Commission Structure
The percentage and terms defining how a manager's payment is calculated from artist income.
Definition
Commission structure defines what income is commissionable, at what percentage, and with what exclusions. Standard management takes 15-20% of gross income, but sophisticated deals specify touring commissions differently than recording, and may exclude certain income.
Structure matters more than headline percentage—a 20% deal with good exclusions may cost less than 15% with everything commissionable.
Why It Matters
Commission structures determine how much artists actually take home. Poor structures create misaligned incentives where managers benefit from deals that don't serve artist interests.
Clear structures prevent disputes and ensure both parties are motivated toward the same goals.
Examples in Practice
A touring-focused artist negotiates 15% commission on recording income but only 10% on touring after break-even, since high touring costs reduce actual artist profit.
A manager takes 20% of sync licenses but 0% of publishing royalties they had no role in generating, recognizing the difference between one-time deals and passive income streams.