What does an intermediary cost?
Make a clear agreement about the costs of the intermediary and how they are calculated. For which services do you pay and what is a reasonable percentage for this intermediary to earn?
What a percentage is requested for
Establish for what part of the income the intermediary can calculate a percentage, and whether that percentage is fixed to a maximum (for instance with a series of shows for which only one contract had to be made). With exclusivity contracts it happens that a percentage has to be paid for all income, even when the intermediary has performed no services. That is unreasonable. There should be an evident connection between the intermediary’s services and the artist’s work from which he is earning.
What is a reasonable percentage?
The amount of the percentage depends on the quality, quantity and kind of service performed. In general a percentage of 10-15% of the net income should be calculated if the services involve only mediation and booking. This includes the contract transaction from the drawing up and mailing until the sending of the invoice and receipt of the finances. This usually does not include costs associated with any wages administration. If the intermediary is assigned more duties, for example in the development, production and distribution of publicity materials, the percentage can run up to 25%.
Settling the percentage can best be done using a proposal of the services to be performed, along with the (expected) income and expenses. From this you can roughly calculate what the services cost, what the performances cost you, and what actual income is left over for both parties. By repeating this procedure once a year (when extending the contract) with a long-term intermediary-artist collaboration, an increasingly accurate overview is established. This also provides an opportunity to adjust the contract’s conditions.