Our seventh minisode of season seven and the soxthpart of our special series about Influencer Management Agreements is available today. In this minisode, Jon continues our review of influencer management agreements with a look at the termination of influencer management agreements and the compensation owed to managers after the management agreement is ended.
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A transcript of the episode follows:
This is the seventh minisode of the seventh season of The Creative Influencer podcast. Today we’re going to talk about the termination of influencer management agreements.
Generally speaking, in most Management Agreements, termination by the Influencer can only be “for cause.” What does this mean?
When we say "for cause," we're talking about a legal reason that's good enough for ending the contract. In the world of influencer management agreements, "for cause" could mean things like the agency not delivering the promised brand deals or perhaps taking more commission than what was agreed upon. It's like the rules of a fair game—if one side cheats or fails to deliver, then the contract can be terminated.
This highlights the importance of hashing out these details in the agreement, so that the contract spells out expectations and you and your manager are on the same page.
It also highlights the importance of documenting events (such as the lack of cooperation) that may give rise to grounds for termination of the relationship.
So, let’s say one of the parties -- ‘parties’ being legal speak for one of the individuals involved in the agreement, either the Influencer or the Manager – so, if one of the parties does breach the agreement in such a significant way that you decide to terminate the management agreement, then the next consideration is how to fairly compensate the Manager.
Compensation after termination is subject to negotiation. There is no set industry standard, but typically, if the manager is terminated while a brand deal is already in process, the manager will receive the rest of their percentage cut.
And sometimes, if a brand deal is being negotiated when the manager is terminated, the manager will still receive their cut.
Why?
Well, think of it this way: the manager has worked to help the influencer with her brand deals and if the management agreement is terminated while they are doing their work then they are owed payment for their work.
But again, as I said earlier, how this works is all subject to negotiation and a case-by-case basis depending on the experience and connections of the parties. If the influencer already has a lot of connections before they hire a manager, and they work on a project from one of those previous connections, then potentially the influencer may negotiate a lower rate for paying the manager upon termination.
On the other hand, if the manager is the one bringing the most experience to the negotiating table, and has strong industry connections, then they may be able to negotiate a higher percentage, even if they are terminated.
This makes logical sense: the work that an influencer does and the compensation they receive may or may not be directly tied to the manager’s efforts and work before the management agreement was terminated
Next, we’ll look at confidentiality, non-disparagement and indemnification.
Finally, we’ll discuss conflict resolution. In other words, how are disputes between a manager and influencer resolved?
The Creative Influencer is a weekly podcast where we discuss all things creative with an emphasis on Influencers. It is hosted by Jon Pfeiffer, an entertainment attorney in Santa Monica, California. Jon interviews influencers, creatives and the professionals who work with them.
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