What do documents do you need in order to start a band? Technically none, unless you start making money. Then you run into potentially devastating problems down the line if you do not clear up some concepts in the beginning. I encourage all artists to get ahead of their contracts and agreements so that they can have important conversations before problems arise. The following is a primer on the documents every band should consider
First up is the general band agreement. This is a doozy and encompasses a litany of important items. First, you need to decide who owns the rights to the band name. Do you remember the legend of the fifth Beatle? People routinely float in and out of bands. The last thing you need is a former guitarist performing under your name across town. The members need to determine who will keep the name in the event parties go separate ways, or maybe decide that no one gets the name if the group splits apart.
Copyrights are complex and govern royalties. The author of a song’s melody and lyrics receive royalties distinct from the owner of the recording copyrights (your label). Will all band members share equally in the songwriting copyrights? If that member leaves, do the songs leave as well? Does the rest of the band have any entitlement to future copyright distributions
Other income considerations include merchandise sales, ticket sales, YouTube revenue, and other digital download revenue streams. If a band member leaves, does that member have any residual right to the revenue? If so, for how long
While splitting income can be a headache, splitting expenses is no easier. If one member invests capital into equipment, do the other members who derived income from that equipment have a right to the equipment? Can they make an offer to purchase the equipment used before the member leaves? How are you paying for logo design, studio costs, and travel expenses? Are these costs shared equally? Do members receive credit for paying for certain items and then have a right to ask other members to pitch in their fair share? What if a member falls on tough times? While these answers may seem straight forward, simply asking these questions leads to better cost accounting and precludes arguments in the long run
Who reports the revenue? Are all revenue streams going directly to the band members? Have you considered creating a corporate holding company for tax purposes? It may make sense to create a legal entity to manage the money and keep detailed records of the musicians’ finances
How will you pay for guest stars? Do you want a choir as backup for a song? Is Prince going to do a guitar solo with you? How will they get paid? Are they entitled to any backend revenues or just a flat fee? A simple agreement on the front end clears up these issues
When you land your record deal, who has the rights in the recording? These deals encompass issues such as production volume, format, exclusivity, duration, and merchandising rights
If you hire or work with a producer, then you’ve opened up a whole new box of questions. What investment is the producer making into your band? What compensation will the producer receive? How many royalties does the producer receive? What rights does the producer have to a remix of your song? How much revenue should you receive if the producer makes a big hit with your underlying work
Managers, booking agents, and other professionals will have their separate fees and agreements as well. The most important thing here is to ensure that the third party you hire has your best interests at heart and understands your vision of your career. Speaking frankly and openly with these professionals will protect you in the long run and lead to productive business relationships
The music business is a tough game. This post only scratches the surface of some key issues that every band should have in the back of their minds. Remember, if you want to be a professional musician you have to get paid. Money can add complexity to the best relationships. Get ahead of these issues in order to reduce the chances of unhealthy drama infecting your successful group.