Sunset Clause
A provision that reduces or eliminates a manager's commission on deals after their contract ends.
Definition
A sunset clause gradually phases out management commissions on deals secured during the management term. Rather than a manager earning 15-20% forever on a deal they helped close, the percentage decreases annually after the relationship ends.
Typical structures reduce commission by 3-5% per year until reaching zero over 3-5 years.
Why It Matters
Without sunset clauses, artists pay ex-managers on old deals while also paying current managers on new work. The financial burden can be crushing.
Fair sunset terms respect the manager's contribution while not indefinitely burdening artists after relationships end.
Examples in Practice
A manager secures a record deal then parts ways with the artist. The sunset clause reduces their album commission from 15% to 10% after year one, 5% after year two, then zero—rather than 15% for the life of the deal.
An artist with no sunset clause pays 20% to a former manager on their debut album for 20 years while building their career with new representation.