Most of us remember the scene in " Jerry McGuire" where the athlete's father entered into an agreement to retain McGuire's services as an agent with a handshake. Stating that his word was "stronger than oak", the father told McGuire that he would allow him to represent his son in the NFL draft.
Well, we all know how that "agreement" ended...McGuire ended up losing the number one draft pick, "the night before the draft" and there was nothing that could be done about it since there was not a written contract between McGuire and the athlete (see "Jerry McGuire stronger than oak handshake" video below).
That got me to thinking...are the days of negotiating merely via trust and integrity without the written letter of a contract obsolete? The answer that I came up with is....YES!!!
Contracts have become a necessity among any parties entering into a contract; especially an artist management contract that can be ambiguous, convoluted and because of the money involved, risky.
Some artists and managers claim to have such good working relationships that a written agreement is unnecessary. These types of arrangements can be successful. However, a contract still is recommended because it allows the parties to outline and define their business relationship in writing. This helps to avoid disagreements or discrepancies that may arise later if the parties cannot remember exactly what their agreement was.
Before a manager and artist sign the written agreement the parties usually negotiate important issues that each party feels needs to be addressed in the contract. Negotiation is a process of discussion to determine each party's needs and concerns; successful negotiations always are based on compromise and solutions.
The most important issues to be addressed in the contract are
- the term, or time frame, of the agreement,
- the services to, and/or responsibilities of, each of the parties,
- compensation to each party, and payment of expenses, and
- the authority of the manager.
With entertainment careers becoming the most highly sought after and with more and more money attached with the roles of successful actors (just think Charlie Sheen), it is highly advantageous for both the manager and the artist to draft a written agreement that each party agrees upon to outlines all of the pertinent components and expectations of each party in the relationship.
Over the past decade, numerous artists have fired their management team, for various reasons, with only the letter of the contract to guide and gauge each party's culpability. It's quite a sad state of events that we can not negotiate verbal contracts, however people's memories become vague and the terms change as the success or failure of the artist's career increases.
So, be prudent and understand that an agreement is structured to protect both parties...just in case. After all, in this day and age, the only thing that should be "stronger than oak" is the ink on the paper from the oak tree used to draft an effective management agreement.
