You want to break up a band? Try getting them to sign a band agreement.

Why do you need a band agreement? To answer the following questions:

• What’s your organizational structure? LLC? Partnership? Inc.?
• Who owns the name?
• Who owns the songs?
• Who owns the recordings?
• Who collects what money and how is it divided?
• Who’s responsible for what?
• How do you buy/sell equipment? 2/3rds?
• How do you get rid of somebody? Hire somebody?
• What happens if somebody dies?
• Who’s a “keyman” for record company purposes?
• What affect does the presence of a manager or agent have?
• What are the rights of the individuals in the band?’
• What happens if the band breaks up? (How does a “company” break up?)

Most bands don’t get far enough in their commitment to need to answer these questions, and since they are very hard questions to answer and can lead to hurt feelings, they can even break up bands. It’s all about friends till it’s not, unfortunately.

The rub usually comes when you talk about who gets to put their names on those songs. You don’t see too many “group” authors of songs, or books, or visual art. There may be co-writers and authors, but basically, somebody’s name is on the song, which means they own it. But the band may confuse the recording, the arrangement, the cool bass line and the funky drum pattern with “writing the song”.

As I’ve mentioned before, writing the song is about who wrote the melody and the lyrics since those are the two things that are copyrightable in a song.

Here’s a way around that problem: the money the song makes, that the lead singer wrote, goes into the band fund for equal division, or whatever division. The point is, the bands shares in the profits, not the copyright. In this example, if some other artist recorded the song, the lead singer (or her publishing company) would receive the mechanical royalties.

But look at all of those other questions this agreement has to answer, and all of these agreements have to be tailored to the situation at hand. But the basic questions remain the same: who owns what and how is this “company” going to be run? This is NOT easy to do and it should not be tried at home without adult supervision.

What does a band agreement cover?

• Who owns what. Maybe each person brings certain equipment or resources with them. Who owns the songs? Who owns the name? The name thing is important; it’s a trademark issue (another topic for another day), and it creates all those merchandise rights.
• How the band is governed; how are changes made; how do you buy stuff, fire people, hire people (usually stated in terms of a percentage of the band)
• Money, in all of it’s forms and characteristics: royalties, how paid, salaries, expenses, who collects what and how is that money paid out.
• What happens when personnel changes or band dissolves.
• The agreement covers anything and everything having to do with how the band works, who does what, how the money is divided, who’s in charge, how deals are made. Obviously, the more success a band has, the more complicated these matters could be. How you handle these issues is your business. As long as you know that they exist, that’s what I care about.

How do you do it?

• Lock yourselves in a room with a bottle of Jack Daniels.
• Hire a good lawyer. Well, each one of you is going to need a lawyer, come to think of it. I know, that’s a bummer, but each of you have your own rights and interests. If you’re going to enter into a contact with another band, you might want a lawyer. Unfortunately, the same applies to your own band. Obviously, this could get expensive, unwieldy, and stupid, so what do you do? See next:
• Hire a good lawyer and each of you sign a “conflict of interest” waiver, which absolves the lawyer from the conflict of interest inherent in representing both/all sides of a contract. Lawyers are not marriage counselors. Generally, they represent one side or the other.
• BUT! Such a contract would have to be an equal deal among the band members, like 20% splits of everything for a 5 piece band, in order for one lawyer to handle the whole thing. As soon as one band member is favored over another, the one on the short end of the stick needs his or her own lawyer.
• Now, how many bands we know have this? None? There are “production” bands where the band members are probably work for hires and don’t have any rights other than a salary, but everybody else, how do they handle it? Think of any band name that you know and ask yourself, who really owns that name? And why does it matter?
• You have to write something down if you’re going to be serious about this band thing. I listed the things you could address and when you start applying this to your situation, you’ll think of some others. But I’ll bet you that right now, it’s pretty simple: you split the gig money after expenses. You’re not making any publishing money yet, the merch money goes right back in the band, the songs are by two of the guys and everybody’s cool with that, so you’re pretty straight. And Billy thought of the name so it’s his, we think.

So maybe you don’t need a band agreement in writing. If you’re not all heading the same direction the band agreement may not matter but it may force everybody to fish or cut bait. And besides, if the brand has value and can continue to be monetized, it matters very much who owns it and how the money is divided up. A good band agreement is best practices. It helps you structure your business. It’s part of being buttoned-up in a business/legal sense.

What are the basic “terms” of a band agreement?

The questions at the beginning of this article and the list of what an agreement could cover can all be organized under several major headings:

• Parties – who signs it? The whole band? If the band is just a singer songwriter with a rhythm section, the band may really only be a band as long as the singer songwriter finds a way to pay them. In that situation, you may need some performance agreements for certain gigs, or for a tour, but even those are rarely written down unless there’s serious money at steak. You know you’re playing at the business when what you do works without written contracts.
• Type of business structure – partnership, LLC, corporation?
• Ownership – who owns the name, the songs, the van, the PA, etc. When the band makes a recording, a copyright exists. Who owns it? The LLC?
• Term – how long does it last? Till the band breaks up? When is that? When three guys die?
• Money – who gets what; how are expenses handled. Again, for most bands, this is just stuff somebody does – they collect the money and they pay it out. But you can see that if you have any success at all, there are multiple ways of making money, of collecting it, of paying it out, so if it really is a band of people, they might want to agree on how this business is going to be addressed.
• Changes – how many people in the band have to vote to make changes, to buy stuff, to kick people out, to act as a band in any respect?
• Obligations – of each player; rights to use name and likeness, rights to individual royalties, exclusive commitments or not, etc.

Try writing out a band agreement for your band. Assume the splits are easy – 4 ways for example, then what? Who owns what? You know the rest. Apply these general questions to your specific situation.

Use your band agreement to unite your band, not divide it. Once you reach a certain level of success, and lawyers enter your lives, you will find yourselves addressing issues like this. It’s business. It’s not hard and it’s not bad. It’s creative and necessary. It lets you build a career out of what you create and others create. There is such a thing as the art of business and when you can apply that art to your art you will complete the circle of motion, movement, and progress.

John Snyder
September 12, 2010