Tuesday, December 28, 2010

Music Business/Law Tips - "Band Partnership" (Part 2)

Fifth, profit splits are very important. In most cases an equal percentage of the net profits (i.e., after expenses) as well an equal division of any losses is the most equitable approach. The splits can be different, however, if certain members contribute more than others (such as songwriting, etc.).

Sixth, leaving member issues need to be anticipated. A way of handling this would be to allow a leaving member to receive the same percentage for activities he or she participated in before departing, but no percentage for any future activities of the group.

Seventh, voting is also crucial to any partnership agreement. It is probably best to provide that any band decisions - such as hiring or firing a new member, buying a piece of equipment, etc. - be approved by a majority vote. If there is a deadlock situation, this can be overcome by a third party vote (such as a manager) or by a coin flip.

Finally, every member of the group would need to sign and date the agreement.

As explained above, this is merely a guideline for some provisions that should be in a band partnership agreement. Obviously, each group situation is different and may require additional - and perhaps more complicated - terms. Although a partnership agreement might seem unnecessary when everyone is friendly and there is no money being made, if the band considers it to be like an insurance policy to prevent possible future disagreements, it can certainly make any transition in the group happen much smoother and without the threat of a lawsuit.

Ben McLane Esq

Monday, December 20, 2010

Music Business/Law Tips - "Band Partnership" (Part 1)

When a band forms, the usual intention is to become a successful recording and/or touring act and to make a profit. To accomplish this collective goal, the individual members contribute their time, talents and money. In essence, there is an implied partnership agreement between the band members. When most people go into business together, there is an official written partnership agreement. However, the majority of bands - including many who are best selling acts - have never formalized their relationship. Often this can lead to expensive litigation when a band breaks up or a member leaves because there exists a question as to how profits are to be split, or who actually owns the group name. This being the case, bands should be encouraged to enter into a simple partnership agreement early on when everyone is getting along. This article will briefly explain the contents of a basic partnership agreement.

First, there needs to be a name for the partnership. Generally, this will be the name of the band.

Second, there needs to be an official location selected as the place of business. A band member's address will do.

Third, the complete name and address of each partner must be specified.

Fourth, ownership of the group name must be discussed. Normally, the group as a unit owns the name and a majority of the members performing together can use the name. The common problem which arises is when a member leaves the band and feels that he or she has the right to perform under that name. A situation such as this needs to be addressed in the agreement.

[part 2 next week]

Ben McLane Esq

Monday, December 13, 2010

Music Business/Law Tips - "Gig Contract" (Part 2)

Sound/Lights - Make sure the agreement specifies who provides/pays for the sound system (PA) and the sound operator, as well as when/if there will be a sound check. Also, specify who provides/pays for the lights and light operator.

Insurance - Although this is often overlooked, it is important that the club have a liability insurance policy in place which covers the artist's performance so that if some injury occurs in relation to the show on the premises of the club, the artist is not liable.

Cancellation - From the artist's perspective, if the club cancels, it should pay the artist a specified amount of damages (preferably the guarantee).

There are some other points that can be covered such as promotion/advertising commitments of the club, allowing the artist to sell merchandise at the club, etc. Above all, make sure the club signs and dates the agreement.

By entering into the above agreement, the artist will find that there are less hassles because there is certainty as to what is to take place and how the artist gets paid. Although there is always the possibility that a club might renege, at the very least, the agreement offers some form of legal protection.

Ben McLane Esq

Monday, December 6, 2010

Music Business/Law Tips - "Gig Contract" (Part 1)

For musical artists that perform in clubs, especially artists that intend to tour, the best form of protection is a "performance agreement" ("agreement") between the artist and the club. It is not always possible to get a club to sign an agreement. However, it is worth requesting. Having your own ready made agreement to present to the club will ensure some comfort that there is proper payment, etc. Such an agreement is imperative if the musician is traveling out of town for the gig.

A performance agreement should contain the following provisions:

- Place Of Show

- Date/Time And Length Of Show

- Wages - It is best to get a "guaranteed" fee agreed to in advance. This is generally paid 1/2 at some time prior to the show and and 1/2 at the gig. Sometimes there is a guarantee, plus a percentage (or else just a percentage alone). It is important to specify what the percentage is based on and how it is calculated. Is it a percentage of ticket sales? Is it a percentage of the door? Is it a percentage of the bar? Is it based on gross or net (after expenses) receipts? If the deal with the club is for a percentage of the door, put a friend at the door with a clicker counting people coming in. Stipulate in the agreement that there are no free entries for anyone (unless they are part of the music industry) if they are not on the guest list.

[part 2 next week]

Ben McLane Esq