Band Contracts and Politics

In the first blog we are going to deal with the thorny issue of band contracts. It is something as musicians that we simply don’t want to talk about. This is because many of us are in it for the art and the joy of playing music and we get caught up in that. However, when it comes to being in a band it pays to protect yourself. We have all been there… we get into bands, get caught up in the music, become friends and maybe even socialise together. You think that nothing will ever happen.  Then all of a sudden an issue arises and before you know it demands are flying all over the place and threats of legal action are getting thrown around. So if you are in a band or just joining one. Stop what you are doing immediately and get a contract drawn up that protects you and your band members.

Of course, as a musician I have also learnt the hard way and had people asking for large sums of money just because they decide to leave. But with no contract in place you are working in the dark. So here are five key areas where you will need a contract:

      1. Buying Gear: The big elephant in the room. My advice right off the bat is NEVER buy any equipment as a band. It is a legal minefield. Especially if someone leaves the band. Personally, I have been stung big time by this one when a band member has requested their initial investment back. Resulting in the gear being sold for allot less and the ex-band member getting more than the gear is worth. So legally where do you stand on this. Technically, unless a contract is drawn up you are not legally required to pay anything back. But morally, something should be given back. From a legal point of view what should happen here is that the piece of equipment should be valued to the current book value, taking into account for wear and tear and the natural depreciation of the piece of equipment and then shares worked out.

        So for example: A five-piece band buys a piece of equipment worth £3600. Each band member contributes £720 towards the price. So lets say a band member leaves/gets fired and demands their £720 back. Firstly, you have to work out the current book value of the piece of equipment. So lets say the piece of equipment is now worth £1600. The departing band member is entitled to 1/5 (their share) of the remaining value. So that is £1600/5 = £320. So the departing member is not entitled to their initial £720 investment, but instead, legally they are only entitled to £320. However, if the person did not invest equally then you have to work out what percentage they invested and adjust that to the current book value. It is also wise to build in a ‘time clause’ to the contract. As this allows the remaining band members time to come up with the money. This stops a situation where a band member leaves and the next day they are demanding and sending threatening texts about getting their money back. So overall, I would suggest that you DONT buy equipment as a band to avoid this. But if you do, make sure you have a contract drawn up stating all the terms such as what the gear cost, each persons investment and how each band members share will be valued at the time of departure.

      2. Songwriting: Does the band write songs together or are the songs brought in. Are band members co-writing. If so you need to draw up contracts to that effect. Firstly, you will want to outline just what constitutes a song. Is it the words and basic harmony or does all the extra decoration count. Legally, a song is the words and music. So if a band member brings a song into the band with the lyric, melody and harmony attached then in theory this is the song and therefore they own the song. The issue arises when a part is a signature part. But usually this is done on a case by case basis. For example, The Police ‘Every Breath You Take”, the song is owned by Sting. But the key part of the song is the riff so both Sting and Andy Summers have a financial agreement in place to make sure that credit is given to this key part in the song. But you will need to have an agreement in place to say what constitutes a song, how the writing credits are split and then any further agreements on a song by song basis where required.
      3. PRS/PPL: Song royalties are the prime cause for any band breaking up. Quite simply, if one person is writing all the songs and getting thousands in each PRS distribution it won’t be long until frictions start to appear. Especially in a grass-roots independent act. Personally, I have always worked this with a contract agreement where all PRS income is put back into the band to help fund it until a certain yearly financial threshold/turnover is reached. I have found this to be a fair way to do it since the songs are generating revenue that can come in useful when paying for band activities, such as touring. Once again however, make sure this is all drawn up in a contract and everyone knows what the deal is. As this will save serious fights down the line. Likewise, if you go into another co-write session outside the band make sure before you leave this session that your song splits are all in place and signed off. Draw this up as a contract too with each person holding a copy. You can be guaranteed that if you don’t do this the other party will take the song, pass it off as their own and not credit you at all. Harsh, but true.
      4. Recording: Who owns the recording? Typically, the simple answer is that whoever pays for the recording owns it. But lets say the band paid for the recording together. You are then in a world of trouble unless you have agreed terms. Lets say a band member leaves and the song ends up becoming a hit song and generates a healthy revenue. Then you may have to pay that band member a share of the profits. However, if you are in a band were a band member owns a studio and records all the music. Then unless you have paid for the studio time then you may have to prove your ownership legally. So once again, before you enter the studio have agreements in place as to who owns what and who is liable if the worst should happen.

        Another grey area however is if you win a ‘Recording Package’ as part of a Battle Of The Bands type scenario. Typically, the people offering the prize are paying for the studio time or the studio themselves is sponsoring the recording time. So you will find that they own the recording. So therefore you will have to negotiate any legal terms and issues with the awarding body to ensure you are cleared to use the recording and if there are any terms or conditions.

      5. Investing: As an independent band you will find things cost a fortune. From touring, radio plugging, press plugging, recording etc etc etc. So often you will have each band member investing a certain amount of cash into the business, in the hope of getting to the next step. So once again, you should draw up a contract stating that any investment into the band is just that… an investment. You are investing in something that will hopefully get you a step further on in the music business and therefore, your career. So you need to ensure that as a band you are protected against a band member leaving and demanding money back. Personally, I have had this situation where a band member has invested cash. Only to leave the next month. The cash was pretty much spent straight away as a share in Radio Plugging that we all agreed to spend. But the band member decided to leave a few weeks after. They then demanded their full investment back because they “weren’t going to see the benefits”. So you have to draw up a contract so that everybody is clear that any cash invested in non-refundable.

    Overall, before you play a single note together as a band make sure that you have agreements in place to cover any and all eventuality. Things will turn nasty, it doesn’t matter how good of friends you think you are. Where money is involved people are brutal. You will soon find out who is in it for the love of music and who is only in it to get famous quickly with minimal effort. So protect yourself from day one.