WHERE IS YOUR HIGH SCHOOL BFF?
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 newsfeed 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.
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.
Yes, a lawyer costs money, but it’s well spent to know that the passion you have for your project will be protected. And should that project not last or bandmates rotate out, like Aunty Rochelle, everyone will know who’s paying for the funeral.