By the time someone achieves “celebrity status” they have an agent, a top agent, most likely. All aspects of that talent and agent relationship are carefully spelled out in a very detailed contract. Though these types of representation agreements vary (and of course the bigger the celeb the more negotiating power he or she has with the agent and vice versa) much of the information there are standard clauses which appear in every contract.
Also, the bigger celebrity, the bigger the entourage and I’m not referring to a posse with whom the celeb goes to the clubs, I am talking about a business entourage-personal managers, talent agents, talent attorneys, publicists, social media managers, etc. True there are a small handful of celebs who run their own business (i.e. Judge Judy. But she is such a smart, dialed in woman, she doesn’t need anyone!) but even they seek advice and counsel. Most celebrities, again this depends on personal choice and the degree of celebrity, may have one or two representatives who fulfill several roles. Regardless of how many there are on a celebrity’s payroll, contracts are the name of the game-this is where mutual rights and duties are spelled out. Hence, they are the key to any Hollywood relationship. Here are three of the most important clauses found find in celebrity agent contract:
- Term. This is the length of the contract between the celebrity and the agent. Most representation agreements last between one and five years. One year is not unusual for a first-time contract and is quite beneficial to both sides. If one or both don’t make money from the other, tif the personalities and work styles clash, will want to move on after the first year.
- Commission. This clause details the percentage of their income the celebrity will pay the agent. The commission rate is negotiable but it’s usually ten percent, but not higher. According to SAG-AFTRA (the actors union), “No franchised agent may charge a rate of commission higher than 10%.” Naturally if you are working with a non franchised agent or are not in SAG-AFTRA this rule will not apply. However, every celebrity is a member of SAG. It is only new actors or those who aren’t seeking to do the high budget union projects that are not members of SAG-AFTRA.
- Coverage. The celebrity may come to the agent-client relationship with projects that pre-dated the the agent and for which the agent had zero involvement but have not yet been produced. So that the agent does not receive commissions on those jobs, a coverage clause will delineate those jobs that are excluded. A coverage clause will also detail areas of employment that the agent will handle such as garnering work for the actor in commercials, television, film, theater, speaking engagements, or reality tv. For example, if the celebrity is a reality TV star but wants the agent to try to secure him/her film roles, the coverage clause may state that the agent is excluded from commissions on anything but film roles. Coverage clauses are sometimes called “carve-outs” because, as you can see, they carve out areas where the agent cannot earn commission.
In the ruthless world of Hollywood, written, iron-clad contracts are important for all parties. Even with contracts drafted and reviewed again and again by high-dollar celebrity lawyers, lawsuits still get filed, by both talent and agents.