What is a Standard Influencer Management Commission? | Influencer Marketing
What is a standard percentage of commission that a social media influencer management company will take? At some point, if you’re an influencer and you get big enough, you may want to reach out and try to find some assistance in securing some more sponsorship opportunities. And you’ll do that by finding an individual agent, an agency, a manager, or a marketing management agency. It’s all the same thing. Their role is to go out and bring the influencer deals that they might be interested in. And then for that, they will get a percentage of whatever the compensation that’s paid to the influencer for the sponsorship opportunity. Before the management company starts looking for potential deals for the influencer, they will sign an exclusive management contract.
And then that contract will dictate the terms of their relationship, so how long it lasts, how it can be terminated, what are the expectations of the influencer, what are the expectations of the management company, and then included in that would be how much, or what percentage of the compensation that the influencer receives goes as commission to the marketing agency. A standard amount would be around 20%. Now, everything is negotiable. There is certainly wiggle room to bring that down if you are an influencer, however, just like in any industry, the better someone is at their job, the more they can charge. And so, if you find a rockstar agent, and they’re certain they can bring you from this level to this level, but they’ll charge 2% more, 5% more, or whatever percentage than somebody else, well, you’re going to have to make a decision and kind of do a math equation of, alright, I could go with someone who may not have as much experience for 10% or go with someone who’s extremely experienced for 25%. Will that 15% difference be made up in all the better, higher-paying, higher volume of opportunities that a more experienced agent may bring?
I can’t answer that question. You’re going to have to make that determination on your own. But those are kind of the standard commission percentages. One thing to think about: in any kind of management contract, it’s going to state what happens after the contract ends. Let’s say the influencers, for whatever reason, decide to move on from the manager. They’ll give notice and the contract is going to state how much notice must be given, somewhere between 30 to 120 days is standard. You would still have to work with the management company for that period, depending upon the language. Other topics of interest include:
- Is there a Non-Compete in an Influencer Management Contract?
- How can an Influencer Terminate a Management Contract?
But then this is the important part: there’s going to be clause that states, if the influencer leaves, they will still owe a commission percentage to the management company for a period after the contract ends. So, for any of the sponsors that they brought to the influencer, let’s say the management company brought a meal prep company that’s interested in working with the influencer, and then they’ve been working together for a couple of years. Well, after you terminate the contract with the management agency, you don’t just automatically get to keep all of the money from that meal prep company. If they wanted to continue working with you, you’d have to pay 20% back to the old management company, usually for one year after the contract is terminated. This is simply a way for a management company to make certain that they don’t bring deals to an influencer.
Influencers Commission to a Manager
And then the influencer terminates the contract, takes those deals, then avoids having to pay the 20% to the management company. That’s an industry-standard restriction after a contract ends. Now, what you could negotiate is the length of the restriction, the percentage that the management company will get during that period or limiting the look back. In most contracts, it’ll state any deal that they brought to you during the relationship between the influencer and the management company. So, if it’s been a five-year relationship and they brought you a deal in year one, you haven’t worked with that brand for four years, and then they come back to you after you terminate the contract within that one-year period, theoretically, the management company would still be owed 20%. So, you want to limit that look-back period. One year is what I would consider a reasonable amount, someone might consider a longer than that.
But it’s the role of anyone who’s advising you to tell what would be advantageous to you. And I would say limit to one year, looking back, and then one year going forward, that would be considered a reasonable amount. You could also reduce the percentage that the management company receives, maybe quarterly, so every three months, go from 20 to 15 to 10 to 5. And then after that one-year period, it’s over with. So, 20% is kind of an industry-standard amount. Could be more, could be less, but that’s about the average.
If you are an influencer, at some point, you will likely reach out to an agency, a specific agent, a manager, or someone who’s going to facilitate the sponsorship opportunities that any influencer can get. And you will ultimately sign a contract as well, which kind of dictates the terms of the relationship between the influencer and the agency. In all those types of contracts, there’s going to be a clause that’s called exclusive management. And this is going to dictate what the influencer can do and can’t do. Exclusive management simply means that whoever you sign with is going to be the only party that facilitates deals between you and a brand. So, even if, let’s just say a brand contacted the influencer directly, if they had an exclusive management contract, it’s very likely there will be language in there that states even if we had nothing to do with this deal, if someone contacts you for opportunity, you must refer them to the agency.
And then the agency would be the ones that undertake the negotiation with the sponsor and then they would reach agreement. And then that opportunity would be presented to the influencer. Additionally, it’s the job of any manager or agency to go out and find deals for the influencer. And once again, they would be the only party that would be allowed to do that. Even if you had a friend that came to you with a deal, or even if another agent came to you with a deal, if you have an exclusive management contract with an agency or an agent, they will not be able to get compensated for whatever they bring to you. You would be required to refer them to your agency. And then once again, they would be the ones to facilitate the opportunity.
Now, why is this? Quite simply. If someone is managing you, they’re going to want to benefit from the commission percentage that’s been negotiated between the two parties. 20% is kind of an industry-standard amount. If someone brought to you a sponsorship opportunity and it was 2000 a month, something like that, if they got 20% of that, every month that you would get paid, the manager would receive 20% of 2000. And then that is how the compensation would occur between the two parties.
There are also clauses that likely will state if the influencer decides to terminate the management agreement, any sponsors that the influencer has had a relationship with while with the management company, they’ll still have to pay the commission percentage for a period after the contract is terminated. Most of the time, that’s one year. Let’s say you established a relationship with a meal prep company. And then you decide, you know what, I’m going to move on to a different manager, but the meal prep company still was like, hey, even though you’re not with the manager, we still want to associate with you. The contract would likely state if it’s an exclusive management contract, that even if they are no longer your manager, you still must pay them the 20% for a year after the contract terminates. That’s standard.
Influencer Marketing Agencies Commissions
I mean, obviously, the biggest fear of any management company, is they’re going to bring a bunch of deals to an influencer, the influencer terminates the contract, and then they essentially avoid having to pay the 20% to the agency or manager, whoever brought them the deal. Now, where you can negotiate is certainly the amount of time after the contract ends, that kind of payback percentage would last, and then the percentage of what the agent or the manager would receive is also something that’s negotiable. Are exclusive management contracts good or bad? Well, on the most part, they’re good. Most influencers are not as savvy as a reputable marketing agency. And they have established relationships with companies, and they have a broad reach and they can generally bring you things that you either wouldn’t know how to bring to yourself or have the contacts to facilitate those deals.
And then the agencies can also push their people onto the different marketing opportunities and say, hey, look, we have a client, they fit this profile. We think they’d be a great match for your brand. And for the most part, an influencer, although they could do those things themselves, it’s much quicker and kind of establishes their identity and brand faster if they’re working with a marketing firm or an agent or a manager. There will be some people who tell an influencer, you know, I can do all of these things for you. And the percentage may be even more than 20%. Always look to see what’s the track record of this person, who else have they represented, and even contact the people that they’ve represented to determine if they’ve done a good job.
Usually, people who are bad or burn influencers can get a bad reputation quickly, and that spreads amongst the influencers and you can kind of figure out, alright, this person is just trying to take advantage of the influencers. But always do your due diligence when you are about to sign an exclusive management contract because there will be repercussions after the contract ends.
How can an influencer terminate a management contract? Most influencers will have either an agent or a manager or maybe even a marketing agency working for them. And then you should have a contract with them and there are times where it might just not work out and the influencer is interested in terminating the agreement and then determining what the implications are if they terminate the agreement. In any kind of contract, there’s going to be a section that states how you can terminate the agreement, normally called termination. And there are generally four common ways you can terminate a contract. One, your influencer management contract is going to have a term.
And the term just simply means how long it lasts. Somewhere between one all the way up to five years is kind of a normal amount for an influencer management contract. And then it will state after that initial term if it automatically renews or not. Many contracts, let’s just say it’s a one-year term, will just state if neither party terminates the agreement, it’ll just automatically renew for successive one-year terms that just kind of go on forever until terminated. There are some contracts that don’t have that language, and it’s just a fixed term, meaning, it’s one year and that’s it. And in that scenario, if your contract ended after a year, neither party renewed it, it’s done. The contract is terminated. The second way would be through mutual agreement. If either party, for whatever reason just said, you know what, this isn’t working out, regardless of what the contract says, I’m just interested in kind of washing our hands of the situation, moving on.
That would be another way you could terminate the agreement. The third way would be with cause. There are things that both parties must do during the term of a contract. And if one of those parties is breaching the contract, so they’re not kind of fulfilling the terms of the agreement, let’s say you’re an influencer and your agency or manager simply stopped providing you or reaching out to find you deals or something, and they’re just not doing the job that they were contracted to do, well, you would find them in a breach of contract. In most well-written contracts, it’s going to state how you can provide notice of the breach. And then normally, there would be what’s called a cure period. If the manager was in breach of contract, you would give them a letter that states, here are the things you’re doing to breach the contract, and then there’d be cure period normally. And a cure period would be basically an amount of time that the manager or agency could fix whatever the breach is. And then the influencer could not terminate the contract with cause. That’s the third way, with cause termination.
And then the last and the most common way is without cause termination. Without cause termination simply means either party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other party. In most influencer management contracts, it’s going to be somewhere between 30 to 120 days’ notice. And what that would mean is if you’re the influencer and you were just unhappy with the agency, you would give them the, let’s say it’s a 60-day notice. And then both parties would kind of work through those last 60 days. And then at the end of that, they could move on and find new management. Now, there’s usually one kind of, I guess, thing that sticks with the management contract.
Influencer Marketing Agency Contract Termination
And that would be if you had any sponsoring companies while working for the management company, and obviously, if they were worth what you were paying them, they should have plenty of sponsoring companies for you. There will usually be a clause in the contract that states, for a period after the contract ends, you can’t work with that sponsoring company. For instance, if a manager brought you a deal for a meal prep company and they said, alright, you must give one 90-second spot once a month for every YouTube video you do. Well, you couldn’t go back to that same company the day after the contract terminated and tell them, hey, I want you to pay me directly from now on. And the reason why most management companies do that is they don’t want to bring an influencer deals.
And then most management companies get around 20% commission. So, whatever they bring the influencer, they’re going to get 20% of that. They don’t want to bring them deals, have the influencer terminate the contract, and then just basically circumvent having to pay the management fee or commission. One year is kind of a standard amount for that. Now, certainly, that’s negotiable. I’ve seen some that I would consider completely unreasonable are four, or five years in length and that’s not something any influencer should agree to. So, that’s how an influencer can terminate a management contract.
Breaking Your Contract
Can you break an influencer management contract? One thing that I find kind of gets confused is when someone considers breaking a contract, meaning, breaching it, or just simply terminating a contract, and let’s go over the difference between the two. If you’ve signed a management contract with an agency or a manager, there will be clause in that contract that states how the influencer can terminate the agreement, meaning, end it. And for the most part, there’s four ways that you can terminate a contract. If it’s for a fixed period and it doesn’t renew, let’s just say it’s a year, either party wants to renew, the contract ends, it’s terminated and that’s it.
You could terminate it by mutual agreement. At any point, even if there are clauses in the contract that state a certain amount of notice that must be given, you can just say, you know what, it’s not working out. Let’s just move on. If both parties agree, then you can move on. The third way is for cause termination, meaning, one party has breached the contract. Let’s just say you’re an influencer, your management company continues to pay you slowly, or they’re not paying you the correct amount, you’d send them written notice they’re in breach of a contract. Then normally, they’d have time to fix that breach, called a cure. And then if they haven’t fixed the breach at the end of that cure period, you could terminate the agreement immediately.
And then the last way to terminate a contract and the most common way is without cause termination. And that just means either party can terminate the agreement at any time, for any reason, with a certain amount of notice to the other party. Somewhere between 30 to 120 days is kind of a standard amount of notice in a management contract. If you are the influencer, the shorter amount of time, the better. I mean, if you decided to end your relationship with a manager, you don’t want to work with them anymore, the longer that you’re forced to work with them, or kind of sitting there waiting to find a new manager is not great. So, you want to keep that as short as possible. There are a couple of things that can also happen after you terminate the contract. Once again, breaking a contract also just means terminating the agreement. There will usually be a provision in almost any exclusive management contract that states the influencer will have to pay whatever the agreed-upon percentage of commission after the contract is terminated for a period, usually, one year with any brand that the management company has brought the influencer. Let’s just say the influencers brought a deal with the skincare company, from the management company, they agreed to it, they’ve been working with them for years.
Influencer Still Might Pay Management After the Contract Ends
Well, even if you terminate the contract with the management company, that doesn’t mean you have to stop paying them the percentage with that skincare brand. You would have to continue paying, let’s just say it’s 20% for the entire year after the contract ends, because they brought you that deal. I mean, the management company, the biggest fear of them is they bring an influencer deal, it’s a great deal. And then the influencer terminates the agreement, leaves, and then doesn’t have to pay any commission to the management company. That’s standard as well. Now, what happens if you sign a management agreement with a company and then you don’t want to go forward with it? That’s where I would consider breaking the management contract. Well, you still have to follow through with the notice provision.
So, if you sign the agreement, and you don’t want to move forward, you still have to give them notice. Now, obviously, you’re not forced to accept any sponsorship opportunities by somebody. If they were to say, hey, we have all these deals that we want to bring you. But if you’ve already given them notice that you’re going to leave, you don’t have to take them. But there may be language in there that states you can’t contract with any other management company until after that notice period is ended and the contract is officially terminated. That’s what I would think of breaking a contract. I do a lot of work with physicians and so physicians all the time will sign a contract and decide not to go through with the job. And then there’s a whole discussion of, alright, well, what are the repercussions here?
It’s a little simpler for an influencer because for the most part, not a lot of time, money, or resources have been expended if they’ve signed the agreement but haven’t even started working yet. Whereas with other professions, sometimes there’s licensure, you have to go through credentialing and insurance and all that kind of stuff. Anyway, that’s how you would break an influencer management contract.
Influencer Management Contract Terms | Influencer Contract Agreement
The market for social media influencer content is on the rise. IZEA, a social media marketing agency, publishes a report each year in which they detail some figures about how much influencers are being paid. For 2021, IZEA reviewed a total of $60 million in payments to social media influencers to see how that money was distributed. Here are some of their findings:
- Nano-influencers (1,000-10,000 followers) were paid an average of $901 per post. This is a 36x increase from what they were paid in 2015!
- Mid-tier influencers (50,000-200,000 followers) were paid an average of $3,087 per post. This is up 6.4x what they were paid in 2015.
- Mega influencers (500,000-1,000,000 followers) were paid an average of $6,786 per post. That is also up 4x compared to 2015.
The overwhelming trend in these numbers are that brands are willing to pay influencers much more than they were just years ago. It is also true that they are willing to pay for larger audiences. Both things are valid simultaneously, meaning much more attention is being paid to influencer marketing.
Social media influencers often appear to do all of their promotions and endorsements spur of the moment without a care in the world. Of course, this is staged just right to make it appear that way, even though much thought goes into what they do. Almost every aspect of an influencer’s endorsement is part of a contract they make with the brand or company they are working with. As such, we wanted to look at some of the terms contracts often contain to understand better the work-life an influencer has.
Influencer Contract Terms
Parties will clearly discuss the kind of content the influencer will produce for the brand ahead of time. Both sides of this transaction need to get together to determine what type of content they will put out and how that content will correspond with the brand’s overall strategy. The influencer management contract will contain a few terms within this aspect of the contract that includes:
- Exclusive Management Clause – A social media influencer manager will likely want to have a clause written into the contract that they offer their talent that dictates that they are to be the sole manager of that talent. This is done to ensure the content put out by the talent follows what both parties have previously agreed to.
- Length of Access to Data – Managers need access to influencer data to decide who to hire and how long. However, that data connection needs to be revoked after a while when the performer no longer works directly with the manager they originally signed up with.
- Non-Compete Clause – There is likely to be a clause within the contract that requires the influencer not to produce endorsed content for any other brand that directly competes with the brand currently signing them up.
- Commission – The manager will likely put in information about how much commission they expect to get for helping the talent find endorsement deals in the first place.
- Termination – There should be specific information about how an influencer can terminate the contract they have set up. This will make it easier for them to end an agreement not actively serving their purposes.
These are just a few aspects of influencer management contract terms. There are many more aspects of these contracts to consider as well.
Essential Requirements for Social Media Influencers
It is ideal to have all of the essential elements of an influencer management contract hammered out in specific detail within that contract. Failure to do so can mean that important aspects of the relationship get left out. Companies will want to make sure it is clear what their goals are for the relationship that they develop with an influencer that they pay to market their posts. Here are some examples of things that most companies want to ensure are a part of their overarching goals for the campaign:
- Increase Brand Awareness – Virtually every marketing campaign has been used in part to increase brand awareness, which is no different for social media influencer marketing. Brands want to ensure that they get their messages out to the broader public in a way that promotes who they are and what they offer in a way that is appealing to their target demographics via an influencer.
- Gain Traffic – Getting more traffic to a company website or driving sales in some way is a clear objective that the contract should spell out in the contract. Failure to improve the amount of traffic one receives to their website can certainly be a good enough reason to eliminate the contract deal you have set up with a social media influencer. You don’t want to continue offering a deal to such an individual if they are not providing your company with the type of returns you expect.
- Connect with a New Audience – Another explicit goal of the campaign can be to connect with a new audience you haven’t reached before. The value in doing this is that you can reach out to a group of people who might otherwise have never heard about your products or service. They may be interested in what you have to offer, but until you take the time to reach out to them, you will simply never know if this is the case. The influencer management contract terms can and should spell out this desire.
Have a Lawyer Look Over the Contract
It is highly recommended that you have an influencer management contract attorney review the contract you produce for your talented influencers.
The best-written contracts ensure everyone is on the same page as far as expectations are concerned, and the only way to reach that point is to use an attorney who knows how to create such a contract.
Please contact us today to set up a free consultation and get started with an experienced lawyer from our team.
What is an Influencer Management Contract? | Influencer Management Agreements Explained
What is a social media influencer management contract? As an influencer begins to grow, at some point, they will likely want to bring in a manager, agent, or marketing agency, all kinds of the same thing. Essentially, somebody will go out and try to find your sponsorships so that you can get paid for your cloud. You will absolutely want/need to sign a social media influencer management contract outlining the responsibilities between the parties. For example, you want to know how long the contract lasts, the terms of the agreement, and how parties can terminate the agreement. So, do you have to give notice? Is it a fixed term?
Social Media Influencer Agreement Terms
Does it renew automatically at the end of the initial term? How to terminate the influencer contract is certainly important. Obviously, what the manager/agent is going to do for you? Are they going to go out and reach for every type of marketing opportunity for you? Is it an exclusive management contract, meaning you must use them and can’t use anyone else? Who are you going to communicate with? How much are you going to pay them?
For the most part, influencer management contracts will have a commission percentage, meaning your manager will bring deals back to you, and then you’ll determine if you want to move forward or not. And then you’ll pay a percentage of that whole deal back to the manager. 20% is an industry standard. It can be more or less, but 20% is an industry norm as far as how much percentage of commission is paid back to your manager.
Influencer Expectations When Working With a Manager
What the expectations are of the influencer as well. Things such as, how often do you have to check in with your manager? Is there a software program that needs to be used to track the contacts with anyone else? If you go out and find a deal outside your manager, do you still have to bring it back to that manager so they can negotiate the deal? Do they get a percentage of deals you consummate that have nothing to do with the manager? For the most part, if you have an exclusive management contract, even if a deal falls out of the air, into your lap, and the manager has nothing to do with it, they’re going to require a percentage of that deal if they’re managing you. It may not feel great, but that’s just part of having an agent or a manager.
It Doesn’t End Once the Agreement Ends
Also, what are the obligations once contracts end? As I stated before, you’ll pay the agent/manager a percentage of whatever the commission is for the deals they bring you. Almost every agreement will have language stating, after the influencer contract ends for a period, any deal that they’ve got you that continues after the agreement ends, a percentage will still go back to them.
Let’s say you’re in fitness, and you’ve had a deal with a protein shake maker. If the manager brought you that deal, and you terminate the agreement, you’ll still have to pay them, let’s say, 20% for a year after the contract ends. Managers do that because they don’t want to bring an influencer deal. Then, the influencer immediately terminates the relationship, takes the deal, and gets out of having to pay the commission percentage back to the manager.
Influencers Can Shorten the Look-Back Period
A couple of ways of handling that: you can try to attempt to shorten the look-back period, meaning, if it’s a year, maybe get it down to nine months, six months, or you can also decrease the percentage of commission over time, so maybe in the first quarter, 20%, second quarter, 15, 10, 5, and that way, you’re not having to pay the full amount to your old manager, because that does not feel great, because you’re going to have new management and they’re not going to see a dime of any of the money from any of the old deals that continue for whatever that kind of restricted period is.
There’ll also be language in contracts stating what happens if there are disputes. You have arbitration clauses. Where is the venue if you have to litigate? Meaning you have to sue your old manager. Where does it happen? Is it where you live? Is it where they live? Is it in a different state where you provide notice?
Whenever you decide to terminate the agreement, you must give your manager proper notice. Does it have to be in writing? Yes, it will. What does it need to say? Where does it need to be sent? There are just a ton of things you need to think about that must be in the agreement before executing any management relationship with a manager or agent.
What Should an Influencer Agency Contract Include? | Agency Influencer Agreement
What should a contract between agents and influencers include? What needs to be in that influencer agency management contract? Before establishing any working relationship with an agent, a manager, an agency, whoever it is. An influencer contract that dictates the relationship’s terms needs to be in place. It should also contain the length of the agreement, how to terminate it, the agent’s and influencer’s responsibilities, what happens if there are a dispute, and examples of contract breach. Then obviously, the payment structure between the influencer and the agent.
Percentage Commission for Influencers
Typically, it would be a percentage of whatever the agent brings to the influencer. 20% is an average. Some of the most important terms in the influencer contract will also include what happens after the it terminates. Almost any agent will require some language in the agreement that states the influencer will have to pay the agent. Even after the contract terminates for a period, for any deals that the agent brought the influencer. Let’s say you are an athlete, and you have a sponsorship opportunity with maybe an apparel company. If the agent got you that deal, and even if the apparel company wants to continue the relationship, the athlete will usually have to pay 20% back to their agent for a year. That’s because agents don’t want to bring an influencer deal, then they terminate the relationship and get out of having to pay the commission to the agent.
Obviously, I would consider that reasonable and fair. Now, if the percentage is extended indefinitely, meaning the agent says, if I brought you this deal, you owe me 20% forever, that’s not reasonable. And that’s not something I would sign if I were an influencer. There must be a cutoff date, and you could even tear down the percentage over time. But that’s one thing that will likely be in the agreement. And that usually is negotiated.
Deals Based on Historical Metrics
Another aspect that I find people miss frequently is that you’re going to have deals with a set amount, and it’s based on historical metrics. You will have to provide these metrics to these companies. How many views do you get on a video, and what’s the average duration people watch them? What’s the interaction, and the subs versus non-subs? All that data goes to these companies, who decide on a reasonable sponsorship opportunity price. Well, if you have a deal based purely on metrics, you don’t know what you’re going to make until the video has been out there and calculations completed.
Your agent is always going to have access to all your content metrics. They will have access to your Instagram, TikTok, YouTube, or any of those things. Well, if a relationship ends, you almost always revoke access from the agent to those accounts. But if you have a compensation structure based purely on metrics, I can promise you the agent will want access to ensure they’re being paid correctly.
You Can Always Negotiate Terms with an Agency
Usually, there is a dispute if it’s not written in the influencer contract. So, there needs to be somewhere in the contract determining what will happen in that scenario. Suppose there is some deal based purely upon metrics. How will the agent access those numbers and understand that they’re accurate without full access to everything the influencer has? Because influencers are absolutely going to want to bar their past agents from getting into their current numbers.
You can always negotiate any term in an influencer contract. There’s nothing that’s ironclad, especially for an agency contract. Influencers have the leverage in these negotiations. The agent is going to make money off the influencer. And so, the influencer does/can exert some force in getting favorable terms.
If this is an excellent professional agent, there will be a limit to how much they want to change. They’re also treasured if they do a great job. And there’s always a push and a pull. But don’t think that if the agent says this is a take it or leave it deal, you need to leave it. There has to be some give and take in any contract negotiation. Alright, that’s what people should include in an agency influencer contract.
What is the Purpose of an Influencer Management Contract? | Influencers Agreement
What is the purpose of an influencer management contract? The purpose of any contract is so both parties can understand their duties and responsibilities when interacting with each other. A social media influencer management contract is a contract between an agency, a manager, a marketing company, or someone that’s going to oversee the career of the influencer, bring them sponsorship opportunities, negotiate the price associated with that opportunity and then facilitate the contracts between the influencer and those sponsors. Now, the management contract will be between the influencer and the manager. All the terms of the relationship in the influencer management contract must lay out. The most important terms in any contract, the same as an influencer management contract, are the term, meaning how long the contract lasts.
Influencer Contract with a New Manager
For the most part, influencer management contracts start at least somewhere between three to five years. That doesn’t mean if the influencer is unhappy with the manager, they cannot leave for the following reason. There will also be a section called termination. And then, that section will go over how either party can terminate the contract. Almost every contract will have what’s called without-cause termination. This means either party can terminate the contract at any time, for any reason, with a certain amount of notice to the other party.
If you are signing an influencer contract with an agency or a manager, you want to have without-cause termination in there. It would be improbable it wouldn’t be in there, but if it was absent from the contract, you could be in a horrible relationship with the manager and cannot terminate it if they’re not in breach of contract. And essentially, you’re stuck with many you don’t want to be with for years. So, you have to make sure that without-cause termination is in the influencer contract.
There will also be a section about compensation. So how much will the manager or agency get paid by the influencer? For the most part, it’s based upon a percentage of the commission. Whatever the sponsorship deal is with the influencer, the agent/manager will get a portion of that. 20% is the industry standard. Certainly, it could be less or more, but around 20% of whatever you make as an influencer will likely go to your agency or manager. Now, indeed, influencers can negotiate that. But that’s a standard amount.
What Usually Happens When Contracts End
What also needs to be in there is what happens after the contract ends. Every manager agency will put a clause into an influencer agreement that states that even if the relationship terminates, they will still receive a percentage of any of the deals they brought to the influencers for a set period. Usually, that’s one year.
Let’s say your management company got you a deal with the skincare line, then the influencer terminates the contract with the manager. Still, the skincare company wants to continue the relationship with the influencer. The influencer will still have to pay 20% to their old manager for a year. Managers do this because what they don’t want to do is bring a deal to an influencer. The influencer terminates the agreement, takes the deal, and does not have to pay any commission to their past manager.
This is an equitable term in the contract. Now, indeed, influencers can negotiate parts of this. Maybe shortening the time, they have to pay any commission to their old agent, or perhaps narrowing the commission percentage over time, which means, that maybe every quarter, if it starts at 20, then 15 in the second quarter then 10 in the third and five in the last.
And then the responsibilities of the parties are going to be laid out as well. What will influencers have to do? How fast will they have to respond? And in which way will they have to communicate? Will they have to post content about their management company, or is it just the sponsors? Who pays for travel? If there’s just a one-off, what will the percentage of that be for the agent?
Why Contracts are Crucial
I mean, there are a ton of things that influencers must consider in advance. The worst thing that can happen for a digital creator or influencer is to get into a bad contract with a manager, get taken advantage of, and maybe even have their career stifled in some way by not being able to pursue the best opportunities.
The last thing to think about is many influencers are surprised that most of these management contracts are exclusive. Meaning, even if a friend, another influencer, or another agent brings a deal to an influencer, they have to take that deal back to their manager if they’re in an exclusive management contract.
The manager will then negotiate it and still get 20%. Even if someone brings you deals independent of your manager, it’s very likely the manager will still get 20% of whatever deal. Is that fair or not? Well, that’s just part of having a manager. So, that’s the purpose of a management contract. It just lays out all of the responsibilities for both parties.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!