Everything is peachy when things in a band are going right; the music feels like a perfect marriage and all the members are excited about the opportunity horizon. But just like divorces - the realities of band break ups can be extremely ugly and financially damaging. Although many artists abhor paperwork and may think a handshake can work amongst band mates, here are five reasons why an inter-band agreement is a good idea.
1. Your Band Name is an Important Brand: Your band name is your brand – it is part of the intellectual property you’re creating through your music. It is the identity of the band, it is what is on the marquee and the name is part of what drives ticket sales. Who gets to obligate use of the band name? Who owns the name? If your guitarist leaves or your drummer gets kicked out - can the ejected member still tour and use the band’s name? Can they say they are formerly of your band in the advertisements? Can they release recordings using the band’s name or otherwise referencing it? And speaking of ejected or departed band members…
2. Adding or Removing Band Members: What is the process for resolving disputes? Removing band members? Who gets to decide? Who is in control when it comes to who gets to play in the band or who gets added to the band? You’re interests may be best served by deciding what is a fair process in advance and before you are the potentially ejected victim or before you want to add someone to the band and some other band member is being unreasonably resistant.
3. Someone Is Going to Loan the Band Money: Someone, a band member, a band member’s family members, or some third party is going to end up loaning the band money, equipment or both. The lender will have to be repaid and if it is a band mate, they may want to be paid each time money flows in until they are fully repaid. Immediate repayment, however, may not be in the best interests for the band as a whole. Money may be better spent reinvesting in band merchandise or the band van may need repair to make it to the next show or some other unforeseen circumstance that requires money may come up.
If you’re the one that is lending the money to the group (or your family is) you are going to want some details on when you will be repaid and how at risk the resources you contributed are. If the band breaks up and there is still an unpaid loan - does everyone pool together and pay it back? Or is the lender just out of luck? That may affect the size and quality of loan the band can get. Come to an agreement about band mates (or their family members) extending loans or providing supplies to the band.
4. Controlling the Music: Your band’s main objective is to make music and play it live. A handshake may work for that – but when it comes time to make money off of your music by selling it and licensing it, who controls the right(s) to obligate your music to platforms or to negotiate a synchronization license? An agreement that permits someone in the band to speak for the entire band when it comes to licensing or otherwise exploiting recorded assets can often expedite revenue generating transactions and create a ‘one-stop’ style atmosphere for licensing, which can be advantageous. An agreement that clarifies who can and cannot sell the recordings and who can and cannot collect the revenue generated from exploitation is often a great thing to have if a band is breaking up – especially if the separation is acrimonious.
5. Responsibilities: Each member of the band contributes in their own way and each member has to pull their own weight. From social media engagement to merchandise production, content creation to event production, there is always another thing a band could be doing. Who is responsible for what task? Who is responsible for communicating with your business team? With your fans? Communicating conflicts within the band? A well thought out band agreement can articulate who is responsible for what and how the slack is picked up if someone is dropping off or on vacation. Without a clear delineation of responsibilities – opportunities can be lost or not actualized and growth can be stifled.
Although oral contracts are enforceable – in the State of California, the time period in which you can dispute an oral contract is less than the time period permitted for disputing a written agreement. The extended time period for addressing disputes as is just one of many additional reasons to execute an inter-band agreement – including just having the clarity and peace of mind knowing that the bases are covered. If you are seeking advice or assistance with a band agreement – please contact an entertainment lawyer.