If you are an agent representing models, singers, actors or other performers, you must ensure that your arrangements comply with entertainment industry regulations. These rules will dictate what type of agreement you can use to sign a performer, including:
- what you can pay them; and
- how you can handle their money.
In this article, we will explain when you would need an entertainment industry managerial agreement and the obligations this will come with.
What Type of Agreement Do You Need?
You will need to enter some form of agreement with your clients if you engage talent as a ‘performer representative’. A performer representative is any person who provides services to performers for financial benefit.
There are two types of agreements a performer representative can use to engage their performers, including:
- entertainment industry agreements; and
- entertainment industry managerial agreements.
Entertainment Industry Agreements
An entertainment industry agreement is a standard contract entered into between a performer representative and a performer for ‘standard services’. Standard services include:
- seeking or finding work opportunities for a performer;
- negotiating arrangements relating to attendance of the performer at a performance; and
- finalising agreements relating to the payment of the performer.
These agreements limit the amount of fees you can charge a performer. For film, television and media, you can only charge a commission of up to 10% of the total amount payable to the performer.
The same 10% cap is placed upon live theatre and musical performances for the first five weeks of a show. However, after five weeks you can only charge a 5% commission.
Finally, you cannot charge a performer fees for:
- joining;
- auditioning;
- retention; or
- entering a contract.
You can make this agreement verbally or in writing.
Entertainment Industry Managerial Agreement
You will need an entertainment industry managerial agreement if you want to charge additional fees that exceed the capped amount under entertainment industry agreements.
The additional services you may offer may include:
- career assistance;
- production and development of a suitable photographic portfolio; and
- matters relating to public relations and advertising.
You will also need to ensure that the agreement you enter into with a performer meets specific requirements.
Key Requirements for Entertainment Industry Managerial Agreements
To ensure that your entertainment industry managerial agreement is legally sound, you must:
- make the agreement in writing;
- acknowledge any additional fee that you charge on top of the standard 10% cap;
- explain the additional services that you provide in exchange for any additional fees you charge; and
- include a three day cooling-off period where the performer can seek advice and terminate the agreement without penalty.
Other Considerations
Regardless of whether you are engaging a performer under an entertainment industry agreement or an entertainment industry managerial agreement, there are additional factors you must consider. This includes:
- providing your clients with a performer factsheet from NSW Fair Trading;
- holding payment received on behalf of your performers in a trust account and distributing that money to the performer within 14 days of it being received, in cases where the money is not paid immediately; and
- keeping accurate financial records and making them available to performers upon request.
It is also a good idea for your agreement to outline:
- whether you will be their exclusive agent or they are permitted to work with other agents;
- whether the performer can terminate the agreement at any time or the agreement will last for a specified term;
- what authority your performers grant you to act and sign contracts on their behalf; and
- who owns the intellectual property that the performers create in the course of work.
Consequences for Non-Compliance
There a range of penalties you may face if you do not comply with the regulations required for performance representatives, including:
- fines;
- temporary or indefinite bans from operating your business; and
- having to pay compensation to performers for any loss or damages they incur.
Key Takeaways
You should use an entertainment industry managerial agreement if you want to charge your performers more than the 10% cap under a standard entertainment industry agreement. This agreement will outline the relationship between you and your performers, especially the additional services that you provide in exchange for whatever additional fee you charge. You should also consider other legal matters, such as:
- providing an NSW Fair Trading fact sheet;
- payment obligations;
- financial reports;
- exclusivity;
- termination;
- agency powers; and
- intellectual property.
If you need assistance preparing an entertainment industry managerial agreement, contact LegalVision’s contract lawyers today on 1300 544 755 or fill out the form on this page.
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