WHERE IS YOUR HIGHSCHOOL BFF?
MAKING THE CASE FOR BAND AGREEMENTS
MAKING THE CASE FOR BAND AGREEMENTS
Your former BFF is the person you swore to be BFFs with
forever. That’s a lot of forevers. But now, I’m guessing, at most they are just
one of many entries in that ever growing social media news feed that you scroll
through each day looking for the latest buzzfeed
quiz. Things change. People grow apart. If your best friends from your
school days are not your best friends now, my case for having a band agreement
is made. But if some doubt remains…
A group approached me about copyrighting their latest works.
They’re full time musicians, touring a solid 8 months a year and they have no
band agreement. “Nah, we don’t need one. We’re tight. We’re all friends.” I
cannot say this enough – A BAND IS A BUSINESS. And every business needs an
operating agreement. If the band were a bakery and even if the owner hired a
good friend, no one would expect the baker to buy the flour and sugar without
expecting something in return. No one would expect the person at the register
to work for no money…unless they agreed to. (cause that’s how much they love
cupcakes?)
As an attorney in the entertainment field, it’s my job to
imagine how things can go wrong and then try to help artists, actors, and
athletes avoid the worst case scenarios of my imagination. I’ve seen disgruntled keyboardists hold
merchandise hostage; lead singers on the way out demand that all the cash they
put into the band over the years, be paid back with interest; and a drummer who
called every sales outlet to try and stop all sales of music on which he
played.
These scenarios suck for sure but they’re more common than a
band who remains best buddies for decade. The, “it can’t happen to us”
mentality does nothing to avoid the inevitable drama. Too often that drama
unfolds in front of the fans online in the comment sections – a public record
of your inability to manage your business. But there is hope.
A. Be a Business: With 1-2 owners, an LLC
should do the trick. Not every member needs to be an owner. If you have
multiple owners, then an S-Corp or C-Corp might be the better way. **** Speak
with a tax professional before making these decisions as each entity type has
its own tax implications.
B.
Get an Operating Agreement: When
registering the business/band with your state’s department of corporations you
often fill out a very basic operating agreement. It addresses none of the
issues that emerging artists often face.
Band agreements help friends remain
friends. You might have the closest family in the world but the second Aunt
Rochelle kicks the bucket see how tight and friendly they remain. There will be
fights over used coffee mugs and that rusty el camino in the barn. That’s why
Aunt Rochelle has a will. Death may be more likely than a band lineup change
but not by much. Name your top 5 favorite bands you had in middle school that
got popular at that time. Are they still around?
It’s not planning to fail. Its
planning for success. So when those Rock Ross dollars start rolling, every
member knows what’s going to happen and how much of that they will see and
when. And should the “unthinkable” happen, it will hut less.
C.
DDIY: Don’t do it yourself when it comes
to drafting contacts like a business operating agreement. A good attorney is more than a typist. They
will sit wth each member to make sure all their needs are met in the creation
of this agreement. Some people are not business minded. A good entertainment
attorney will be able to translate artist to business and business to artist.
Plus we’ve seen it all. Is gas money for the van a loan to the band? Who has
access to bank accounts? Does gig money get divided each night or does it go to
another purpose? Sometimes you need an outside professional to help bring up
and help answer these questions. You can’t DIY all the time.
D.
Lawyers Are the Bad Guys: Let a lawyer or
manager bring these issues up. Let the outside help be the bad guy. We get pad
for the privilege. Just don’t let the business go bust because you were afraid
to tell your BFF bandmate that the money he shelled out for studio time was a
donation or that you expect to use all the art you create for your solo project
as well.
Band agreements are as unique as the project themselves.
Each time I create a band agreement, it is specifically tailored to fit the
needs of that group. It’s really a document that can’t easily be yanked from
the internet and still cover what the band needs.
