What is Exclusive Management of an Influencer: Influencer Management Issues
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 an influencer can get. And you will ultimately sign a contract as well, which 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, 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.
Influencer Marketing Agency Concerns
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 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. Other topics of interest include:
- When Does an Agent No Longer Have Access to Influencer Data?
- How Can an Influencer Terminate a Management Contract?
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.
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 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 business savvy as a reputable marketing agency. An agency will 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.
Most Influencers Have Exclusive Influencer Talent Management
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.
Influencer Management Contract Termination
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.
Can a Marketing Manager Influence Success or Failure?
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.
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 influencers should agree to. So, that’s how an influencer can terminate a management contract.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!
