Sunset Clauses: How Manager Commission Should End

A manager works with an artist for three years. They sign a record deal in year two. The relationship ends in year four. That record keeps earning for a decade.

Does the manager get commission on it? For how long? At what rate? A sunset clause is the answer, and an agreement without one is an agreement that will eventually be argued about by lawyers.

Why the manager has a genuine claim

It's tempting for an artist to think commission should stop when the relationship does. But a manager frequently works for a year or more for very little, on the expectation of income from deals they're building toward. If everything stops at termination, the artist can leave the moment the work pays off and keep all of it.

That's not hypothetical — it's the specific abuse sunset clauses exist to prevent, in both directions.

The standard taper

Commission on income from deals signed during the term steps down over two to three years after it ends:

• Year 1 after term — full rate, or half. Both are common; full rate is more manager-favourable.

• Year 2 — half the rate.

• Year 3 — a quarter, or zero.

• Thereafter — zero.

So a manager on 20% might take 20%, then 10%, then 5%, then nothing. A developing-artist deal might taper faster: 10%, 5%, zero.

The essential feature is that it reaches zero. A sunset that settles at a permanent 5% forever is not a sunset.

What should and shouldn't be commissionable after the term

• Should be: income from records released or contracts signed during the term. That's the work the manager did.

• Should not be: new deals negotiated after termination, by the artist or a new manager. Obvious, frequently omitted.

• Contested: re-recordings, renewals and option exercises on term-era contracts. Say something about them, because otherwise someone will argue.

• Also contested: touring after the term. Live income is generated by work performed after the manager left. A common resolution is that live drops out of the sunset entirely, or tapers much faster.

The double-commission problem

The artist's real fear is paying two managers at once — the old one on sunset and the new one on current income. It's a legitimate concern and it can genuinely reach 30-35% in year one.

Two fixes. Cap total commission: the artist never pays more than a stated combined percentage, with the excess coming off the outgoing manager's share. Or exclude new income entirely from the sunset, so the old manager only ever commissions the specific deals they made.

Termination for cause should shorten it

If the manager is terminated for material breach, the sunset should shorten sharply or disappear. Most templates omit this, and it's the artist's main protection against a manager who stops working but keeps collecting.

Write it down while everyone's optimistic

Sunset clauses are negotiated at the start of a relationship, when nobody wants to discuss its ending — which is exactly why they're so often missing. The conversation takes fifteen minutes at the beginning and years at the end.

Musavise's agreements tool generates a management agreement with term, commission basis, carve-outs and the sunset taper as explicit fields in plain language, e-signed free and frozen at signature so both parties can reproduce exactly what they agreed to years later — which is precisely when this clause matters.

All of it lives in one free Musavise account — free means free, within honest limits, and your data exports whenever you want it. Create your free account; it takes about two minutes.