Representation News: Lit Managers Shifting to 15%?

About a year and a half ago, I was having coffee with my friend Dallas Sonnier when he said: “We’re all waiting to see who will be the first manager to go to 15%.” It made sense Dallas would say this; after all, he had just told me that ever since the famed 2008 strike, it was taking twice the time to break a writer or sell a script for half the money. Still, he assured me, no literary managers have gone to a 15% commission YET. Everyone was staying put and holding tight, watching to see which of the management “big dogs” would be first to take the plunge.

The good news? To this day, at least to my knowledge, none of the big dogs have. 10% is still the standard commission for major reps in the screenwriting space. However, the same cannot be said for smaller, single-manager operations trying to make a name for themselves out there. In recent months, I’ve observed a number of such shops going to a 15% commission rate, justifying this by explaining that these days, manager have to do a lot more work to help a new writer get out into the industry space and make a real impact.

The first time in recent memory that this had been brought to my attention was when a writing team I was working with was approached by a new management company. The management company, who professed to never having read the writing team’s work (don’t get me started on that… in what world is that even okay???) delivered the writing team what they called their “standard” language for representation, in which it was stated that the management company – which only just opened its doors – would be collecting a 15% commission on any and all writing fees. When said writers raised concerns about this elevated commission rate, they were told by a very irritated management executive that, clearly, and by no uncertain terms that for all intents and purposes, 15% was indeed the industry’s new black.

Let me assure you of one thing: 15% commission is NOT the industry standard for literary managers. Not yet any way. Just last week I had coffee with my friend Jennifer Au, in which we discussed this new 15% trend which is creeping, surprisingly, from the outside in. Jennifer confirmed what I’d already known myself: None of the big, reputable management houses out there have shifted to collecting a 15% commission across the board, and instead are still holding at the traditional 10%. This does not mean that such a move won’t happen one day, maybe even sooner rather than later, whether it is taken collectively or by one reputable management company at a time. At this moment, however, and based on my knowledge and research, the only individuals moving up to a 15% commission are single-manager operations, who justify doing so based on the industry’s new realities.

It is true: These days it takes longer to break a new writer than ever before. By Dallas Sonnier’s logic, managers have to work twice as hard as they did prior to 2008 just to make half the money they’ve grown used to. Because of this, we are seeing many management companies shifting their business model, taking on producer responsibilities, and creating a variety of revenue streams. The shift to 15% commission has taken place in order for managers to take a bigger bite of the revenue generated as their new clients take their first steps into the industry; steps that are likely to generate significantly less revenue than that generated by writers who have been working professionally for a number of years.

However, if the 15% commission conversation is entertained, it is one that should be, at best, temporary: If you are approached by a manager who loves your work, has the vision of where to take it and the connections to get it there, you should only humor the 15% conversation IF the term is temporary, and one that will be reduced once an agent is introduced to your team. As agent introductions are often part of the manager’s responsibilities, it only makes sense his or her commission is reduced once that role is filled. Some may be concerned that a reduction in commission will de-incentivize your manager from bringing an agent onto the team, but rest assured that an agent will be brought on to create new revenue opportunities, which the manager would benefit from in the long run as well. Rather than just getting 15% off the opportunities the manager can create for you, the manager would now be able to collect 10% on opportunities out of his reach, such as staffing and writing assignments. Be sure that language is introduced, in contracts or in email, confirming that once an agent is added onto the team the commission rate will be reduced to the standard 10% until and unless the 15% commission rate gets adopted across the industry.