Picture this: you and three of your friends go into a (legalized lottery state) store and decide to each put in three dollars for a chance at winning the big payoff. The drawing time comes, and lo and behold, you hit a 1 million dollar prize. Now, your (former) friend Bobby* holds the ticket, but he says he actually went through the trouble to fill out the card and hand it to the cashier, so he is keeping half the money, and letting the rest of you 'sort it out'. Sounds nuts, doesn't it? After the severe beating you give Bobby, and after you (hopefully) get your money, you need to realize what went wrong. Well, I'll tell you: the same thing went wrong with the lottery ticket that happens with so many bands. There was no agreement about how the business would be handled after the money starts coming in. Grab a notebook, the number for a good attorney, and lets talk about how to keep everything on the level between you and your band mates. A band is usually formed on assumptions and casual agreements. There is the assumption that everybody will pitch in and rehearse, show up to the gigs, and (usually) play the right notes, and you'll get paid x amount of dollars, depending on lots of y factors. There are agreements that "You'll drive here, and I'll drive next time". Those are the early, easy guidelines. Let's say you start making really good money. How does it get divided? Now the biggie- suppose you get a record deal. There is a big advance check sitting there, with the potential for lots of earnings. Who gets what? That is where the 'band agreement' comes in to play. It is basically a legal form sorting out how much of the pie the band splits, and in what percentages. Right now you are in an "all-for-one" mind set, and that is very cool, but right now there may not be a lot of money on the table. Money can show up at the door and change a lot of people. The finer points have to be hammered out long before the money shows up. It is much easier to negotiate and be fair with an empty table than looking at a pile of cash and trying to figure out each band members' contribution. There are some good guidelines that will make this (hopefully) painless to discuss internally. The first is publishing. I can write a book on publishing and all of the arguments surrounding it, but here it is in a nutshell- whoever wrote the melody and the lyrics wrote the song. Period. This is going to hurt, but any monkey can play that drum part or piano solo. If one person writes all the tunes, the rest of the band can enter into a 'production agreement' of sorts to be compensated for making the songs what they are- bringing their spice to the soup-but you are not entitled to it. It all depends on the writer. Remember this- the writer is providing you the opportunity to play, even if they are all his/her songs. (Side note- if you want to have more of a stake in the songwriting, write more songs!) If it leads you down a promising musical career, and you get to eat, then don't complain. You are doing better than most. Record sales, at least on an independent level, won't become a big money factor. In theory, if you produce a CD for, let's say, $10,000, and have 2000 pressed, and you sell them for $10/unit, then you should break even after 2013. (Just kidding.) CD sales basically pay for more CD's, and should be handled totally separate from touring income. Unless you are moving thousands of units, then this money shouldn't be an issue. The same holds true for merchandise. Your T-shirt sales should basically pay for more T-shirts, and if you are showing a good profit, then get more designs, or hats. That money should stay separate from touring money as well. If you are setting up an agreement to cover all your bases, then equal division of record sales and merch sales (after expenses) is a good guideline. Touring income is going to be a large part of your income. This portion of your agreement is going to vary from band to band, so tailor it to your needs. A responsible person in your camp who has been tracking road expenses and income needs to come up with a figure everybody can live with and agree upon for your touring income. If you are just dividing the money up after a show, then you have already set a guideline. If you are a dedicated band, all sweating and bleeding together on the road, then the money should be equal. If you are a bandleader, and have a salaried position for your players, then that is your agreement, and stick to it. There are non-monetary concerns in the band agreement as well. Who owns the name of the band? If the band purchases equipment with band money, who gets it if the band breaks up? Who decides when the band is finished? Who has the power to enter into contracts, access to the bank account, or owns the van? If you have an even number of people in your band, who has the deciding vote in major decisions? Also, are day-to-day decisions handled by one person, or group voting? This all may sound basic, but it needs to be hashed out way in advance to avoid any confusion down the road. One thing to remember in the whole negotiation process: Be cool, but cover your back side. The band may be rockin' now, but 6 months from now it could all be gone, and everybody is fighting over a worthless Brand P power amp. If you are entering into a contract with your band, it is a very big and mature step towards becoming a better band, a more business-savvy band, and a wealthier one. It will answer some internal questions for you, but lots of uncertainties will also arise. Get it all hashed out as soon as possible, and everybody will be much better off. Enjoy. *name changed from nothing because I made it up |