As talent management agencies continue to grow and expand their service offerings, the contractual arrangements that underpin those relationships have become increasingly important.
Many agencies focus on securing opportunities for talent and building relationships with brands, but contractual frameworks are often left to evolve organically over time. Whilst this may work initially, weaknesses in agency documentation can expose agencies to legal, commercial and reputational risk.
Below are some of the most common issues we encounter when advising talent management agencies.
Unclear Scope of Services and Scope Creep
One of the most common challenges for agencies is the gradual expansion of services beyond those originally contemplated by the parties.
A talent manager may begin by negotiating commercial opportunities and managing day-to-day relationships, only to find themselves becoming involved in business strategy, content review, negotiations with third parties, event management or wider brand development work.
Without a clear definition of the services being provided, it can become difficult to establish what falls within the agreed commission structure and what constitutes additional work.
Agencies should ensure that their agreements clearly define:
- the services they will provide;
- any excluded services;
- circumstances in which additional fees may be payable; and
- processes for agreeing changes to scope.
This becomes particularly important as creators increasingly operate as sophisticated businesses rather than individuals.
Exclusivity Provisions That Lack Certainty
Many agencies expect their relationship with talent to be exclusive. However, exclusivity provisions are often drafted in broad or ambiguous terms.
Questions that frequently arise include:
- Is the agency exclusive in relation to all opportunities or only particular categories of work?
- Does exclusivity apply internationally or only within specific territories?
- Can the talent continue to undertake existing relationships?
- What happens if opportunities arise through personal contacts or family members?
Exclusivity may also be undermined if it applies only to the individual talent. For example, the talent might enter into an opportunity through a newly formed company, or a director, family member or other connected person might establish a separate entity through which the work is contracted. Agreements should therefore consider whether appropriately defined companies, representatives and other related parties need to be covered, together with clear anti-circumvention wording, so that the commercial effect of the exclusivity cannot be avoided by changing the contracting party.
A lack of clarity can lead to disputes regarding commission entitlement and whether an opportunity falls within the agency’s remit.
Agreements should clearly define the scope of any exclusivity arrangements and the consequences of breach.
Commission Structures and Commercial Deal Disputes
Commission disputes are one of the most common sources of disagreement between agencies and talent.
The issue often stems from uncertainty regarding what constitutes a commissionable deal.
For example:
- Does commission apply to deals introduced by the agency?
- Does it apply to all commercial opportunities secured during the relationship?
- Are affiliate arrangements included?
- What about licensing deals, appearances, speaking engagements, merchandise, subscriptions or product collaborations?
The position can become even more complicated where opportunities continue after the talent management relationship has ended.
Clear drafting around commission entitlement, payment mechanics and post-termination commissions can significantly reduce the potential for disputes.
Lack of Appropriate Payment Protections
Agencies frequently operate within complex payment chains involving brands, intermediaries and talent.
Where payment provisions are not carefully drafted, agencies can find themselves exposed to financial risk.
Consideration should be given to:
- whether commission is payable when invoices are raised or only when funds are received;
- what happens where a brand fails to pay;
- cancellation and postponement scenarios;
- claw back provisions; and
- the treatment of partially completed campaigns.
The appropriate approach will depend on the commercial model adopted by the agency, but the position should be clearly documented.
Authority to Act on Behalf of Talent
Many agencies negotiate opportunities, approve documentation and communicate directly with brands on behalf of talent.
However, it is not always clear whether the agency has authority to legally bind the talent to a contract.
If authority is unclear, the talent may dispute that it is bound and the agency may be exposed for acting beyond its authority.
Agreements should distinguish between authority to negotiate and authority to enter into binding contracts, with clear limits and approval processes.
Intellectual Property and Content Usage Rights
Intellectual property and content usage rights are among the most important issues in creator agreements. Getting them wrong can be catastrophic, leaving talent tied into extensive, long term or poorly defined usage rights that materially restrict the value and control of their content.
Brands increasingly seek extensive rights to use creator content, whilst creators are becoming more aware of the value of those rights.
Agencies should ensure they understand:
- who owns the content created during a campaign;
- what rights are being granted to brands;
- how long those rights last;
- whether paid advertising rights are included; and
- whether additional fees are payable for extended usage.
Errors can be highly disadvantageous to talent and difficult to unwind once content has been published or incorporated into paid advertising. Practical training for talent managers and commercial teams is therefore essential. Stephens Scown provides tailored training on intellectual property, content usage rights and influencer contracts to help teams identify and negotiate these issues confidently.
Whilst no two talent management businesses operate in exactly the same way, a well drafted contractual framework provides certainty for both agencies and talent.
As the creator economy continues to grow and mature, agencies are increasingly expected to operate with the same level of contractual and commercial sophistication as more established sectors.
Taking the time to review and update agency documentation can help reduce disputes, improve operational efficiency and provide a stronger platform for sustainable growth.
Help With Talent Management Agencies?
Amy Ralston is a Partner in Stephens Scown’s Intellectual Property, Data Protection and Technology team. She specialises in influencer and creator law and regularly advises talent agencies, creators and brands on contracts, intellectual property and content usage rights. Amy also delivers practical training to talent managers and commercial teams.