Ask An Entertainment Lawyer: Band Member Dispute

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Mr Mencher,
One of our band members recently left the band. He is asking about getting royalties on Cd sales. He feels he should be paid a portion for every CD sold that he is on. Is he entitled to this after he quit? Is he right in this? He is holding the log in information for our CD Baby account hostage until he gets what he wants. We are on a big tour this year and it is shaping up to be the biggest year for us ever. Please help.

This scenario is, unfortunately, all too common in the music industry; and it does create real issues for band members trying to maintain momentum and develop an ever-growing fan base. A leaving member is a big enough loss, but if that leaving member prevents the rest of the band from carrying on, the damage potentially becomes significant. In the case above, the leaving band member wants to receive royalties from CD sales (and presumably digital and other sales of the recordings containing her/his performances) AND he refuses to provide the remaining band members access to their CD Baby account until the issue is resolved.

Getting access to the CD Baby account is a practical issue, but it will not resolve the more important issue of dealing with the rights (if any) of a leaving band member. As a lawyer, I always strongly advise clients to contemplate and deal with this issue before it gets to this point. If the band can tackle the tough questions during the honeymoon phase of the relationship (i.e. when everyone is still excited), the band will have guidance on how to deal with a leaving member. This guidance comes in the form of a band agreement – a document that outlines all the rights and responsibilities of each band member (a pre-nup of sorts).

A band agreement presupposes that a band is taking its business seriously. A band agreement generally follows the formation of a business entity in which to operate the band from. Without any formal filing, a band will be considered a general partnership in nearly every state (this is the default rule whether you intended it or not). From a legal perspective, this is a very risky structure as each member of the band is not only personally liable for his/her own actions but also the actions of fellow band members. Nevertheless, even a general partnership can have a partnership agreement – the band agreement.

A band agreement contains, among numerous other considerations, the following important provisions:

  1. Band Member Share of Profits/Losses
  2. Ownership Rights in Songs, Recordings, and other Content (Copyright and other IP)
  3. Removal of a Band Member
  4. Rights of a Leaving Band Member
  5. Rights to the Band Name

But what if a band doesn’t have a band agreement? Without the guidance of this document, what rights does a leaving band member have in the recordings of the band (that contain the performance of the leaving band member)? Perhaps a lot! Copyright law dictates default rules for ownership in sound recordings. Under copyright law in the United States, if two or more people create a work together, they are considered joint authors of that work. As joint authors, each author owns an undivided share of the entire work, and can utilize it on a non-exclusive bases so long as that author accounts to every other author a share of the earnings. This means that even the leaving member has the right to a share of earnings from the sale of the recordings. Again, a band agreement should deal with this issue.  But short of one, we would need to know who owns the master recordings. Who paid for them? Is a producer claiming an ownership interest? Were the masters subject of a recording contract? Work made for hire? It is very possible that the leaving band member owns a share in those recordings, and as such, would be entitled to a share of the earnings from those recordings.

So a lot depends on whether the band has a band agreement. Whether that band agreement addresses this issue. If not, what role the leaving band member played in the creation of the sound recordings. And who, if anyone, owns the sound recordings via written contract or default copyright laws. The answer to the above questions is uncertain…

One thing is for sure: if the band doesn’t have a band agreement they are definitely going to want to invest in the drafting of a settlement agreement with the outgoing band member to determine the rights of each party going forward (if it is determined that the leaving band member has a case).

2 comments to Ask An Entertainment Lawyer: Band Member Dispute

  • Бесподобное сообщение, мне очень нравится :)…

    ……

  • John

    Does a leaving band member have a right to money from future gigs, future recording which they are not a part of, and the name of the band if there is no written agreement?
    thanks

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