The Importance of Signing a Band Agreement
In the music industry, a band with any sort of longevity has likely experienced business disputes among bandmates, whether relating to royalties or profit splits, use of the band name, copyright ownership, song credits, etc. Bands like Pink Floyd and Guns n’ Roses, to Stone Temple Pilots and Slipknot, have all faced serious (and expensive) legal battles over the years.
A well drafted band agreement is critical to ensuring all band members are on the same page from the beginning, and will hopefully assist in avoiding disputes altogether, or provide swift clarity in the event a dispute arises.
Whether your band has just started playing, or has been together for years, if you don’t have a band agreement in place, please get your act together and get on it!
What is a Band Agreement?
Simply put, a band agreement is a legally binding agreement among band members, which sets out each member’s rights and obligations with respect to band business. I will provide an overview of some terms often found in band agreements, below. But first…
Why Don’t Bands Often Sign Band Agreements?
For one reason or another, in my experience, bands don’t typically enter into band agreements, and those bands that do are often working with agreements that are not clearly drafted or are missing key terms (or both!). As a result, unfortunately, dealing with disputes or a breakup becomes much more complicated and expensive.
I Mean, What Could Go Wrong, Anyway? …
Without a band agreement, things could go terribly wrong. For example, upon a breakup, multiple band members may attempt to use the band name. Disputes may arise as to who is entitled to what royalty/revenue split of master or publishing income, who is entitled to perform and/or administer the band’s catalogue, who should drive off with the band van, entitlement to funds in the band bank account, etc. Assuming there is no breakup, band members may also disagree on who can sign cheques, withdraw funds from the band account, sign certain contracts such as performance agreements, retainer letters with professionals, etc. As you can imagine, things can get ugly quick if relationships sour, disputes arise, and there is no agreement among band members to sort these items out.
Business Structure Considerations
Before diving into provisions you might see in a band agreement, some important points on legal business structures for consideration: In Nova Scotia, for example, bands will be deemed general partnerships under the law if the band members carry on business with a view to profit, and the relationship among band members/partners is not an incorporated company. In other words, if the band hasn’t taken steps to incorporate a company, and if the band members carry on business with a view to profit, the band will likely be deemed a partnership at law.
Why is this important? If a partnership exists at law, and if the partners do not have an agreement to the contrary, the following could apply under Nova Scotia law:
- Partners equally share profits and liabilities (including revenue from copyrights);
- Partners are jointly liable for decisions made by others
- Each partner is an agent and binds the partnership;
- Not even a majority can remove a partner from the partnership;
- New partners cannot be brought in unless all existing partners agree;
- The partnership dissolves upon the death or bankruptcy of a partner; and
- Every partner takes part in management of the partnership.
Some of these default rules might be fine, but being bound by all of these default rules is often not appropriate in band situations, where bandmembers would prefer to structure their own relationship and make their own rules, rather than have the rules dictated by provincial law.
Band Agreement Terms/Considerations
A non-exhaustive list of terms you will likely see in a standard band agreement includes the following:
Partnership Purpose – Bands should clearly identify the purpose of the partnership, such as recording, song writing, touring, selling merchandise, etc. This is also a good exercise to ensure everyone is on the same page with how the business will be operated into the future.
Band Name – This is a big one. If your band breaks up, the last thing you want is all 4 members fighting to use the same band name. Bands need to determine who is authorized to use the band name if the band breaks up. If the band has one key performer/songwriter, for example, it might make sense to allow her to continue using the name if the group disbands. Alternatively, the agreement may dictate that only the entire group may use the name (or upon consent of all members). There are lots of examples of disputes arising with respect to band names. For example, Stone Temple Pilots sued Scott Weiland for trying to use the band name after leaving the group (STP apparently had a band agreement, which stated that the band name belonged to the band/partnership, not any individual member). Pink Floyd and Guns n Roses also found themselves in disputes around who could use the band name.
Existing Assets – The agreement should confirm whether members of the group have brought assets into the partnership, such as gear, cash, tour van, etc. If so, the agreement should clearly set out how this unequal investment in the partnership will play out. For example, if a partner brings significant assets into the partnership, they may be awarded a higher royalty split, or it may simply be established that the individual partner (and not the partnership) owns the equipment brought in by that partner.
Copyright Ownership - The agreement should outline who owns existing copyrights and copyrights on a go-forward basis (both musical work and sound recording copyrights). Whether the band/members are party to a label or publishing deal will impact how this clause will be drafted.