There are few things that knit hearts together as tightly as music. The relationship between band members becomes as intimate as a marriage as they spend time, money, and passion pursuing similar dreams. A contract may be the last thing on your mind when you start a band, and even less so when you are preparing for a marriage. But we agree with Kanye West in his song Gold Digger when he says, “We want that prenup!”
Nashville entertainment lawyer Trip Aldredge has seen multiple cases where contracts have saved the friendships of band members even through difficult times of transition. When asked why is it important to have a contract, he said, “...under state law, two or more people working together for a common purpose are deemed to be a partnership and if these people do not specify their rights and obligations, then they might find their actions governed by state partnership law. This is especially important when one member decides to leave a band. It is really important for bands to have this discussion once they decide to take their music seriously.”
State partnership laws say that partners equally share in the group’s profits and are equally responsible for the group’s losses unless otherwise stated. It may be simple to assume that each member of the band is responsible for an equal share of what is earned, but there are cases where some band members are more financially able to contribute to the band, and therefore are looking for a return on their investment. In other cases, your band might work with studio musicians. By creating a contract, you can clearly state who is in the band, and who is being hired as a “freelance” musician.
SoundCorps board member Mark Hackett is also a founding member of Chattanooga law firm Evans Harrison Hackett PLLC and he’s no stranger to the music industry. Mark says “Bands worry that hashing out these decisions may disrupt the camaraderie and artistic focus of the group, and, in fairness, sometimes the discussions can be difficult. But the time to address these issues is when the group is getting along and can discuss things amicably and rationally. While a band should always focus on the music first, the business aspects should not be ignored or delayed, or the band is just asking for trouble down the road.”
Now that we’ve reiterated the importance of having a member contract, let’s discuss what goes into it. This list is not extensive, but should give you a good starting point for discussion with your group.
Ownership of Group Name. Was the name a group contribution? If so, then the band needs to decide if everyone will be able to use the name or if nobody will have permission if the group breaks up. Was the name created by one person? Then it might make sense that only a group comprised of that member and at least one other member can use the name. There are many different ways this could pan out. The important thing is to agree upon how the band name can be used in the future.
Ownership of Songs. Does one person have rights to a song if they wrote it and let the band perform it? Do they retain that ownership if they leave the band? Does ownership rest in part with each member of the band? What are the ownership percentages?
Where Does Income Go? How are Business Decisions Made? These questions go hand in hand; once money is made, where does it go? Does it get saved in a bank account? How are band members paid after the show; on a schedule or immediately after the gig? And who makes those decisions? Is it a group effort, or one person’s responsibility to distribute payment?
Sharing Loss and Profit. For many groups, this will not be a problem because all members agree to receive equal distribution of profits. But what if you add someone to the group? Will they be paid the same as the founding members? What if someone leaves? Will they still be paid royalties for songs they contributed to after they leave? Will that be a reduced percentage of their profit?
Taking the business side of your music seriously will save you and your group from heartache if things come to an end, but it will also hold each person responsible for contributing to the growth of the band when things are going well. With that settled, there is more time to focus on your art and the people who are joining you on the journey of life and music creation.
Want to get started? A simple Google search of band partnership agreements reveals quite a few helpful templates.