Influencer Management Contracts | Contract Agreements
There is always a temptation to assume that your manager is always putting your best interest first when you have someone who takes care of your day-to-day business operations, but that is not always the case. Think about the members of the 90s pop band “The Backstreet Boys” and how they were taken for a ride by their manager Lou Pearlman. In that case, Pearlman was dead set on scamming the pop band out of their hard-earned money from the start. However, he was so charismatic and charming that many couldn’t believe that he had done all that he had to scam the boys (and many others that he represented).
The Pearlman case is an extreme example of injustice by a manager, but it is also a cautionary tale for anyone who thinks that their talent agents and others who are given responsibility over some portion of their money-making abilities always do things that are completely and totally ethical. This is one of the reasons why it is important for an influencer management contract attorney to always go over all of the documents that are presented to you as an influencer. You are simply better off safe than sorry when it comes to these types of things.
Contract Terms That are to be Expected
Contracts do need to have rules and stipulations to them, and there are certain things that all talented influencers should expect to come in any contract that they take on. That is to say that not everything that is noted in a contract has to be looked upon with suspicion. It is best to evaluate on a case-by-case basis. Here are a few ideas that you would expect to be in influencer management contracts:
- Terms of Employment (of the manager) – There should be definitions of what the manager’s responsibilities are and what they need to do for their agent in order to remain employed by that influencer. This is to say that it is vital that the manager has everything spelled out for them in precise detail to ensure that they know exactly what is expected of them in meeting the terms of their contract. Failure to place these specific terms in their contract could leave too much room for misunderstandings, and no one wants to put themselves in that position.
- Objectives That Must Be Met – The manager needs to bring in a certain amount of business for the influencer for their services to be worthwhile at all. A contract that details those objects can be a very powerful contract indeed. After all, it is always nice to know that everyone is shooting for the same targets in these situations.
- Compensation Structure – There are numerous ways that compensation may be worked out between influencers and their managers. If a manager sees that they are likely attaching themselves to a superstar influencer, they may be more prone to look for ways to cash in on what they see as a lucrative career ahead. Thus, it is entirely possible that a manager will seek to earn some share of the future profits that the influencer generates in the course of their work. Influencers should be somewhat wary of this as they don’t necessarily want to give away too much of the equity that they have in their own future earnings.
These are all typical terms in influencer management contracts that one might expect to see. The last point about compensation structure is one that should be paid particular close attention to simply because this is where some managers will try to slip in clauses that entitle themselves to more than they are honestly worth.
Is it Necessary to Have a Lawyer Look it Over?
You are not legally obligated to have a lawyer look over your influencer management contracts by any means, but you should certainly consider doing so in order to avoid any outcome that you don’t want to see. It takes a short period of time and a small amount of money to get a lawyer to look over what you need them to, within the contract that you are working on.
When you do hire a lawyer like this, you can ask them to kindly review the contract that you have received from a manager line by line. The benefit that you get from this is to have an attorney sign off that everything looks legitimate to them. Instead of spending excessive amounts of time worrying about what may or may not be contained within a contract that you might be signing, why not spend that time working out the details of how you will construct your next videos for social media?
It is more challenging to be a social media influencer than many people believe, and it takes a lot of work and concentration to pull off. This is impossible to do if you are always worried about scanning through every contract.
How We Can Assist Today
There are plenty of things that we can do to help you out. When dealing with a contract with a manager that you might want to hire, we can help. Here are a few of the things that we offer to everyone who schedules an appointment with us:
- The chance to look over every piece of information contained within a contract
- A one-on-one meeting with you to talk about the features of the contract that you are proposing
- Recommendations for suggested edits to your contract to make it more applicable to the situation that you find yourself in
- Formating recommendations to ensure that all elements are included in a standardized way that you can use again
If you are in need of a manager, you’ll need to ensure any potential contract is quickly reviewed. Therefore, we highly recommend that you contact us in order to start the process. It takes a while to get things just right, and this is why we want you to start the process by calling our offices today. It is the best and only way that we can start working on your case.
Other Blogs of Interest
- How Long are Most Influencer Management Contracts?
- Can an Influencer Break Their Management Contract?
- Do Influencers Pay Their Managers?
Do Influencer Managers Have Contracts? | Need for Safe and Fair Influencer Management Agreements
Do influencer managers have contracts? In short, they better have. Suppose you are an influencer and have decided that you’ve reached a level where you think some professional representation would help you move forward. In that case, you’re going to look for an agency, a manager, a management company, or an agent. It’s all the same in the influencer realm. Outside, in other industries, like with actors, some legal definitions and laws, especially in California, dictate the different roles a manager, or agency, can have. They must be licensed through an agency. There’s a cap on the percentage they can take. Whereas in the influencer arena, at least as far as the date of this blog, it’s a gray area.
Influencer Marketing Contract Concerns
And there’s not a lot of regulation of the industry. Most of any management is all lumped into one big pot, even though they might be called something different. Suppose you have reached a point where maybe you found a social media influencer manager or an agency you’re interested in associating with. In that case, there will be, or at least they will require, an exclusive management contract between them and you. That influencer contract will dictate all the terms of the relationship between you and the manager. The length of the agreement, how to terminate it, the commission percentage or flat fee paid to your manager, and what happens after termination. There are some things you’ll have to continue paying the manager after the agreement ends. And there’s language in there about that.
What if There’s a Dispute?
What happens if there’s a dispute? Where is that dispute heard? It’s called the venue. The responsibilities of the manager, of the influencer. The entire point of a contract is that if there are some disputes, it should be spelled out in the contract as far as somebody is in breach. Is someone not doing what they said they would? In that scenario, a contract helps avoid and resolve disputes without going to litigation or arbitration or depending upon what’s in the contract. If you find someone and they say, you know what, I don’t want to make this a formal thing.
Let’s just handshake, verbally agree to the payment, whatever, that’s an enormous red flag, and no influencer should go into that for a couple of reasons. In almost any management contract, there will be some language stating that after the contract terminates, the manager will still receive a percentage of any deals they brought to the influencer for a period. Usually a year.
It’s Usually an Exclusive Management Contract
Also, it will have language that states the exclusive management for the influencer. Maybe if a friend, another influencer, or a sponsor reaches out directly to the influencer and says, here’s an opportunity we’d like you to take, there will be language in the contract that states the manager has to be given all of those deals, no matter what. And they’ll still get a percentage of those deals, even if they initially didn’t bring them to the influencer. And then also, how did the relationship end? Do you have to give some notice, which is typical in a contract? What happens if one party is in breach of contract? Does the agreement automatically renew after the initial term? Influencers have to figure out all this stuff in advance. Going into a relationship without a contract is a recipe for disaster.
Content and Brand Language in Influencer Contract
Now, if you are an influencer and you’ve received a management contract, it needs to be reviewed by an attorney. It’s just reality. Some say, ah, I don’t want to throw down the money. When I review many employment contracts for healthcare providers and physicians, we can save or gain hundreds of thousands of dollars for these physicians. And they’re concerned about spending a tiny fraction of that on a review. If you’re doing it the smart way, you need to get a review from somebody. That person can assist you in knowing, alright, what is an average percentage? What should the language look like? As I said before, all the things that you should be concerned about. If a manager brings you their influencer contract, it will be slanted towards the manager.
That’s just how it works. And so, influencers need to push back, and everything is up for negotiation. The good thing about negotiating for influencers is that the influencers have leverage. You could choose anybody and the manager. Although they can bring a lot to the table, they also stand to make a lot of money off the influencer. And so, influencers have some leverage in making changes to the contract.
Aim to Reach a Compromise When Signing a Contract
If a manager gives you an influencer contract and they give you a take it or leave it offer, you need to leave it and move on. There should be no take-it-or-leave-it offers when it comes to an influencer management contract. You need to make sure that you’re comfortable signing the agreement.
Usually, in a good negotiation, both parties feel aggrieved in some way. So, both parties had to give a little bit. But if you get to that point, that usually means it’s a good compromise and probably a decent agreement for both parties. So, yes, there absolutely needs to be a contract between influencers and their managers.
Why An Influencer Management Contract Attorney is Always Necessary | The Need for Lawyers in Influencer Contracts
The dream of becoming a social media influencer is increasingly common, with a reported 86% of young Americans saying that they want to try their hand at being an influencer. A full 12% say that they already consider themselves an influencer, and 20% say they know someone who is an influencer. With figures like this, it is hardly any wonder that there are lawyers on standby who can help people looking to become social media influencers.
The Pressing Need for Legal Review of Influencer Contracts
There is a pressing and immediate need for the legal review of influencer contracts because of the proliferation of contracts offered to aspiring influencers like yourself. To illustrate this point, take a look at some of the following figures related to the growth of this specific industry over the last few years:
- The total industry value of influencer marketing is set to grow to $16.4 billion by 2022
- 75% of brands say that they indeed put aside at least some money towards brand influencers
- Brands are increasingly paying their influencers in cash. There is about a 50/50 split between influencers who are paid with products and those paid with cash
- The total value of all eCommerce sales influenced by social media is estimated to hit around $958 billion this year (2022)
Influencers see the money they can make in this line of work and are ready to get started. They know that there is a high ceiling as far as what they can potentially earn, and they want to make those dreams a reality. Influencers are looking for their unique niche to develop to build an audience and attract the kind of business sponsorships that will help them earn the kind of living they really want.
Influencers and Attorneys Need to Carefully Review the Contract
Influencer agreements should be reviewed very carefully by the performers and the attorneys they hire to review those contracts. There are a number of elements to be on the lookout for, including:
- Form of Payment – How will you be paid for the content that you produce? Many influencers can command cash payments at this time, but some are still paid in free products (or some combination of the two). You want to get to the point where you can receive cash for your hard work, and the best way to do so is to make sure it is in your contract. It may take some time before you can get this kind of treatment, but you should keep working at it until you can secure those cash payments.
- Length of Contract – It is ideal to have an influencer management contract attorney ensure that the contract has a specific length of time attached to it. That is to say that everyone involved in the process should know how long the talent is expected to endorse the product via their social media page. They can break this down into a certain number of posts you need to create or various other timeline options.
- Topics to Cover in the Endorsement – Most brands create a script for their influencers to use when promoting the product. Obviously, the brand wants the influencer to come off as authentic in their endorsement of the product, so the script does not need to be adhered to precisely, but you, as the influencer, should try to hit on key points that the brand wants covering.
These are a few elements that one cannot overlook when creating a social media influencer agreement. A failure to add these specific elements into the contract could cause the contract to become null and void in some respects, and no one wants to see that.
It’s Best to Work With a Brand and Know How It Will End
All good things must come to an end at some point, and that includes the agreement you have with your sponsors. They will eventually need to move on to other things, and you will likely want to try working with other brands at some point. Thus, you need to have a firm commitment to what the end of your agreement with that brand will look like.
Agreements drawn up with a specific end date in mind are generally better overall. It allows everyone who signs the agreement to know the extent to which the brand and the influencer will perform the service. This is critical as it gets everyone on the same page.
Another reason to focus on this is to have a firm exit strategy. It would help if you had the flexibility to move on to another brand or company for endorsements as necessary in the future. Ending your deal with one brand and moving to another is the best way to contribute wholeheartedly to each project you get involved with.
Reviewing All Contract Documents With an Attorney
You don’t have to reinvent the wheel whenever you intend to sign an influencer contract with a brand. With the help of your influencer management contract attorney, you can easily review every contract that comes your way. Instead of starting entirely from scratch each time, you and your attorney can look for some of the most critical elements of each contract. And ensure that they contain the ones you are looking at now.
Ultimately, you will save a considerable amount of time by hiring an attorney who can review the most critical elements of any contract you are signing. The lawyer is trained in contracts for social media influencers, and you will always know that you are signing something that will hold up in court. Frankly, this is what many people are after when they start to look at the process of signing social media influencer contracts.
If you want peace of mind knowing you have an influencer contract that will serve your interests, please get in touch with us for more information about how to get started.
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 is a dispute, and examples of contract breach. Then obviously, the payment structure between the influencer and the agent.
Percentage Commission for Social Media 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.
Influencer Contract 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.
A Social Media Influencer 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 and content creators 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.