QUESTION
Is a finders fee of 25% percent of artist recording contract an average amount?
Asked on Jan 26th, 2012 on Entertainment Law - New York
More details to this question:
In an artist management agreement, is a finders fee of 25% percent of artist recording contract an average amount?
2 ANSWERS
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The typical finder's fee, in my experience, is in the range of 10 to 15%. That being said, I could imagine special circumstances in which 25% would be reasonable and appropriate, but generally 25% is on the high side. Often the finder's fee is a percentage of only the cash advances for the first one or two records. Bear in mind that it is EXTREMELY important that the finder's fee agreement is clear and precise and is prepared by an attorney who knows what he or she is are doing. Just for example,will the finder's fee include a percentage of mechanical royalties for original songs paid by the label? If the agreement is NOT precise and there ends up being a substantial amount of money involved, there is a very high likelihood of an expensive legal dispute at some point.
Answered on Jan 31st, 2012 at 1:03 PM
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While there is no "set fee" for this type of arrangement, it all depends on what the person did to bring about the deal between the parties, the value of the deal, and how much revenue its likely to produce. 25% is high, though for a "finder's fee." That usually is in the area of 10% and normally only of the initial cash not for all time. Management fees are typically between 15-20%.
Answered on Jan 31st, 2012 at 12:03 PM