03 Jan What Happens When Your Band Breaks Up?: Why You Need a Band Agreement and Major Issues to Address
Posted at 19:14h in UncategorizedArtists do not like discussing contracts, period, and one of the harder ones to address is the band member contract because it can feel like it acknowledges a certain level of distrust or at least a certain amount of realization that the band is going to end at some point. Usually, band members are also close friends who have been through a lot together, and they would like to think that means that no one in the band would ever take advantage of anyone else. However, reality often ends up playing out differently, with complications and disagreements undoubtedly arising at some point in a band’s career, so it’s best to have an agreement in place just in case of such an issue. For example, how are major band decisions determined? Is it an equal vote, or do certain members have more of a say? Who decides what gigs to play? What are the consequences if a band member misses a certain number of shows or rehearsals? It may seem unnecessary to figure out these scenarios before they happen, but it will ultimately save your band from an even bigger issue when there’s no clear solution and there’s actually significant money at stake. Every band that has fought over money or songwriting credits swore at some point in their career that these things didn’t matter at all to them. Nevertheless, when your band is earning money, everyone will want their share, and if band members are not sure what that fair share is, then the fighting will start. This article will look at some of the most important points to include as part of your band member agreement. CONTROL AND DECISION-MAKING AUTHORITY. Generally, each member of the band should be entitled to one vote, with a majority approving most band matters. However, this can be altered in the band member agreement. For example, you may want to require unanimous approval for matters that don’t usually occur in the normal course of business, and depending on the number of members, you should also include tie-breaking provisions. This can include having a third-party industry professional, perhaps the band’s manager, accountant or lawyer, break an existing tie. Decisions as to the requirements to hire and fire a band’s music business professionals, including management, attorneys, agents and accountants, should also be decided in the band member agreement and may be subject to unanimous approval. Other important considerations include how financial contributions to the band are handled as well as language specifying the vote necessary to expend the band’s funds, including for example, a particular set amount that requires unanimous vote as opposed to a majority decision. DEPARTING MEMBERS The band agreement should also include provisions on how to remove an existing member (typically a unanimous vote), as well as how a band member who voluntarily quits as opposed to being fired is treated in various instances. For example, can the former band member utilize the band name at all? Deciding on the use of “formerly of” and how it must be billed on flyers and other advertisements has led to some very contentious fighting between some of the biggest legacy acts of the past few decades. It is also important to agree as to how a leaving member is treated with regards to any future income earned from the band. The agreement should specify whether a leaving member is entitled to receive residual funds for any projects they were involved in or whether they will receive no additional funds after they leave the band. Other compromises could be that the leaving band member’s interest is reduced after they leave. A buy-out provision is another possibility and may also be included where the remaining band members agree to a lump sum. That sum could be payable in installments to the leaving musician as a buy-out of any future income they may be entitled to. Additionally, when a new member joins the band, the new band member should be required to sign and agree to any existing internal agreement to ensure they know what they are entitled to and what is expected of them. For example, does the new member have any ownership rights in any prior existing material? INTELLECTUAL PROPERTY An often-overlooked point to many bands and groups is what rights, if any, does each band member have in the name. Without an agreement, a band is typically treated as a partnership under US law, and under partnership law, each partner would be a joint-owner of the name and any partner would be permitted to use it. However, this can become very messy if the band breaks up. In order to determine name ownership, band members should agree in writing as to who owns the band name while the band is together. They should also agree as to how each band member may or may not utilize the band name after the band is dissolved or if a particular band member leaves. In some cases, the member who originally came up with the band name will be the sole owner; and, in other instances, each band member could equally own the band name or one member could own the name with the other band members still entitled to receive income based on the licensing of the band name for merchandise and other non-music related products. Considerations should be taken into who currently owns the Official Band Website, Official Band Social Media accounts (Twitter, Facebook, Instagram, etc.), merchandise and/or music inventory, the physical band equipment (instruments, recording equipment, sound equipment, lightning, etc.) and intellectual property assets (songs, images, videos, logos, recording agreements, etc.). How the property is distributed and owned upon the dissolution or upon a member leaving may also be included in the band member agreement. CONCLUSION History teaches us that bands will argue and disputes will arise, so the best thing to avoid making an issue bigger than it needs to be is to have procedures in place that address how to deal with as many situations as the parties can think of. When you’re doing business with friends, it is a good idea to make sure your cards are on the table up front so no one feels slighted or taken advantage of. DISCLAIMER: This article is intended for informational purposes only, and is not intended to, nor does it create any attorney-client relationship. To be clear, this is ATTORNEY ADVERTISEMENT, and THE CHOICE OF A LAWYER IS AN IMPORTANT DECISION AND SHOULD NOT BE BASED SOLELY UPON ADVERTISEMENTS.