What is the Purpose of an Influencer Management Contract?
What is the purpose of an influencer management contract? The purpose of any contract is so that 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 is going to be between the influencer and the manager. It’s important that all the terms of the relationship are laid out in that influencer management contract. The most important terms in any contract the same with an influencer management contract are the term, meaning, how long does the contract last.
For the most part, most influencer management contracts start at least somewhere between three to five years. That doesn’t mean if the influencer is unhappy with the manager, that they cannot leave for the following reason. There will also be a section called termination. And then in that section, it will go over the ways that the contract can be terminated. Almost every contract will have what’s called without cause termination. Meaning, 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 management contract with an agency or a manager, you absolutely want to have without cause termination in the agreement. It would be very unlikely 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 have no ability to terminate it if they’re not in breach of contract.
And essentially, you’re stuck with so many you don’t want to be with for years. So, absolutely have to make certain without cause termination is in the agreement. Obviously, there will also be a section about compensation, so how much is the manager or agency going to get paid by the influencer? For the most part, it’s based upon a percentage of the commission, meaning, whatever the sponsorship deal is with the influencer, the agent/manager is going to get a percentage of that. 20% is the industry standard. Certainly, could be less or more but around 20% of whatever you make as an influencer is going to likely go to your agency or manager. Now, certainly, that can be negotiated. But that’s a standard amount. Other topics of interest include:
- How Long are Most Influencer Management Contracts?
- What Should an Influencer Management Contract include?
What also needs to be in there is what happens after the contract ends. Every manager agency is going to put a clause into an influencer management agreement that states even if the relationship terminates, they are still going to receive a percentage of any of the deals they brought to the influencer for a set period. Usually, that’s one year. Let’s say your management company brought you a deal with the skincare line and then the influencer terminates the contract with the manager, but the skincare company wants to continue the relationship with the influencer. Well, the influencer is still going to 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, certainly, an influencer can negotiate parts of this. Maybe shortening the amount of time, they have to pay any commission to their old agent or perhaps narrowing the percentage of commission over time. Meaning, 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 the influencer 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 some just one-off, what the percentage of that’s going to be for the agent?
I mean, there are just a ton of things that must be thought about in advance. The worst thing that can happen for an 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 or another influencer or another agent brings a deal to an influencer, if they’re in an exclusive management contract, they have to then take that deal back to their manager.
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 is still going to get 20% of whatever deal that is. Is that fair or not? Well, that’s just part of having a manager. So, that’s the purpose of a management contract. Just lays out all of the responsibilities for both parties.
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