May 7, 2010
Some Business Tips For The Aging Rocker
Some Business Tips For The Aging Rocker By Cliff Ennico www.creators.com . I#146;ve been getting e-mails lately from aging Baby Boomers who are forming rock-and-roll bands. Proof yet again that our graying generation is refusing to grow old gracefully . . . Here#146;s a good one: #147;By day I#146;m a humble construction contractor, but at night I put on leather pants and hit the road with a rock band I#146;ve formed with three of my buddies. We play local bars and college hangouts, specializing in straight-ahead 1960#146;s style rock #150; mostly original songs that I#146;ve written. We have even cut a demo record which we#146;re trying to pitch to record companies. We all share the band#146;s expenses, and split the profits equally if there are any. Do we need to have a formal legal agreement? We#146;re all in our mid to late 40#146;s and are just looking to have a little fun before we die, but you never can tell #150; this could lead to something.#148; You gotta love a guy like this, still hanging onto rock-and-roll dreams while he#146;s hanging sheetrock. As long as you guys are just having fun for a few beers, it really won#146;t matter if there isn#146;t a formal agreement between you #150; after all, it wouldn#146;t be quite in the spirit of the 1960s, would it? But if you are thinking about taking your music seriously, then yes, #147;Mick#148;, there are legal issues to think about, such as: Avoiding a Legal Partnership . If you are splitting profits and expenses with your buddies, then what you#146;ve got is a #147;partnership#148; for legal and tax purposes. You will have to file a tax return with the IRS on Form 1065 each year (it#146;s due on April 15), or face late filing penalties of $600 per partner #150; so $2,400 in your case. Also, the only way you can legally get rid of a #147;partner#148; is to buy out his interest for whatever he#146;s willing to accept. So if your drummer decides he wants to spend more time #147;hanging out with his old lady#148;, it#146;s gonna cost you some bread. To avoid this, each band member should agree that there is no intent to form a partnership, that he is responsible for paying any taxes on his share of the band#146;s profits, and that only one dollar will be paid to any member who withdraws or is discharged from the band (for example, for repeatedly failing to show up at gigs). An agreement like that may not totally convince the IRS, but it#146;s better than nothing. Making Sure Decisions Get Made . When you#146;ve got a band, there are a lot of decisions to be made, like: what gigs are you going to take on, and turn down? what new songs will the band play, and what old ones aren#146;t working? where are you going to send your demo recording? if a record company offers you a deal, what terms will you accept? how will changes in the band#146;s lineup be made? Obviously, you are trying to run this band as a democracy, with decisions made as a group effort. But there will be times when the band#146;s members disagree, or an unpopular decision needs to be made. With four of you, there#146;s a good chance of a two-two split, which lawyers call a #147;deadlock#148;. You need to reach an agreement with your mates that one of you is the #147;leader#148; of the band, and will make all the tough decisions after seeking input from the other members. The other guys will have to trust that the leader will do the right thing. This is tough advice, but all music groups need to deal with it. Remember Pete Best? He was the original drummer for the Beatles, a good friend of John, Paul and George during their Liverpool days. Then the Beatles signed up with EMI Records, and their producer, George Martin, decided that Pete wasn#146;t up to the job. End result? We got stuck with Ringo Starr, and Best . . . well. The music business is an utterly ruthless one, and while you are no doubt loyal to your band mates, are you really willing to pass on being the next #147;American Idol#148; just because your bass player#146;s a little off key? Who Owns the Songs ? You say you have written all of the band#146;s original songs, but are you sure you own all of the rights to the songs? If any of your buddies has helped you write the music or lyrics to a song, they legally own a piece of the copyright. Rock musicians make money from their records and concerts, sure, but they make a lot more from copyright royalties on their original music #150; you don#146;t want a former bandmate coming out of the woodwork years from now with a fancy Hollywood lawyer claiming that his client #147;put the bomp in the bomp-bah-bomp-bah-bomp#148; (copyright Barry Mann and Gerry Goffin, 1961). Your agreement should clearly state that you are the #147;sole author, copyright holder and owner of all rights#148; to each song the band develops. Also, the other members should assign to you any rights they may #147;now or hereafter#148; have in any of the band#146;s songs. Again, we look to the Beatles for enlightenment (if you are interested in the Beatles#146; business dealings, by the way, the best book around is The Love You Make , by Peter Brown). Early on in the band#146;s history, someone convinced Messrs. Lennon and McCartney to sell the publishing rights to over 250 of their early hits for a #147;song#148;. So whenever you hear an early Beatles classic playing on your local radio station today, Sir Paul and Yoko Ono (John#146;s widow) get hardly anything for it. Instead, a small amount of money is paid to the person who owns the #147;publishing rights#148; to the song. Who, believe it or not, is . . . Michael Jackson, who bought the Beatles catalogue at an auction in 1985. Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2004 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com

Posted by Staff at 1:43 AM