- Exclusions to exclusivity
From the Talent’s perspective, Talent may want to include relevant exclusions carving out certain types of income from the Management Fee. For example, Talent will want to exclude any brands it has established working commercial relationships with prior to engaging Agency. Talent should try to negotiate so that any of these pre-existing relationships and the corresponding income Talent receives is outside the scope of the Management Fee.
Term of the Talent Agency Agreement
As with any agreement, it is important for the parties to understand the length of their contractual relationship. Typically, the term of a Talent Agency Agreement will range anywhere between six months to three years. For Talent engaging their first Agency, it is advisable for Talent to try to negotiate a relatively short initial term (e.g., a one-year initial term). This allows the Talent to assess the value the Agency brings commercially and whether it wishes to continue the relationship or seek the services of an alternative talent agency. If Talent agrees to a lengthy initial term, it would be worth considering inserting a termination for convenience right in Talent’s favour to allow Talent to terminate the relationship on reasonable notice.
The above provisions are often the most negotiated clauses in a Talent Agency Agreement. However, Talent Agency Agreements can be complex and there are other clauses which both parties will need to pay close attention to. These include limitation on liability clauses, warranties, indemnities, audit provisions, approval of expenses, as well as provisions on intellectual property and image rights. If you need any assistance negotiating your Talent Agency Agreement, please do get in touch.