The Basics Tenets of Talent Management
Talent Management or PR agencies are frequently contacted by content creators, celebrities, and artists who have made a name or are starting to make a name for themselves in the industry. These individuals (Talent) want to work more closely with brands, publishers, broadcasters and other businesses for commercial deals.
These agencies specialise in managing the negotiations and booking process and/or obtaining business opportunities that can significantly advance their clients' careers. The make-up of the relationship is governed by the needs of the talent and what the agency can provide.
Talent Management is not as simplistic as just booking work and receiving a commission, rather it is a strategic role requiring a strong focus on a comprehensive and sustainable brand strategy, effective stakeholder engagement, adept networking and strategic deal-making. It must guide, sharpen and work in unison with the Talent’s vision for their career. Consequently, people in this role may not always be the most popular among stakeholders, as they must make difficult decisions to further their clients' careers These decisions are often more challenging due to the close personal relationships they develop through their role as a trusted advisor. Moreover, when seeking Management the Talent must have an idea of what they want for themselves to avoid misalignment and what may become a schizophrenic brand that has no clear positioning and pillars for activation. Importantly, the essentials of contracts, transparency and financial literacy are crucial for successful Management relationships.
At Manaka Publicity, we deal with many Talent-led projects on behalf of brand clients and negotiate contracts for adverts, films, social media campaigns, usage and licensing rights and ambassadorships for Our Talent and our existing network of talent. One of the challenges we encounter most amongst our diverse client base is the understanding of the Talent manager’s role, finances, and exclusivity as well as the application of usage rights for talent & licensed elements which are misunderstood, inefficient or non-existent. In this issue, we will discuss three Talent Management essentials:
Is there a difference between a Manager and an Agent?
In the South African context, we use Manager and Agent interchangeably, while it is not incorrect, it bears on the parties concerned to honestly define their roles and capabilities in supporting the Talent. Internationally, however, these roles are often separate functional areas. The Manager’s role is that of a trusted strategic advisor and a day-to-day resource who ensures career and brand management. The Agent's primary focus is that of a sales agent who secures commercial bookings for the Talent. The Agent’s mandate is directed by a strategy built by the Manager and approved by the Talent. The Agent and Manager can be one person or form part of one team that ensures the Talent’s professional needs are met, sometimes even extending to personal assistance.
Understanding the business of getting a manager and managing talent
At a basic level, commercial relationships are governed by contracts, stipulating roles, responsibilities, measurable targets, remuneration structures and a dollop of trust which can grow or decline over time. For this purpose, it is a standard requirement to draw up a Management contract to direct the relationship and provide mechanisms for dispute resolution. This contract can be a fixed-term engagement characterised by a year-long arrangement or more or a short-term engagement not longer than 3 -6 months or on an ad hoc basis.
In the case of fixed-term agreements, the Manager/Agent and Talent can agree that the Agent will represent the Talent exclusively for the duration of the contract where they will provide full-service support or work with a team of Agents for the Talent’s benefit, over a set period and under a defined scope of service that complements the other managing agents. These parties collaborate on scope and specialisation for the strategic management of this brand. An example of this is where Talent has a Publicist, Manager, Business Manager, Booking Agent and Accountant – all or some operating separate businesses but working together to support Talent.
Firstly, It is not uncommon to encounter contracts containing exclusivity clauses whether from a brand or prospective Management agency. This typically arises from standard agency templates managed by account executives, which may not be tailored to the specific nuances of the relationship – a mere oversight. However, there can also be a lack of clarity regarding the legal intricacies of such engagements as a brand would rely on its agency partners to manage these affairs and Talent would rely on management to identify and prevent them.
Whatever the case, exclusive management contracts can impose significant limitations. While this may be beneficial to one party it often restricts collaboration with other specialists to the Talent’s benefit. For example, we advised an accomplished sports star who was dissatisfied with their current management and was exploring the option of engaging Manaka Publicity to join as a preferred member of their management team. In our engagement, it became apparent that the relationship with their existing management team was built on restrictive clauses, not in the Talent's express interest thereby prohibiting team structure adjustments like employing a “team of Agents” unless otherwise commissioned by them. This also imposed onerous conditions for early contract termination. In our guidance to Talent, we emphasised the need to carefully navigate the existing terms to maintain an amicable relationship and to preserve income while avoiding what may have become a costly legal dispute by riding out the existing contract. We see in this case, as with many others that Talent often sign agreements without fully grasping the implications of what they are signing, and what this may mean for their career. In this situation, the contract was such that, Talent could not terminate the contract with the Manager without losing their endorsements as they would be restricted from working with partners whose deals were sourced and negotiated by the Manager. This is because Talent signed an exclusive management contract.
For Management services rendered, an agency or Manager/Agent charges and will receive a fee. Fees and commissions differ in range from agency to agency but should typically not exceed 20% of total campaign income, inclusive of all necessary taxes due to them. There are models where representation is provided on an ongoing day-to-day basis where the agency or Manager/Agent will charge a retainer fee for administration and other related support services including planning, organising and partnerships and will also receive commission for successful closures on commercial deals. There are other instances where Management is less formal because the Manager is a close friend or family member. In such cases, the same applies because, at the heart of it, both Management and Talent are a business. We see in our Talents case that from the Manager’s vantage point, the Talents’ decision to terminate would have had an impact on their bottom line both due to the loss of Management fees and commissions. While understandable, Managers/Agents also have the responsibility to apply the reasonable man principle in their dealings and not keep Talent locked in contracts that impede them from growth or impose oppressive restrictions harmful to their livelihood.
Actively maintaining vigilance and clarity in contractual matters is essential to prevent inadvertently signing restrictive agreements that could stifle career growth or financial stability. Even when exclusivity is not a factor, we encourage Talent and their Management to inquire and discuss a cooling-off period that outlines the parameters in place before they can work with competitor brands brought by their Managers/Agents, other agents on the team or when they can move from one Manager/Agent to another if it is unclear. This proactive approach empowers Talent to protect their professional interests across stakeholders and maximise opportunities in a competitive industry.
To this end, depending on the structure of the Management relationship and the formalities that have been observed. Two scenarios exist;
1. Talent and their Management are in a mutually beneficial relationship where no employment exists, which simply means no typical benefits like medical aid, income tax, unemployment insurance or retirement plans exist. The parties are independent contractors in that the Manager pays Talent what is due to them after agreed-upon deductions into their personal or registered business account. This type of relationship allows for flexibility in the defined terms of the relationship and how/who they can take work from – with or without the other parties’ permission. Which, if discussed at the beginning may have been beneficial to the aforementioned case.
2. Talent hires a Manager/Agent and pays them a monthly salary including benefits and where commission may form part of the deal. This happens in the case where more established artists are concerned and offers less flexibility for the Manager to work with others. This classifies an employer-employee relationship. This person is therefore an exclusive and dedicated resource to the hiring Talent and unless otherwise agreed or declared cannot represent other Talent.
In addition to this, distinguishing early on the nature and type of the relationship goes a long way to helping parties understand their financial and compliance responsibilities. Often, Talent falls into stardom and for better or worse do not know how to navigate the newfound popularity and rely heavily on Managers/Agents to handle all their affairs. In instances where Talent is young, inexperienced and/or may otherwise have limited financial literacy, it is incumbent on the Manager/Agent, as a trusted advisor to do the necessary work of helping to educate the Talent and themselves on this and in the same breath for Talent to move beyond the allure of fame and take an active role in their business by focusing on understanding contractual and financial compliance to avoid issues with SARS, liquidity and long term stability.
Financial lessons from high-profile disputes for Talent and Managers
We have seen too many times where the accounting aspect of Talent affairs causes a breakdown in the Manager-Talent relationship and Talent’s liquidity. Several cases come to mind including that of global pop star, Rihanna who sued her accounting firm for mismanagement of funds, most recently local sensation, Makhadzi’s woes with SARS and her Manager including those of artists who started their careers as superstars but eventually fade from the limelight to find themselves lacking financial resources to sustain their careers and lives in later years.
It is not advisable for Talent to delegate the function of their personal tax compliance to their Managers/Agents and for the latter not to assume that responsibility. We see in these examples that the stars gave unrestricted Management access of their affairs to their representatives. We noted earlier, that trust is crucial to a relationship but it should not be blanket and Talent must actively participate in the running of their business. For all manner of reasons we have unfortunately seen that trust can be misplaced – whether by bad advice or poor understanding that leads to costly mistakes.
Our advice to Talent and Managers in their oversight role is to know that:
Personal income tax rates vary on a sliding scale from 18% to 45%, depending on the earnings within the tax year
Influencer campaign work is not tax-free
Keep and request records for all income and expenses
Not to hand over your financial records to someone and expect that they will ensure your compliance. Rather, assume an active role because only one person will owe SARS.
With the benefit of transparency and a clear understanding of capability, our Talent understands that our role limits itself to Management and Publicity. Whereas we can present brand clients with proactive collaborations for work with Talent, negotiate contracts, facilitate media outreach and ensure risk Management, at Manaka Publicity we are not booking agents. This classification has been a major point of contention for many Managers/Agents and resulted in the dissolution of many Manager-talent relationships. Our business is structured in a way that allows us to work with several Management teams and Talent, who have brought us on board purely to manage their PR, and contract negotiations. Or in a structure that promotes open mandates where our commission is earned on work sourced and closed by us.
Conclusion:
As you can deduce, Management is not rudimentary, and it is incumbent on the parties involved to not enter into contracts hurriedly or base their decision to employ Management or an Agent on short-term unsustainable goals. Beyond trends, popularity and fads, the role of an astute manager is to be adaptive, and honest, to plan and see beyond the lights and fame associated with the Talents star. They must guard the Northstar jealously, as it can get lost in trends, to enable a brand that stands the test of time.
Selecting the appropriate Talent or PR Management agency is a crucial choice in any Talent's path. It requires careful investigation into elements like the agency's talent pool at the moment and the experience of the agency managers who will find and/or close deals on their behalf. Similarly, Management agents are encouraged to do the same and be clear regarding their capabilities and limitations. However, as you can imagine, these are non-exhaustive scenarios of Management contracts that we consult on.
These fundamental considerations in Management contracts also directly correlate to usage rights which have become a pesky issue in the age of content production and social media platforms.
In our next issue, we unpack the types of usages, how they are applied with practical real-life examples and their legalities around them.
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For expert guidance in talent management, including essential management strategies, contract reviews, and other talent-related matters, we are here to help. Our team offers comprehensive consultation services tailored to the unique needs of high-profile clients. Contact us at pressoffice@manakapublicity.com to schedule a consultation and discover how our expertise can elevate your talent's career.
Disclaimer: The information contained in this article was intended for our clients and correct to the best of the author’s knowledge at the time of publication. It does not constitute legal or financial advice that is appropriate to individual needs and circumstances.