“Success is having to worry about every damn thing in the world, except money.” This was how Johnny Cash expressed his thoughts on finances, and while many up and coming musicians would rather write a song than worry about how much money each person in the band will earn from it, it’s an undeniable fact that the business side of music must be addressed at all points in a band’s career, particularly in its early stages.
Band’s typically start out as a collection of friends who just want to make art together, but the fact of the matter is when any level of success starts to come, you run the risk of egos getting in the way, relationships souring, and band members becoming disgruntled about pay. A band partnership agreement is a way to settle these disputes before they arise, and it’s one of the most important documents a young band can create. These contracts vary depending on the band, but often stipulate who owns the band name, what happens when members leave and/or new members are gained, and what percentage of songwriting credit each member receives. Paying a relatively small fee to obtain this contract early in a group’s lifespan can, in the long run, save thousands if not millions of dollars—not to mention many fights and headaches.
And it’s not just upstart bands that have to worry about these issues; The Beach Boys have been filing lawsuits against each other for the better part of three decades. Al Jardine, Mike Love and Brian Wilson have filed various lawsuits up to as recently as three years ago over songwriting credit and use of the band’s lucrative name on touring and recording projects. The remaining members of the Doors have long been in similar legal battles over current use of the famous name.
Some people, and it seems musicians especially, are afraid to sign contracts because they see it as a sign of distrust, but what you’re actually doing is putting down on paper things you’ve already agreed to. If you don’t trust somebody, then why would you do business with them in the first place? Additionally, it forces you to think about things you haven’t thought about before. Other important information in band partnership agreements include allocation of publishing, band bank account information and which members of the band have the power to negotiate contracts and show bookings.
A band partnership agreement should also stipulate what business form a band will take. The recommended method for young bands is to make the band into Limited Liability Corporation (LLC), which protects the assets of the individuals in the band against lawsuits. A relatively simple process involving filing legal papers with the state and paying a relatively small fee will ensure that if the band is sued, only assets that are in the name of the band can be held accountable.
Though artists are often reluctant to discuss or do anything business related, it is part of being a musician. A band partnership agreement can alleviate much strife, arguing and financial hardships. Despite what Johnny Cash may say, the most direct path to success involves at least a little worry about money.