Do Influencer Managers Have Contracts?: Need for Safe and Fair Influencer Management Agreements
Do influencer managers have contracts? In short, they better have. If you are an influencer and you have decided that you’ve reached a level where you think some professional representation would help you move forward, then you’re going to look for an agency, a manager, a management company, an agent, it’s all the same in the influencer realm. Outside in some other industries like with actors, there are some legal definitions and laws in place, especially in California, that dictate the different roles that a manager and an agent 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 Management 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. If you have reached a point where maybe you did find a social media influencer manager or an agency that you’re interested in associating with, there’s going to be, or at least they’re going to require an exclusive management contract between them and you. And in that contract, it’s going to dictate all the terms of the relationship between you and the manager. So, the length of the agreement, how to terminate the agreement, the commission percentage or flat fee paid to your manager, and what happens after the agreement is terminated. There are some things that you’re going to have to continue to pay the manager most likely after the agreement ends and there’s language in there about that.
What happens if there’s a dispute? Where is that dispute heard? It’s called the venue. The responsibilities of the manager, the responsibilities of the influencer. I mean, the entire point of a contract is so that if there are some disputes, it should be spelled out in the contract as far as, is somebody in breach of contract? Is someone not doing what they said they would? In that scenario, a contract really helps avoid and resolve disputes without having to go 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 because for a couple of reasons. In almost any management contract, there’s going to be some language that states after the contract is terminated, the manager will still receive a percentage of any deals that they brought to the influencer for a period, usually, a year. Other topics of interest include:
Also, it’s going to 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 didn’t bring them to the influencer originally. And then also, how did the relationship end? Do you have to give some notice, which is normal in a contract? What happens if one party is in a breach of contract? Does the contract automatically renew after the initial term? All of this stuff has to be figured out in advance. Just going into a relationship without a contract is just a recipe for disaster.
Content and Brand Language in an Influencer Agreement
Now, if you are an influencer and you’ve been given a management contract, it needs to be reviewed by an attorney. It’s just reality. I know some people are like, ah, I don’t want to throw down the money. When I review a ton of employment contracts for healthcare providers, and physicians mostly, we can either save or gain like literally 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 by somebody. That person can assist you in knowing, alright, well, what is a normal percentage? What should the language look like? As I said before, all the things that you should be concerned about. If a manager is bringing you their contract, it’s going to be slanted towards the manager.
That’s just how it works. And so, the influencer needs to push back, and everything is up for negotiation. And the good thing and negotiating for an influencer is the influencer has the leverage. You could choose anybody and the manager, although they can bring a lot to the table, they stand to make a lot of money off the influencer as well. And so, the influencer has some leverage in making changes to the contract. If you’re given a contract by a manager 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. Now, 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 the influencer and their manager.
Influencer Management Costs
How much does an influencer manager charge? What is the commission percentage that a manager will take from any of the compensation received by an influencer? First, let’s talk about the distinction between an agent and a manager. An agent normally is thought of in the actor realm, and there are specific laws that dictate how much an agent can charge an actor and they have to be a member of a licensed agency. And there are some specific rules that dictate what they can and can’t do. The influencer market is, at this point, pretty much unregulated. I find that actors have dual roles of an agent and a manager who do separate things for them.
Whereas I find most influencers think of an agent and manager as the same thing. And that would be somebody who facilitates business opportunities for the influencer and then assists in negotiating the price and dealing with the contract. most influencers think of that in the same capacity simply because there’s no need to have both as an influencer. I mean, I guess one of the biggest influencers could have a manager who generally handles the day-to-day issues for talent. Whereas the agent generally handles the nuts-and-bolts business stuff. But for most influencers, that’s unnecessary. One person can do the job, and so it can be known as both an agent and a manager. As far as a percentage goes, as I said before, agents for actors in California are capped at 10%, whereas the influencer market is essentially unregulated at this point.
I find most management agencies or managers charge around 20% commission. Can be less, can be a little bit more, but somewhere between 10 to 20% is a standard amount. Now, that certainly is negotiable. It really is probably based upon the experience of the manager, the client base they have, and the proven track record. If you have a manager who doesn’t have much experience, you simply shouldn’t pay them as much, at least initially until they prove themselves. How the compensation would work is the influencer is designated as an independent contractor, and then the sponsor will pay, usually, the payment will go through the agency or manager, the manager will take their cut, and then the rest of that will go into whatever designated bank account that the influencers wanted the money to go into.
And then one consideration is after the contract terminates, there’s almost always going to be a clause in there that states the manager will continue to receive a percentage of any deal that they brought to the influencer, even after the contract terminates. Let’s just give an example. Let’s say it’s a fitness influencer. They have a sponsorship with an apparel company, the manager negotiated the deal, got 20% from whatever it was, and the influencer, for whatever reason, terminated the contract with the manager. Well, that clause will then state, for normally a year after the contract ends, the influencer still has to pay 20% if they decide to stay with the apparel company back to the manager. The reason why managers do this is that what they don’t want to do is get a deal, and bring it to the influencer, maybe it’s an awesome opportunity, the influencer terminates the agreement, still takes the deal, and then avoids having to pay the manager any commission.
Now, everything’s negotiable. You can certainly try to negotiate reducing the amount of time you have to pay the manager after the contract terminates, or maybe reducing the percentage maybe by a quarter. So, if you go 20% in Q1, 15, 10, 5, something like that. But it’s very rare that you’re going to get a management contract that doesn’t have some language like that. I mean honestly, it’s obviously a reasonable request by a manager. It would be unfair if they would bring a deal to someone and then have that person avoid having to pay them anything. Another thing to think about is if the manager has an exclusive relationship with the talent. Normally, any management contract is going to be exclusive, which means the influencer cannot use anyone else to facilitate/negotiate any of the sponsorship opportunities. Meaning, even if a friend or another influencer, if they were reached out to directly by a sponsor, anything that comes to the influencer must go back to the manager, and then the manager would be the one who negotiates the deal and would get the percentage.
Once again, a manager doesn’t want an influencer from getting around having to pay them by having stuff funneled through either a friend or contacting the places directly. I mean, the role of the manager is to, one, find opportunities that the influencer couldn’t do for themselves, and then two, negotiate the price. And hopefully, they’re going to bring in 20% more than they’re taking, so in the long run, it’s a win-win for both parties. So, that’s how much most influencer managers make.
How to Find Influencer Management
I find for social media influencers, they look at agents and managers as the same thing, so the term could be used interchangeably. When you do want to go out and find an agent or manager, there are a couple of places, at least initially, where you can find them. If it’s an actual agent, it would be through a talent agency. There are some individual agents out there, or maybe they just identify as an agent where they’re not part of an agency because they’re not required to, or they also could be a manager. Most of them are maybe in a smaller agency or management company, but they’re not necessarily known as an agency. So, when you are looking for a manager, you need to think about, alright, what type of person do I want in this role?
Well, one, you want someone with at least some experience in the industry. The entire benefit of having an experienced manager is they’re going to have relationships with brands, they’re going to know what the industry-standard rate for a YouTube spot, Instagram post, some sponsored TikTok video, something like that. Whereas if you have someone who has never done it before, for instance, I frequently have influencers say, well, my friend thinks they can handle it. Okay, but there needs to be some level of expertise to really jumpstart the influencer’s career. And that can only be done through someone who has experience in the industry. I’m not saying it’s impossible for someone with no experience to do a good job, but probably unlikely for a couple of reasons.
One, the manager will also have contacts with attorneys or whoever, that can assist in contract negotiation and review. The managers, as I said before, will also know where to direct the influencer as far as, alright, you don’t want to work with this brand, or you do want to work with another brand. The best place to look for a manager that can really help your career is first with your fellow influencer friends. I mean, most influencers have influencer friends. And so, if you have friends or other influencers that you know that have management, ask them, who have you used in the past? Who do you use now? Are you happy with them? Have there been any problems now? Once someone gets big enough, they will have people reach out to them as well.
And if you’re going to discuss potential management opportunities, then you need to ask some very specific questions. Who else have you worked with? Did you have contracts with them? What is your commission percentage? Do I have to pay you after the contract ends? What brands have you worked with? These are all things that someone should be able to answer if they’re going to be an asset to the influencer and not someone who’s just trying to figure it out. Also, many influencers are, I don’t know if “concerned” is the right word but are reluctant to pay. Usually, 20% is the going rate for a manager in the influencer industry. They don’t want to pay 20% of their compensation to a manager. But if you have a good manager, that person should bring vastly more than the 20% you’re paying them, as I said before, with knowledge of the brands and the pricing and that type of thing.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!
