During the course of the interviews carried out for the Irish Music Industry Podcast, entertainment solicitor Willie Ryan recommended that bands should draw up and sign a band agreement as soon as possible. If you’re the one who whips out a band agreement for everyone to sign down in the rehearsal room on a Tuesday night before your band has even played a gig, not only will you be regarded with deep suspicion, but it has the feel of whipping out a pre-nup on a third date. It’s still a good idea though.
The difficult truth is that most bands break up, members come and go, people fight about song credits and whatever you all agreed to at 3AM after the best gig you ever played in your lives (fueled by a free slab of cans) can be easily forgotten in the cold light of day. As dull as it may seem, having a band agreement makes sure that all the business dealings, the stuff you could potentially fall out about, are laid out clearly and unambiguously. An agreement can help with defining roles and responsibilities, lending focus and drive to band activities. If you’re managing a band, it makes sure that any bumps in the road ahead don’t cause a car crash.
As soon as a band plays a gig, and money changes hands, there needs to be some tax paid (if you’re lucky enough to get cash in the claw, you can maybe postpone this for a little bit), the money needs to be split, if it’s original material an IMRO return should be filed for royalty returns. Before you start getting paid you need to register as a limited company and set up a bank account. This can be really important in the early life of the band, even if you’re initially operating at a loss. If the band are making a loss, you can claim that in your tax returns and it is possible you will get a tax reduction on other earnings you may have, based on the losses made by the band.
In order for your songs to be registered with IMRO, all the members of the band who are entitled to royalties need to become IMRO members, and each original song needs to be registered with the percentage spilt between member writing credits/royalties also registered in order for payments to be made. The band agreement will make all of this run smoother. It is a contract, but provisions can be made to amend the contract as the band changes and evolves, it shouldn’t become a burden, it should be a help.
From HERE you can download a template Band Agreement that should serve as a good starting point for drawing up our own band agreement, getting a solicitor to cast their eye over it is still a good idea though, if you can afford it. Each section is numbered, and I’m going to run through all the sections in this post. There are blanks that you can fill in and options that you can delete in order to make the template fit your own situation. As well as a description of each section, there are examples of when band agreements go wrong provided by Oasis, Fleetwood Mac, Foster & Allen, The Cure and a few more expensive and note worthy cases besides. Tread carefully.
This section sets out who is in the band, the abbreviated terms used for the documents and relevant date from when the agreement starts. The first blank to be filled in here requires the full name of each band member.
2.0 The Band Partnership
For the purposes of this document the band is referred to as a partnership. For the purposes of accounting and finances the band should set themselves up as a limited company. Have a listen to episode 3 of TIMI Podcast for an explanation of why this makes sense by business manager and accountant Dominic Kelly. The first gap in this section can be filled in with the band name. The second gap requires a name and address. Not massively important, but it might make sense to pick an address that can receive post, which may not be your rehearsal space. It also might make sense to have it as the same address that you use to register your limited company to and your band bank accountant. The person in the band who lives closest to your rehearsal space? If all else fails draw straws or pick the address of the member who missed your last load in.
3.0 Band Partner Services
This sections lays out what is required of each band member i.e. what their job is. You can include other activities like busking, conducting interviews and cleaning the rehearsal space if you like, but probably best to keep it simple. If a band member signs this agreement and fails to meet the services laid out in this section, they’ve broken their part of the agreement and that could be grounds for a serious discussion, so treat this section carefully.
4.0 Non-Band Activities
Lots of bands have members that play in more than one band, the classic example being the cover band that pays the bills and the original band that provides the creative release. This section makes provision for that, but also stipulates that other business activities should not interfere with the band this agreement covers. Be careful with this one too, if you miss a gig because you’re working, you would be in breach of this agreement. You may need to loosen it in order to make allowances for people’s employment. The second section forgoes any claim to earnings made outside the band by band members.
This one seems straight forward, but even the most seasoned pros get tripped up by this. When it comes to high maintenance and complicated inter-personal relationships, it’s difficult to top Fleetwood Mac. After a 43 year acrimonious split, the band got back together and were preparing for a world tour that was worth hundreds of millions of dollars. Less than a week after performing together at a Grammy event in New York in January 2018, Lindsey Buckingham was informed that he was dropped from the band and tour. Buckingham was replaced by Mike Campbell of Tom Petty’s Heartbreakers and Neil Finn from Crowded House.
Buckingham maintains that the dispute arose as a result of him wanting to play some solo dates during the tour schedule. He also maintains that by sacking him, the other band members were in breach of their contract. He sued the band for loss of earnings which is estimated at somewhere between €10 and €12 million. Getting a look at Fleet Mac’s band/tour contract would be very interesting, and details of it will probably be reveled over the course of that lawsuit.
Buckingham and Stevie Nicks were romantically involved when the band formed originally, and Buckingham has said that when he was asked to join Fleetwood Mac he only did so on the proviso that they let his girlfriend join too. Nicks and Buckingham eventually broke up permanently, after a couple of trial runs, and while it did spell the end of the band’s harmonious existence, it did also give rise to the song “Go Your Own Way” among others. Buckingham laid some of the blame for the most recent band split on Nicks. He said that the band manager told him that Nicks was annoyed because he smirked while she was giving a speech at the Grammy event they played at in New York.
If you want to stick in an extra section in the band agreement that deals with band members becoming romantically involved with each other or each other’s partners, go right ahead, and please send me a copy of the wording.
5.0 Name and Logo
Figuring out who owns the band name and what happens it if the band breaks up is very important. The group De Dannan broke up in 2004 and their fiddle player continued gigging under the name Frankie Gavin and De Dannan, a name Gavin registered with the Companies Registration office. One of the original members of the band sent Gavin a solicitor’s letter asking him to refrain from using the name. Things got really ugly when two members of De Dannan(not Frankie Gavin’s De Dannan!) rang RTE’s Liveline and aired the grievances on the national airwaves. A slagging match ensued, that included personal and professional insults. Nobody wants to end up on national radio, insulting lifelong friends while Joe Duffy salivates over the microphone, adding fuel to the fire. Are we agreed on that? Good.
Thankfully De Dannan put their nomenclature differences aside and reformed for a series of gigs in 2017. It’s nice that the reunion and performances took place before Alec Finn passed away in November of 2018. Unsurprisingly, Joe Duffy did not cover the reunion.
When it comes to figuring out a name, a good start would be to check that no one else uses it, it doesn’t turn up any registered uses on a search and possibly that it can’t be misconstrued in a manner that’s offensive to any groups of people e.g. Lynchedchanging their name to Lankum in 2016 once they began touring internationally. Had they been a National Front Grindcore band Lynchedmight actually have been a perfect name to tour with.
If a record company starts sniffing around your door, one of the things they’ll be interested in finding out is if you have the right to use the name of your band, thus giving them the right to use the name when releasing and promoting your work. Having this sorted in advance of courting record companies makes sense.
The first blank in this section of the band agreement is for the name of the band. The next section is optional if the band have a logo that is also to be included in this section. There follows three optional sections that deal with rights to the name of the band in three different ways. The first is applicable to all members of the band owning the name and no one using it after the band breaks up. The second is applicable if a number of the band members have more right to the name than others (in the case of this agreement it’s two). If the two members whose names are added to this section of the agreement leave the band, the band can’t use the name any more, neither can the named members. The third option gives ownership of the name to one member of the band. Delete the ones you don’t need and fill in the blanks as required.
In most cases it will be agreed that all the band members own the name of the band, but it could be arranged that one member might want to include the right to continue using the name of the band if the band splits in the agreement. It could be agreed amicably that one band member has the right to continue using the name or in the example agreement included, goodwill and reputation can be given a value by an accountant agreed upon by all members, and this is the value of the name. If any band member wants to use the name of the band after a split, they can pay the other members the goodwill and reputation value. This might have saved De Dannan a bit of bother. Whatever arrangement your band decides upon, it should be included in the band agreement.
When you’ve found a band name, take a leaf out of Frankie Gavin’s book and register it immediately. Get yourself along to https://www.cro.ie/Registration/Business-Nameand invest €40 in keeping your band a Joe Duffy free zone.
This section can be seen as almost a code of conduct where each member of the band is committing to behave in a way that doesn’t cause the band any damage. It ensures that each band member is committed and available to meet the terms of the agreement and it protects band members from claims that might be made if another band member breaks these commitments.
Be careful with this one too. An action that could hurt the Band Partnership is open to interpretation. The Oasis documentary Supersonicprovides some great insight into the dos and don’ts of band relationships, to say nothing of brotherly love. One incident recounted in the documentary is from quite early in the band’s career, when they were making their way to Holland on a ferry to go play in Europe. Mayhem ensued on the ferry, lots of drinking and a few fights resulted in the band being handcuffed, locked up in a cell on the boat and deported once they reached their destination. From accounts of what went on during that ferry trip, it would seem that Liam was central to all the most unruly shenanigans.
You would think that getting arrested, deported and missing your first set of European dates could be counted as something “that might hurt the Band Partnership”, but when Noel rang Alan Magee from Faction Records, the man and company who’d signed Oasis, to tell him what had happened, his only response was “brilliant”. That incident fed the Oasis legend and fueled their love/hate relationship with the UK press. As I said, open to interpretation.
7.0 Profits and Losses
It’s usually the case that band members will share profits equally, and that is laid out in this section. How and when the profits are to be distributed can also be added in here e.g. quarterly might be a good approach or even annually after all expenses for the year have been dealt with. Payments arising from royalties and publishing can be handled separately and are dealt with in section 8.0 and 9.0. If profits accruing from streams & sales and from publishing are to be handled in the same way as profits from performing, sections 8.0 and 9.0 can be ignored and deleted. It should be noted though that separating these different revenue streams now can make things easier should the band ever negotiate a record or publishing deal.
Generally a band will share net profits from live performances, merch and sponsorship profits evenly among the members, but there are exceptions where there is a recognized creative force within the band. Songwriters will usually receive the profits from publishing deals, recorded music sales/streaming and royalty returns. Some acts set up with musicians getting paid a wage, more akin to a session musician situation.
Most friction usually occurs in the area of songwriting income, so laying this out clearly in a band agreement should avoid any future problems.
In this band agreement template there is a distinction made between net profits from payments to the band (e.g. performance fees, sponsorship & merch) in section 7.0, ownership of recorded compositions in section 8.0 and division of revenues from publishing in section 9.0.
An example of how not to handle these details was evident in the case of Tolhurst v. Smith and Others . Laurence Tolhurst was the drummer and co-founder of The Cure. He was asked to leave the band in 1989, and following this split, he sued Robert Smith and the band’s record company, looking for an increased percentage of recording income i.e. he wanted to be included in ownership of recorded compositions. The court case didn’t go well for Tolhurst, his drinking and declining contribution to the band was laid out before the court. The judge came down on the side of Smith and the record company, the judge added that Tolhurst was lucky to get the monies he had already received.
8.0 Ownership of Recorded Compositions
The first part of this section deals with setting up your band as a publishing entity for the purposes of handling publishing deals and revenue. Music publishing is one of the areas of music where there is the possibility to make some decent money, much more so than record sales or streaming. Katie Kim in episode four of TIMI Podcast discusses how valuable her sync deal with Netflix was, both in financial terms and allowing her the financial freedom to concentrate solely on writing music for a period of time.
If you are lucky enough to have your music used in ads, on television or in films, the ownership of the recorded compositions will become important. This is something you should have figured out anyway for registering your songs with IMRO. When each track is registered you need to supply a percentage breakdown of the ownership of each track. Royalties will be paid according to that break down.
9.0 Division of Publishing Revenue
In episode four of TIMI podcast Katie Kim discussed paying her producer a percentage of the publishing fee she received from Netflix as he had contributed to the creation of the music to such an extent that he was deemed to be integral to the composition of some of the tracks. How publishing revenue and royalties are distributed vary from band to band, and they can even vary from track to track within a band depending on how the tracks were written.
There are three options to choose from in the template provided. The first splits all publishing income evenly between all band members.
Option two distinguishes between songwriting income (e.g. IMRO royalty payments) and publishing income (e.g. having your track used on Netflix). In option two the publishing income is distributed equally among the band members and the royalty payments are shared between those credited as the song writers.
Option three works out a ratio to divide the publishing revenue. If you wrote the song you get one share. If you played on the song, you get one share. As a hypothetical example, Let It Be was written by Paul McCartney. Under option three, any profits the recording of that track earns, from both royalties and publishing, is split into five. Ringo would get 1/5, John would get 1/5, George would get 1/5 and Paul would get 2/5. The fact of the matter is that The Beatles Manager Brian Epstein owned the Beatles catalogue while he was alive, having got The Beatles to sign it over to him, Michael Jackson subsequently bought it for around $47.5 million in 1985, and now it’s owned by Sony. In reality Sony get 5/5 of publishing revenue. In 2006 The New York Times valued the catalogue of Beatles songs at over $1 billion. Paul McCartney has filed a law suit to enact the U.S. Copyright Act of 1976 in an effort to regain publishing rights. I wouldn’t be betting on him winning.
We’ve probably had enough horror stories form the world of music, here are some good examples of best practice; not half as exciting as fights on ferries though. Bono writes the lyrics and vocal melodies for U2 tracks and Edge generally comes up with the rest of the music. The four members of the band work out songs together from there. They all have all equal share in profits and ownership and that’s worked out well for them all.
10.0 Publishing Administration
This section lays out clearly the publishing rights of the band partnership. Paul McCartney would not be fighting for the ownership of The Beatles catalogue if this section had been in their band agreement, and had been enforced when Brian Epstein got them to forgo their ownership of the publishing rights. This section also deals with the entitlement of band members who leave the band. Interestingly this is a topic that Lizzie Fitzpatrick addressed in episode two of the TIMI Podcast. Band members that leave the organization won’t be entitled to revenues generated from works that were created after they leave the band.
There may be scope for what is called a “sunset” clause here. It’s possible that a member may leave a band, but has contributed to tracks that hadn’t been released before they leave, but then the tracks get released after their departure. This is the situation that Lizzy referred to. A sunset clause would entitle a leaving member to a percentage of revenue that diminishes over a fixed period e.g. entitles to 5% of works created the first year after they leave, 2.5% of works the second year after they leave and 0% after that.
11.0 Meetings and Voting
As with many of the sections in this agreement, this one will have to be tailored to suit the particular requirements of a band. There is a general list of most of the decisions a band will have to make during their existence. What you will need to decide is whether this can be decided on a majority vote or whether it should require a unanimous vote. Taking on a new band member seems like something that should require a unanimous vote, if it is, put a tick in the unanimous box next to this decision.
If some members of the band have an extra stake in things, towards the end of this section there is a provision to give some members extra voting power. Let’s go back to the Coldplay example where the split royalty earnings 40/20/20/20. If that were to be carried over in voting, Chris Martin’s vote would be worth two votes, while the other band members vote would count as one vote. There is still a chance that Chris could be outvoted in majority decided areas.
Some bands have an even number of members, so situations can arise where there is a split decision on some votes. The last part of this section names someone who can decide which way split decisions go. A manager might be a good person to name here, someone the bands trusts, you could also share this among band members year on year or even toss a coin.
12.0 Books of Account and Records
Once you start getting paid, you’re going to have to start declaring the payments and paying tax. You can try to avoid it and once upon a time there was a lot of cash changing hands, which helped keep things in the shadows, but as your profile and gigs start to become noticeable, consider yourself on Revenue’s radar. In episode two of the TIMI Podcast, business manager and accountant Dominic Kelly discusses issues around this area.
Most bands won’t be in a position to afford an accountant when they start out, but in some instances an accountant could pay for themselves and earn the band money. If your band is operating at a loss initially, these losses could be offset against tax payable on non-music related earnings of band members. If your band starts to turn over more than €37.5K per year, you will need to register for VAT.
Whoever looks after your accounts, whether it’s someone in the band initially or an accountant, all the band members should be able to have a look at the accounts whenever they want. All band members will need copies of the accounts if they have other jobs and are filling out their own personal tax forms. Once the band starts making money, all the members will be liable for tax on those earnings and this liability can be transferred to earnings from other work outside the band. A mistake many bands make is not keeping money aside for tax and VAT payments that will accrue over the year. An accountant can estimate what your tax costs will be for the year.
It’s easy to ignore this stuff, but it may come back to haunt you in very unpleasant ways. Are you ready for another horror story? Country, Irish & Folk duo Foster and Allen seem like pretty unassuming dudes, and it shocked a lot of people to read that they were being brought to court by the Revenue Commissioners who were pursuing them for a bill of €6 million in 2011. The sum seemed outlandish when you considered these unassuming auld lads from Westmeath with accordions. Foster and Allen maintained that their business manager and accountant, Barrister Patrick Russell, had been in charge of that aspect of their career and having paid Russell €50,000 each, he supplied them with a letter from Revenue that stated their accounts were in order. The letter was forged.
Patrick Russell worked as a barrister, accountant and financial consultant for Foster & Allen and other clients. Kings Inn initiated proceedings to have Mr. Russell disbarred, the first barrister to be disbarred in the institutions 470 year history. Bar Council members who fall foul of the code of conduct usually resign voluntarily if they find themselves in hot water. Following the Foster & Allen case, Mr. Russell’s activities as a financial advisor became the subject of a criminal investigation by The Garda Bureau of Fraud Investigation. Only months before Foster and Allen’s case came to light, Russell found himself in the High Court for misappropriation of €580,000, given to him by another musician, Patrick Griffen; Russell was also meant to be dealing with Griffen’s tax affairs. Interestingly, Barrister Patrick Russell was once a business partner of former Taoiseach Albert Reynolds.
Foster & Allen appealed the debt in the High Court, citing how they were misled by Mr. Russell. They lost their appeal. It seems that they had been aware of ongoing difficulties with their tax affairs ever before Mr. Russell got involved. They presumed that the Artists Exemption Relief applied to them, but the court ruled this could not be applied retrospectively and their accounts should have been in order before seeking Artists Exemption.
As shocking as the €6 million revenue bill is (more than half of this total was due to penalties and interest charges), I was even more shocked to find out that Foster and Allen have sold 18 million records worldwide, appeared on Top of The Pops and had No. 1 singles in lots of countries around the world including South Africa. There are two morals to this story: 1. Get your accounts in order and 2. There is some serious money to be made in Country and Irish music!
13.0 Ending The Partnership
One of the first parts of this section states that if one member of the band leaves, the partnership (and band) will continue. There is also a provision to wind up the band if a particular named individual leaves. You can delete this provision if it’s not needed.
The easiest way to have the band legally finish is for all members to sign an agreement stating that the band has ceased operating, this is stated in this section.
The band may find its self legally obliged to cease existing as a result of legal findings. This is included in this section of the agreement.
The final provision in this section states that the agreement is still in affect if a new member joins the band.
When Roger Waters left Pink Floyd he was surprised to find out the rest of the band wanted to continue without him, so he brought them to court. There were some very ugly exchanges in the press and after lengthy legal wrangling, Waters ceded rights to the name, but was awarded rights for the concept of “The Wall” which he went on to tour. The saddest part of that story is the thought of people who shared some incredible memories and music becoming bitter enemies. Any band I’ve ever been involved with has been with friends, a band agreement might be key in ensuring that you remain friends. The members of Pink Floyd appeared with each other again in 2005, so hopefully they all lived happily ever after.
14.0 Distribution of Band Assets After Termination
When a band does cease operating, it makes sense to make provisions for what will happen moneys accrued, debts to be paid, band assets and revenue that may arrive in the future. This section makes provisions for all of these things.
The first section deals with debts and income, stating that these are to be distributed evenly among the band partners.
The second section deals with assets that may have been purchased by the band. This section states that the assets will be divided evenly among the members, based on evaluations. This section could be changed to have assets sold and the revenues used to pay debts or be split among the partners. Adjust as you see fit.
If your band has ever released anything, it’s possible that there may be royalty and streaming income generated after the band have ceased operating. Agreeing what happens this income is important, and the third part of this section deals with this.
15.0 Addition of a Band Partner
If the band does have a new member join, they should be asked to sign this agreement, then they will also be bound by the terms. This section also ensures that the new member won’t have rights to assets that were purchased before they joined, and they won’t receive revenue from royalties or recordings that relate to works created before they joined.
16.0 Leaving Members
Many bands find that members may need to leave for one reason or another, and some bands find that they may need to ask members to leave, this section makes provision for this. If a band member needs to leave, the agreement states that they should give 30 days notice, but the band may have a new member working and performing with them within this 30 day period. If this is being worked out amicably, there could be a training in or hand over period.
Under the conditions of this section, any member leaving the band, for whatever reason and under any circumstances is entitled to there share of the net worth of the band, their share of revenues earned from recordings and royalties and the value of their stake in the band as outlined in the band agreement.
17.0 Determination of Net Worth
It may be the case that all the members of the band can agree on what the band is worth, possibly based on your largest performance fee or a sync deal fee. If an agreement can’t be reached, this section makes provision to use an accountant to calculate the net worth.
The next part of this section lays out payment details of net worth to a leaving band member. These can be adjusted if needed, but this payment scheme is pretty standard and should be achievable if a band is consistently gigging, if not, the periods of payment can be made longer.
This subsection ensures that band members remain informed about whatever decisions and actions are being taken. Make sure all the members provide relevant contact details at the signature section of the agreement.
18.0 Band Partnership Bank Account
Hopefully there will be a point when your band will start to generate some revenue. Once that happens, having a dedicated band bank account makes sense. Not every member may wish to be associated with the bank account, and having every member of the band sign off on every payment made from the account may prove cumbersome, so there is provision here to allow certain members to sign off on payments. Whichever members of the band wish to have control of the bank account should add their name to this section.
19.0 Mediation, Arbitration
There may be some disputes within the band that can’t be resolved internally. If this happens, it would be good to have someone to go to who can sort this out. In the absence of wise old King Solomon, a solicitor might work, a music professional who doesn’t work with your band, that you all trust, anyone who could help and whose opinion would be valued by all members of the band will work. If you can find someone who fits this description, stick their name in the first space, and let’s hope they’re never needed. Generally the advice of a mediator is not legally binding, unless all parties involved wish to make it so.
If the named mediator fails to find a resolution, the dispute will need to take a legal route, and an arbitrator will need to be appointed by the parties involved. The decision of an arbitrator is legally binding and is governed by law (see Irish Arbitration Act 2010). Arbitration is less formal than court, but there is a hearing involved where either party may present witnesses.
If it gets to a point where an arbitrator needs to be appointed, the arbitrator will need to be a trained and qualified legal professional, preferably someone with experience in entertainment industry law. Consult a solicitor on this and they should steer you in the right direction. Do not use former barrister and Foster & Allen business manager Patrick Russell!
Be aware that if there is one side of this argument that the decision finds in favour of, based on this section of the band agreement, the side that does not prevail will be liable for costs and expenses accrued as a result of the arbitration.
If you want to see what a mediator and a dysfunctional band looks like, you should watch Some Kind of Monster, the 2004 documentary that follows Metallica into the studio with their very own band therapist. This example leans more towards intervention than mediation, but it’s till worth a look as a ‘how-not-to-‘ guide.
The final section of the agreement sets out terms for making changes to the document. If rights afforded to a band member in one section of this agreement are given up by that band member, it doesn’t have an affect on other sections of the agreement i.e. all the other sections are still applicable and binding.
Before signing the agreement, all band members should not only be given a copy of the document to read, but they should be afforded the opportunity to seek advise from a third party on the details of the document.
That’s it. If you got this far, you must really mean business, fair play. Now go play or listen to some music, safe in the knowledge that you know how to avoid talking to Joe Duffy.
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