Influencer Management Contract (Do You Pay Them HUGE Money?)
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, it’s somebody who’s going to go out and try to find your sponsorships so that you can get paid for your cloud. Now, you will absolutely want/need to sign a social media influencer management contract that will outline the responsibilities between the parties. For example, you want to know how long does the contract last, what’s the terms of the agreement, and how can the contract be terminated. So, do you have to give notice? Is it a fixed term?
Social Media Influencer Contract Terms
Does it renew automatically at the end of the initial term? How to terminate the 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 agreements 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 campaign 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 Influencer Contract Ends
Also, what are the obligations once the contract ends? As I stated before, you’ll pay the agent/manager a percentage of whatever the commission is for the campaign deals they bring you. Almost every agreement will have language that states after the 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 Must Pay Agents After Agreements Terminate
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 campaign deals that continue for whatever that kind of restricted period is. There’ll also be language in the contract that states what happens if there is a dispute. You have an arbitration clause. 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.
Other Blogs of Interest
- Can an Influencer Break Their Management Contract?
- How Long are Most Influencer Management Contracts?
Influencer Management Contracts: Should You Sign What Your Manager Brings You?
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 90s pop band “The Backstreet Boys” members and how their manager Lou Pearlman took them for a ride. 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 he had done all he had to scam the boys (and many others he represented).
The Pearlman case is an extreme example of injustice by a manager. Still, it is also a cautionary tale for anyone who thinks that their talent agents and others they give responsibility over some portion of their money-making abilities always do entirely ethical things. This is one of the reasons why it is important for an influencer management contract attorney to always go over all of the documents 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 need to have rules and stipulations to them, and there are certain things that all talented influencers should expect in any contract they take on. That is to say that not everything 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 the manager’s responsibilities and what they need to do for their agent to remain employed by that influencer. The manager must have everything spelled out for them in precise detail to ensure 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 to make their services worthwhile. 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 influencers and their managers may work out the compensation. 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, a manager may seek to earn some share of the future profits that the influencer generates during their work. Influencers should be somewhat wary of this as they don’t want to give away too much of the equity they have in their own future earnings.
These are all typical terms in influencer management agreements that one might expect to see. One should pay close attention to the last point about compensation structure because this is where some managers will try to slip in clauses that entitle them to more than they are honestly worth.
Is it Necessary to Have a Lawyer Look it Over?
You are not legally obligated to have an attorney look over your influencer management contracts. Still, it would help if you considered doing so to avoid any outcome you don’t want to see. It takes a short time and a small amount of money to get an attorney to look over what you need within the contract you are working on.
When you do hire an attorney like this, you can ask them to kindly review the contract that you have received from a manager line by line. The benefit you get from this is having an attorney sign off everything that looks legitimate to them. Instead of spending excessive time worrying about what may or may not be contained within a contract 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 believe, and it takes a lot of work and concentration to pull off. This is impossible 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 an agreement with a manager you might want to hire, we can help with legal matters. 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 you find yourself in
- Formatting recommendations to ensure that all elements are included in a standardized way that you can use again
If you need a manager, you need to ensure quickly reviewing any potential contract. Therefore, we highly recommend you contact us to start the legal 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.
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. A 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 contract will also include what happens after the agreement 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 campaign 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 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 agreement. 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 the influencer is absolutely going to want to bar their past agent from getting into their current numbers. You can always negotiate any term in an agreement. There’s nothing that’s ironclad, especially for an agency contract. The influencer has 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 agreement.
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 a campaign 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 influencer marketing campaign 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 that agreement, takes the campaign 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.
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 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 parties 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 company for advertising endorsements as necessary in the future. Ending your campaign deal with one brand and moving to another is the best way to contribute wholeheartedly to each project you get involved with.
Review All Contract Documents With an Attorney
You don’t have to reinvent the wheel whenever you intend to sign a contract with a brand. With the help of your influencer marketing 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 a social media influencer campaign, 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.
Do Influencer Managers Have Contracts? | Need for Safe and Fair Influencer Management Agreements
Do influencer campaign managers have contracts? In short, they better have. Suppose you are an influencer or content creator 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/content creator 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 campaign arena, at least as far as the date of this blog, it’s a gray area.
Social Media 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, influencer, or social media content creator. The entire point of an influencer 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, an influencer 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 content creator should go into that for a couple of reasons. In almost any management contract, there will be some language stating that after the influencer contract terminates, the manager will still receive a percentage of any campaign deals they brought to the social media content creator 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 content creator. Maybe if a friend, another content creator, 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 influencer contract that states the manager has to be given all of those campaign deals, no matter what. And they’ll still get a percentage of those deals, even if they initially didn’t bring them to the content creator. 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? Social Media ontent creators have to figure out all this stuff in advance. Going into a relationship without an influencer contract is a recipe for disaster.
Content and Brand Language in Influencer Contracts
Now, if you are a content creator 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 contract, it will be slanted towards the manager.
That’s just how it works. And so, content creators need to push back, and everything is up for negotiation. The good thing about negotiating for content creators is that they 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 content creator. And so, content creators 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 a content creator 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 content creators and their managers.
Are Social Media Influencers Independent Contractors? | Influencers Media
Are social media influencers independent contractors? Previous jobs that an influencer has had are very likely employee W2 opportunities. Let’s just say you’re working in retail. You are an employee, meaning the employer has complete control over you. They tell you where to work, when, how much you work, and your duties. And then, you’ll receive a W2 at the end of the year, with tax withheld in your paychecks throughout the year. In that scenario, you’re an employee. Now, as an influencer, your job is different. You aren’t working full-time for any of these companies you sponsor. I guess you’re doing a short-term burst of marketing, depending upon the relationship.
And for the most part, it’s up to you, maybe the exact content you post. I mean, there’ll be some bare bones. We want you to post this many times a month. We want you to do 90-second spots on your YouTube videos once every two months, whatever it is. But you’re not going into a nine-to-five job every day. And when the sponsor does not exert complete control over the influencer, that’s more of an independent contractor relationship. And so, at the end of the year, the independent contractor receives 1099, and any compensation paid to the influencer has no taxes withheld. At the end of the year, the influencer is going to be the one that must pay the tax on all of the compensation that they’ve received.
Advantages of Independent Contractors
Is there an advantage to being an independent contractor versus an employee? Well, suppose you’re an intelligent independent contractor. In that case, you’re going to create an LLC, and then you’re going to get a tax ID number, an EIN through the IRS, and then you’re going to create a bank account for that LLC. And then you’re going to run all compensation and expenses through that account. As an influencer, you can take many income tax deductions as an independent contractor. Many things that go into being an influencer can be deducted. Like travel, maybe you’re in the fitness industry. You’re trying out new products, well, you can likely deduct the products that you bought as well, meals, gas, cars sometimes. You can deduct a ton of things when you are considering your own business as an independent contractor and self-employed.
I’m not an accountant or tax attorney, so I’m certainly not a complete expert on this, but I suggest you reach out to an accountant. They can assist you in setting up the LLC and then let you know exactly what you can and cannot deduct. And that way, you can maximize your compensation and tax deductions at the end of the year. If you’re not doing that, you’re leaving a lot of money on the table. Now, there may be scenarios where you’re working so much for one sponsor or doing so much work for them for a week, a month, a year, or whatever that you may be classified as an employee.
Talk with the Sponsor
A scenario like that would rarely exist. However, there may be times when there’s so much activity between an influencer and a sponsor that they might be considered an employee. Suppose you’re concerned that you’re being misclassified as an employer or independent contractor. In that case, I suggest you speak to the sponsor and let them know your concerns and talk through that. So, that’s a little bit about whether a social media influencer is an independent contractor. They very likely are, and you will receive 1099 at the end of the year.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!