The Sunset Clause in Management Agreements

The sunset clause typically includes specific provisions for what happens after the contract ends.

For example, it may outline the process for the artist to terminate the contract prior to the end of the term, or specify the rights and obligations of both parties regarding any ongoing business or projects that are in progress at the time of termination.

Typically, the sunset clause will mention a gradual reduction in the management percentage often the percentage during the contracting period will be 20% and will be reduced to 10–15% the year after the contract has been terminated and 5–10% the second year. This comes into play when your current management contract ends and you’ve decided to go with new management.

If your old management is still entitled to 15% of the revenue from contracts entered into during their contract term, unless your new management deal has a “carve out”, or excludes any contracts negotiated before the term, you could be looking at only collecting 65% of the revenue from your work.

Overall, the sunset clause is an important provision in a music management contract as it helps clarify to both parties the duration of the agreement and the expectations for termination.