A working actor or musician in the United States typically pays two separate representatives who appear to do overlapping work. The division is legal in origin and has real consequences for what each can do.
Agents are licensed to procure employment
Several states regulate talent agents directly, requiring licensing and limiting what they may charge. California and New York have the most developed rules because most of the industry sits there.
Under those rules, soliciting or procuring employment for a performer is the licensed activity, and doing it without a license carries consequences.
The commission an agent may take is capped in licensed states, which is why agent percentages are relatively uniform across the business.
Managers advise but do not book
A manager is generally unlicensed and unregulated, and advises on career direction, material selection, publicity and long-term positioning rather than negotiating individual jobs.
Because the manager is outside the licensing scheme, the commission is a matter of contract, and it is commonly higher than an agent's.
The boundary is not always observed in practice, and disputes about whether a manager crossed into procuring employment are a recurring feature of entertainment litigation.
Union agreements add another layer
Performer unions maintain their own franchise arrangements with agencies, setting terms that agents must accept in order to represent members.
Those agreements have periodically been renegotiated, and disagreements between unions and agencies have at times disrupted representation across the industry.
The rules govern conflicts of interest as much as commissions, particularly where an agency has interests on both the hiring and the representing side.
Client volume differs sharply between the roles
An agent at a large agency handles many clients, matching them to a wide flow of open roles and projects. Breadth is the value being provided.
A manager typically carries a small roster and is expected to be available continuously, which is what the higher percentage buys.
The two functions therefore fail differently: an agent's weakness shows as missed opportunities, a manager's as poor choices among the opportunities that arrived.
Lawyers and business managers sit outside both
Entertainment attorneys review and negotiate contract language, and business managers handle accounting and finances, each usually on fees rather than commission.
A fully represented performer can therefore be paying four parties, which is why the arithmetic of a headline fee rarely resembles what reaches the person named in it.
The specific arrangements vary by state, by union and by contract, and anybody navigating them relies on professional advice rather than general description.